Monday, 4 May 1987 Madam SPEAKER (Hon. Joan Child) took the chair at 2. p.m., and read prayers. Mr HAWKE(Wills-Prime Minister) —I inform the House that the Minister for Foreign Affairs (Mr Hayden) left yesterday for official duty overseas. He will return on 25 May. In his absence, the Minister for Resources and Energy, Senator Gareth Evans, is Acting Minister for Foreign Affairs. The Deputy Prime Minister and Attorney-General (Mr Lionel Bowen) is representing the Acting Minister in this House. Mr SINCLAIR —In the absence of the Minister for Aboriginal Affairs, I ask a question of the Prime Minister. Does he accept the view of his Minister for Foreign Affairs, as given on Australian Broadcasting Corporation television news on Saturday, that Aborigines could continue to deal with Libya as long as they were not breaking the law? Can he confirm whether or not the Tasmanian Aboriginal activist, Michael Mansell, plans to return to Libya later this year for further talks on Libyan involvement in Australia? Can he guarantee that his Government will ensure that Libya is prevented from training Aboriginals as terrorists or from contributing arms or know-how to extremist Aboriginal groups in Australia? Mr HAWKE —I thank the right honourable gentleman for his question. He will appreciate that, insofar as anyone in this country is not breaking the law, there is nothing we can do about whom a person chooses to contact. But let me make it clear, as the Government has already made its position clear, that as a government we will cease funding any Aboriginal organisation which accepts Libyan assistance. I say that quite clearly. I am given to understand that in respect of Mr Mansell no Federal funds were used by the Tasmanian Aboriginal Centre adviser to sponsor the visit to Libya. I understand that the expenses were paid by Libya. I also understand that the Minister has been making further investigations into this matter. I am pleased to say that as far as I can see the Aboriginal community generally has repudiated Mr Mansell. There has been no expression of support from any other area of the Aboriginal community. I am very pleased to see that. I assure the right honourable gentleman, as I said in the earlier part of my answer, that if an Aboriginal organisation does accept funding, the Federal Government will cease its funding. As to the broader part of the question dealing with Libyan activities, I think the right honourable gentleman would know that there have been some discussions between the Foreign Minister and the Leader of the Opposition, who also has had the benefit of some other information. On that part of his question it is not appropriate that I should make any further answer. Now that the Minister for Aboriginal Affairs is present I do not know whether the right honourable gentleman would like the Minister to add to that answer or whether he is satisfied with what I have said. Mr TICKNER —My question is addressed to the Prime Minister. What is the Government's attitude to proposals to abolish the fringe benefits tax and the capital gains tax? Mr HAWKE —I thank the honourable member for his question, which assumes some significance in terms of what we can understand to be the policy of the Liberal Party of Australia. We know that the Leader of the Liberal Party has promised that his long awaited tax policy will include-as we understand it from the most recent reports-the abolition of the fringe benefits tax, the capital gains tax and tax on lump sum superannuation. It will promise flatter income tax scales, income splitting and a whole range of other tax promises which have been toted up over the years. The previous shadow Minister, Senator Messner, who, so it was said, had responsibility in this area, told us in his February newsletter that the Liberal tax policy had already been constructed. His actual words were: It's under wraps at this time. That was the statement of the Liberal Party's policy position on taxation in February-the policy had been constructed and it was under wraps. Of course, we do not have Senator Messner any more; we now have the honourable member for Deakin. Government members-Oh! Mr HAWKE —Well, we have him for a while, but his is one of the seats that we will win at the next election. The community generally is in some state of confusion as to whether the Liberal Party has a policy or not because the Federal Treasurer of the Liberal Party of Australia-and honourable members know who he is, Mr John Elliott-has the impression that a policy already exists. I remind the House what Mr Elliott said, and this was reported in the-- Mr Tuckey —I rise on a point of order, Madam Speaker. I draw the House's attention to standing order 145. The question related to Government policy yet we have not heard of anything other than Opposition policy. Because the Prime Minister has no good news for the Australian people he follows this course of action. Madam SPEAKER —Order! The Prime Minister will answer the question. Mr HAWKE —That is precisely what he is doing. What the Federal Treasurer of the Liberal Party had to say was reported in the Weekend Australian of 18 and 19 April. He said: The point is that the Liberal Party ought to get out and enunciate its tax policy. It is- not `it might be'- a damn good policy. Now if you have a damn good policy, my own view is that you ought to have it out up front and defend it. The Federal Treasurer of the Liberal Party repeated his call this weekend because this is what he said: I do think the Liberal Party should get their tax policy out. My view is if the world at large, the electorate, saw the Liberal Party's policy then they would be very pleased and I think-- Mr Cadman —I rise on a point of order, Madam Speaker. You called the Prime Minister back to the question. I ask you to ask him to be relevant to the question. Madam SPEAKER —The Prime Minister will answer the question, please. Mr HAWKE —What we have to say about this area of tax policy must reflect what we understand the Opposition to be saying. In that sense, in our enunciation of policy we want to have a clear view of what the Opposition is saying. It becomes interesting to see the response of the Leader of the Opposition to a call by his own Federal Treasurer on this matter. The other day I told the House that the Leader of the Opposition had said on 24 April that the Opposition had a policy on tax. His words were: We have a policy on tax, the only thing that is missing is the numbers. He has gone further than that. I refer the House to what he said in an interview with Niki Savva in the Sun on 1 May. That report said: Mr Howard rejected Mr Elliott's claim that he knew what was in the policy. This is what the Leader of the Liberal Party has to say about the Federal Treasurer of the Liberal Party on the question of tax policy. The very words-- Mr Spender —On a point of order, Madam Speaker, I remind you that the question addressed to the Prime Minister concerned his attitude to the fringe benefits and capital gains taxes. I know that there are difficulties about the use of the word `relevance' in Standing Orders, but it seems that the Standing Orders are becoming more and more difficult for the Prime Minister to understand. Madam SPEAKER —The Chair has always given more indulgence to party leaders than to anyone else. However, I do ask the Prime Minister to get on with his answer in regard to his own Party's policy. Mr HAWKE —To conclude what the Leader of the Opposition had to say on this question of policy in reference to Mr Elliott he said: I think he's just spinning a yarn. The policy has not been settled and there's no such thing as a policy to see. So in regard to the position of the Government's policy on this question that I have been asked, we are in the position of enunciating the clear view that we will adhere to the abolition of the fringe benefits tax, the capital gains tax and all those things that we have introduced. They will stay in place. The difficulty that we have in fully enunciating our total position and the tack that we will put in the community is the fact that at this stage the Leader of the Opposition is saying that there is no such thing as an Opposition tax policy. It is little wonder that he no longer has the confidence of the Federal Treasurer of his own Party, and it is little wonder also that his Party generally and the electorate have no confidence in him. As I said in this House last year-it caused some amusement to the Leader of the Opposition-we will go to the next election making tax a central issue. Our capacity to make tax a central issue will be completed when the Leader of the Opposition has finally got his instructions from Sir Joh Bjelke-Petersen to see whether he will be allowed in any shape or form to have the broad-based consumption tax which is so dear to his heart. Mr HOWARD —Does the Prime Minister deny that family allowances are to be means tested following the May economic statement? If the Government proposes the introduction of such a means test, will that economic statement also include measures which affect the incomes of households without children, or will the Prime Minister allow the heavy relative disadvantage suffered by families with children in our society under his Government to be further increased? Mr HAWKE —My answer to the honourable gentleman's question is in two parts. First, I will obviously not say in advance what is in the statement that will be delivered in this place, properly, by the Treasurer on 13 May. I do not think that the Leader of the Opposition really expects that I would address myself to the contents of that statement before the Treasurer delivers it. The second part of my answer is that the hypocrisy which characterises the Opposition-and which is reflected in the question-never ceases to amaze those of us on this side of the House when the Opposition purports to speak for the families of this country. I remind the House of what I have said before: When one talks about the position of Australian families, one must look at the range of policies in the areas of employment, education, housing and social welfare. All those things determine the quality of life that is available to Australian families. In examining the record of the Opposition when in government in relation to each of these areas and the record of achievement of the present Government, this Government comes out in front on every one of those issues. I say again that when we go to the election we will be talking about families, as we will be about tax. That will be at the forefront of our campaign. No matter whether one looks at employment opportunities, education in the primary and secondary spheres or in the tertiary sector, or at housing, all those elements which go towards determining the quality of life for Australian families have been significantly advanced by this Government. We have made significant moves to build into this country policies which make up for the period of neglect which characterised the seven years of government in which the Leader of the Opposition played such an important part. He can talk about families now; let him wait until the election campaign, when we will talk about families and tax until he is sick and tired of hearing about them. It will be part of the whole gamut of issues before the Australian electorate which will ensure that he and those behind him continue to sit on the Opposition side of the House. Mr LAMB —Can the Minister for Aboriginal Affairs inform the House of the Government's response to Mr Mansell's demands for a separate black state and a separate passport system? What is the origin of these demands? Mr HOLDING —The Prime Minister has already reiterated the attitude of the Government to these general positions. However, I think I should point out that, despite the widespread opposition within the Aboriginal community to Mr Mansell and his proposals, Mr Mansell has not merely continued to argue his case for Aboriginal links with Libya but is now endeavouring to involve other Aboriginal people in support of his cause. I would like to assure the House yet again that the general response of Aboriginal people around Australia is to reject both Mr Mansell's arguments and his advocacy. I should also point out that, having known Mr Mansell for many years, I had never previously heard him put the proposition that Aboriginal people wanted their own separate nation and their own passport system. Nor have I heard this argument advanced seriously or at all by any responsible Aboriginal leader or any group of Aboriginal people. I caused inquiries to be made in order to discover the source of Mr Mansell's new-found policies. Unfortunately, I did not have far to look. In the Times on Sunday of 12 April 1987 a person described as the Libyan Arab Cultural Association's spokesperson, a Mr Robert Pash, was described as handling travelling arrangements for the Australian delegation to Libya, which included Mr Mansell. Mr Pash is associated with and a spokesman for an organisation known as the Australian People's Congress. This organisation previously operated under the name of the National Vanguard and made clear its objectives in a pamphlet headed `Racial comrades of the left!'. It announced that a new dialectic was being forged in Australia, the racial dialectic. The major elements of this new racial dialectic are self-determination for all peoples of good will, maintenance of the biological integrity of the white race through complete geographic and political separation of the races, and international white unity. In Mr Pash's newsletter he stated `that we must preserve the unique racial identity of the nation and multiculturalism cannot be tolerated'. I table these documents: Aboriginal separatist demands-Relationship to International Green Movement-Copies of- Certain pages from issues of Australian Socialist, Volume 1, No. 8, February-March 1987. Leaflet headed `Racial comrades of the left!', published by National Vanguard. Extract from article entitled `A new spirit' from the The Green March, January 1987, published by the International Green Guard Movement. I have arranged for copies to be sent to both shadow Ministers on the Opposition side so that they will be fully informed. I will not quote from them because some of the quotes would cause great pain to many sections of our Australian community. Let me say this, however: When the shadow Ministers see them I think they will realise that in both utterance and quality these statements represent extreme right wing racial groups which probably would have been applauded, and are symptomatic of the kinds of things that were said, in Hitler's Germany and have no place in Australian society. These comments certainly do not have any place in the range of issues which have been covered by Aboriginal leadership to date in Australia. They are, however, perfectly consistent with the white supremacy nonsense of Mr Pash. In repeating these statements, Mr Mansell is making it clear that, at the very best, he is singing for his supper or, at worst, he is being run by Mr Pash. When one thinks about it, it is an absurdity for any person claiming to be an Aboriginal leader to be run by a white racist supremacist. Hopefully, when these facts are brought to Mr Mansell's attention that will be sufficient to persuade him to disengage himself from his racist sponsors and their Libyan associates. Certainly, as far as I am concerned, having given him time to consider that, I will then be looking at other options. Mr GOODLUCK —My question is directed to the Prime Minister. Does he regard it as obscene that he should attend a black tie Australian Labor Party fund raising dinner, at $460 a double, in order to foreshadow cuts in welfare expenditure-such as for the aged and family allowances-in the forthcoming May economic statement? Mr HAWKE —Let me say to the honourable member that I find the exercise of last Saturday night a perfectly appropriate one. It was one which nevertheless I understand would be considerably disturbing to those on the other side of the House, not for any reasons of decency on their part, but rather because it is a further piece of evidence of the fact that they have totally lost any reasonable constituency in this country. The fact is that the business community of this country has come to the quite proper and, I would suggest, obvious conclusion that there is only one party in this country which is capable of providing reasonable and responsible government, and that is the Australian Labor Party. Hence the fact that we are now getting the support of people throughout the community. But I say this to the honourable member: I had one observation to make at that dinner which is very relevant to his question. In the course of my remarks I said that we would in May be bringing down a tough statement, one that would be exercising expenditure restraint. I said to the gathering-I would be interested to know afterwards the view of the honourable gentleman-that amongst the things that we would be doing in the May statement would be the introduction of further measures to ensure that those who were not entitled to receive social welfare payments would not receive them. I said we would have further measures to see that the welfare cheats were prevented. Speaking to members of the business community there, I said: `I have no doubt that you have a great clarity of vision in understanding the correctness of what we are doing in that regard'-that the welfare cheats should not get their payments-and they nodded their agreement. I said: `It is a great pity that you do not have a symmetry of vision. You see that the people below you should not get payments if they are not entitled to them. It is a pity you do not have the symmetry of vision to see that the millionaires should not get their pensions'. Mr Goodluck —I am not worried about the millionaires. Mr HAWKE —The honourable gentleman says that he is not worried about millionaires. I believe him. I believe that the honourable gentleman does have a symmetry of vision. The great tragedy is that he sits behind a leader-and in a party-who does not have the symmetry of vision, who looks only at the people below him. I do not condone a person on the lower income scale cheating. This Government will do more than has been done by any other government to see that that cheating stops. But what I find hypocritical in the extreme is that honourable members opposite will tell the people at the lower level of the income scale, `You are cheats; you are not entitled', but the people behind whom the honourable member for Franklin sits-the Howards, the Carltons and the Sinclairs of this world-say that it is perfectly all right for those on the upper end to cheat. Mr Donald Cameron —Madam Speaker, on a point of order: You have already confessed to the chamber that you have a particular problem in maintaining order with the Prime Minister because-- Madam SPEAKER —Order! The honourable member for Moreton will resume his seat. He is coming very close to reflecting upon the Chair. Mr Donald Cameron —I would not want to do that. Madam SPEAKER — I also point out to the honourable member for Moreton that that is not what I said. I said to the House that the Chair gives a lot of latitude to the leaders of the parties. Mr Donald Cameron —In terms of an extension of that latitude, why do you allow him to describe the Leader of the Opposition as Howard and the shadow Treasurer as-- Madam SPEAKER —Order! The honourable member for Moreton will resume his seat. The Chair was about to tell the Prime Minister, but he was in full flight and, I might add, he is a little difficult to stop when he is in full flight. Mr HAWKE —Madam Speaker, let me rephrase my point by saying that I would have more respect for the honourable member for Franklin and his purported concern for the poor if he stood up and said to the Leader of the Opposition, the shadow Treasurer and all the rest of the dries who now dominate his Party- Mr Goodluck —Madam Speaker, on a point of order: I do not know what the words `wets' and `dries' mean. I would say that to anybody. Madam SPEAKER —Order! The honourable member will sit down. Mr HAWKE —Madam Speaker, I will make it a bit easier for the honourable member for Franklin because I know that he takes pride in being a simple man. I will put it this way to the honourable member: I will have more respect for him when he expresses concern for the poor in this country if he stands up publicly and strongly and gets the party of which he is a member to get the same symmetry of vision and to concentrate as much concern upon the rich who are ripping off the system, who have taken pensions when they are millionaires. If the honourable member would stand up on the issue of the fringe benefits system-- Mr Spender —Madam Speaker, I take a point of order. The question asked of the Prime Minister was: Does he regard it as obscene that he should attend an Australian Labor Party black tie fund raising dinner that cost $460 a double in order to foreshadow welfare cuts? Standing Orders provide that questions cannot be debated; that is provided in standing order 144. Madam Speaker, as you would well know, to debate means to discuss, to argue or to enter into discussion. Of course, that is exactly what the Prime Minister has been doing. The Prime Minister does not come in here very often so he probably does not understand how to answer a question. Madam SPEAKER —Order! The honourable member is now debating as well. Mr Spender —Madam Speaker, the ruling I would ask from you is that that provision applies to the answer and not to the question and I believe that that is the advice you will get from the Clerks. If you want to look at the history you will find that that is borne out by the background to the standing order itself. I ask you therefore, to make that ruling and to rule that the Prime Minister cannot answer in the way in which he is. Madam SPEAKER —I point out that there is a provision in standing order 144 that questions cannot be debated. It appears to have been overlooked for some 80 years as far as its application is concerned. However, as the standing order is still there, it is still usable. We get back then to the position where, once again, the Chair decides when a Minister has stopped answering a question and has started debating it. Once again we get back into this rather grey area-- Mr Spender —Judgmental area. Madam SPEAKER —It is a judgmental area which, as I have told you, in the matter of relevance, nearly always comes back to a question of opinion. Mr HAWKE —The question asked by the honourable member for Franklin went to what I regarded as obscene in the area of the poor. I simply conclude by saying that the greatest obscenity that I see in this area is where honour- able members on the Opposition side of the House concentrate-viciously, I might say-upon the poor in this country and seek to ensure that the poor have no opportunity to double-dip into the welfare area, while at the same time Opposition members steadfastly adhere to a position that, whatever the income and asset position of persons in this country, they should be able to dip into the welfare expenditures of this country and should have all the fringe benefits available. I will have total respect for the questions on this issue put by the honourable member for Franklin when he has that symmetry of vision. I think perhaps he has. It is a pity that he could not enforce those same views on those on his front bench. Then there would be decency within his Party, which is entirely lacking on this issue now. Mr MAHER —My question is directed to the Attorney-General. Has Australia recently signed a number of extradition treaties? If so, when will such treaties come into operation? Mr LIONEL BOWEN —Yes, as a result of work by the task force we have signed some 13 extradition treaties. A number of them will be in operation within a very short space of time; they just require appropriate ratification by the respective parliaments of Australia and the particular countries with which the extradition arrangements have been made. They are significant treaties because they bring Australia into the modern concept of looking at the law of Europe whereby extradition can apply when there is some statement of an offence and also the understanding that the person can be appropriately identified. It does away with the necessity that existed in the past of having to follow what were called the inherited treaties of the British, where there had to be some sworn evidence in addition to the statement of the offence. This is a modern concept; it is accepted by all of the European democratic nations and also by the United States of America. The treaties are very significant because a number of criminals in this day and age travel the world, and it is important to have modern extradition processes whereby those who are charged with an offence can be dealt with quickly and sent back to the country from which there is a complaint. I thank the honourable member for the question. I think that the extradition treaties, plus matters of mutual assistance and other legislation that is now before the House, will do a lot to overcome international criminal activity, it will be a direct attack on white collar crime, it will mean that criminal activity in the future will be monitored not only in respect of the person but also in respect of his assets, it will enable the criminals concerned to be dealt with in an appropriate fashion, and it will enable their assets to be confiscated. That should prevent their having the incentive to continue activity in the future. Mr BLUNT —My question is to the Prime Minister, and it is about symmetry of vision. Recently, while in Victoria, you stated your belief that the work test for the unemployment benefit needed to be tightened. You also echoed comments made by the Minister for Industry, Technology and Commerce, Senator Button, that up to 60,000 jobs remained unfilled, which cast doubt over the effective application of the work test. How do you reconcile these comments with those of your Minister for Social Security who has said on numerous occasions that moves to tighten the administration of the unemployment benefit have been very effective? Are you aware that an agreement between the Minister for Social Security and the Administrative and Clerical Officers Association renders ineffective your Government's measures to combat dole fraud and abuse? As you and your Minister for Social Security hold divergent views on the subject, which is correct, and how much longer do we have to put up with inadequate policies and sloppy administration? Mr HAWKE —The most direct answer to the question asked by the honourable member for Richmond as to how long one has to put up with inadequate policies in this country in terms of cracking down on welfare fraud is, simply, for as long as the honourable member and those around him oppose the legislation of this Government to bring in an identity card. That is the complete answer to the latter part of the question. So far as the first part of the question is concerned, I make two points: Under this Minister for Social Security more has to be done to tighten the administration of benefits in this area than has ever been done before, and he is properly to be congratulated. Secondly, further work is being done in this area. Under this Government more will have been done to ensure that benefits are not claimed by those not entitled to them. We will continue to ensure that the work is done at both ends of the spectrum; that those who should be taking jobs if they are available will be put in a position where they must take them. We will also by the continuation of our legislation be ensuring that those at the top end of the wealth and income scale will not be dipping into our social welfare expenditures. There will be total symmetry under the administration of this Government. I repeat that the answer to the honourable member's question `How long do we have to put up with an inadequate system?' is: So long as members opposite have got the courage and the decency to support the Australia Card. Madam SPEAKER —For future reference, I advise the honourable member for Richmond that questions should be phrased in the third person. Mr SIMMONS —I ask the Minister for Primary Industry: Is he aware of the pre-Budget submission to the Government by the National Farmers Federation and can he advise the House of the implications for farmers of the Government introducing such a package? Mr KERIN —I am a little reluctant to answer questions about the NFF because what I say might be interpreted as being political, unlike the statements of the NFF. I have had occasion to expose the politics of the National Farmers Federation in this House and they are becoming, if they have not already become, a pale echo of the Queensland Premier who has wrecked the former gutless coalition which did not have enough policies or principles, consistency or continuity to resist the ambitions of a 76-year-old man in the early stages of senile dementia. That is how good the coalition was; no wonder it split. Last year the NFF was severely embarrassed because the Government's Budget was in line with its suggestions on freezing spending and reducing the deficit. This embarrassed the NFF because it exposed its hypocrisy when, as usual, it criticised the Government. The NFF has now put in a submission to the Government on its views on desirable fiscal policy this year. By going completely beyond the pale it has made sure that there will be no repeat of last year's embarrassment. When it was announced that there would be a May statement, the NFF called for cuts of $10 billion. Des Keegan and Katharine West then said that they wanted cuts of $20 billion and so the next call by the NFF was for $20 billion in cuts. Not long after that $5.6 billion in fuel excise was added, and that is from the national priorities project for the Centre of Policy Studies at Monash University. The last bid was $28 billion-that is a $24 billion Budget surplus-which Mr McLachlan made recently in a speech. I would have thought that that figure was going a fair way along the road. The National Farmers Federation has put out a Press release calling for $11 billion in Budget cuts-the figure is closer to $12 billion-and it is still adding the $5.6 billion cut in revenue. The main suggestion in the NFF submission is the total abolition of all Commonwealth health expenditure-hospitals, medical, pharmaceutical, the lot-with the only exception being for pensions. The NFF suggests that the savings so created should be used to abolish the excise on petroleum products. One of the three Opposition primary industry spokesmen in this House-the honourable member for Gwydir-has supported this proposition. Perhaps the other two-the honourable members for Hume and Maranoa-should indicate their position as well. The implications of this policy to farmers would be disastrous. Apart from increasing poverty, such a policy change would do three things. Firstly, it would increase inflation. Contrary to the NFF's claim, the abolition of fuel excise would have a direct effect on the consumer price index of under 2 per cent. Even after allowing for all indirect effects, the total effect would not exceed 4 per cent. By comparison, such an increase in health costs would directly increase the CPI by more than 4 per cent. The net result would be a significant increase in this country's inflation performance. Secondly, the abolition of fuel excise would also mean, under hypothecation, abolition of Commonwealth road funding. As my colleague the Minister for Transport can confirm, everywhere one goes around Australia farmers want more money for roads. I wonder how the NFF reconciles these two positions. It even says that we could take $128m off road funding in any case. That is what the honourable member for Gwydir stands for. Finally, the abolition of the fuel excise would end the Commonwealth's cost recovery policies with respect to air transport. Again I wonder how the National Party's shadow spokesman on primary industry, who has waxed so eloquently on air transport issues in this House, reacts to that. Overall the NFF in a letter to me-I think this is contained in its Press release-says that this is all politically feasible, that one can have $5,000 per head university fees, and one can get corporate sponsorship of the Australian Broadcasting Corporation straight away. Basically, it wants to wipe out the ABC and the Special Broadcasting Service, and it wants to take a billion dollars from the States-dead easy; a nice round figure. This is supposed to be politically feasible. So we have gone from the years and years of misrepresentation of the farmers by the National Party; the National Farmers Federation is now misrepresenting the interests of its constituents. Mr BEALE —My question is directed to the Minister for Communications. Government members interjecting- Mr BEALE —The Prime Minister missed me in the tax shuffle, so I thought I would have a go at Duffy. Has the Minister received a letter from the Chairman of Telecom Australia stating that Telecom `under current arrangements is not competitive'? Has the Chairman of Telecom asked the Minister to frame legislation to exempt Telecom from the provisions of the Trade Practices Act? Is the Minister aware that any such exemption would be made at the expense of Australian consumers, including, as I tell the Prime Minister, the poor, and also Australian business and Australian exporters? Finally, will the Minister table the relevant correspondence on this matter? Mr DUFFY —I thank the honourable member for his question. The position is that the first instrument policy is one among a range of interrelated domestic and international telecommunications issues which this Government is currently addressing. We are doing that in consultation with the industry, users and the unions. In a recent speech to the Australian Telecommunications User Group I outlined some of the matters which are under consideration and pointed out the need to avoid simplistic solutions. Those involved in the industry know that workable solutions are not to be found in a simplistic debate about deregulation and privatisation. As the honourable member may or may not be aware, over the past five to six years we have seen a move towards more competition. This process will continue, but this Government does not want to see Australia's great achievements in domestic and international communications compromised. In adapting to sensible change, I do not believe that we should be rushed into any precipitate moves without very careful examination. In relation to the matters raised by the honourable member regarding the first instrument policy, I find it extremely interesting that on 3 May he issued a Press statement which stated: `Minister Duffy should immediately order telecom to end its monopoly on the supply and installation of phones', Julian Beale, Federal Member for Deakin and Shadow Minister for Communications, said today. He then stated that the Government would be outraged if a government business were exempted from the provisions of the Trade Practices Act-- Mr Beale —The public would be outraged. Mr DUFFY —The public, yes. Mr Beale —You said the Government, but it is the public that will be outraged. Mr DUFFY —I am sorry. The honourable member's Press release is difficult to follow. That was my mistake. He then pointed out further that I should not duck the opportunity to take swift action to benefit both consumers and manufacturers. Mr Beale —Hear, hear! Mr DUFFY —Hear, hear, yes. The honourable member should just wait. The interesting aspect is that the honourable member seems to take a view that in some strange way the first instrument policy is of some benefit to Telecom and not to anyone else. I do not know whether the honourable member has bothered-it does not seem that he has had the time-but I suggest he ought to have a bit of consultation with private enterprise before he goes into print so readily. If he has a discussion at the moment, for example, with STC and AWA in the private sector-- Mr N.A. Brown —They get contracts from Telecom. Mr DUFFY —Where else would they get them from? The honourable member might be interested to know-and I quote from a Press release from Telecom- The first telephone instrument supplied to our customers is 100 per cent designed, developed and manufactured in Australia. More than 1,000,000 are manufactured annually in association with STC and AWA. As well, Australia is the only country to have a fully electronic telephone-a result of Telecom's commitment to the Australian manufacturing industry . . . Mr Ward said Telecom's current purchases accounted for about three quarters of the total Australian telecommunications industry output . . . This financial year, Telecom will spend more than $1,450m on technical equipment and material . . . and $70m on research and development. If the honourable member is suggesting, as it appears he is, that this Government says just now that the first instrument policy is ended, he is in cloud-cuckoo-land. What this Government has to do is carefully analyse the policy ramifications of the opinion which has been given by the Trade Practices Commission. It is likely that we will have to work out very carefully a policy to phase in this deregulatory situation, over a period of time. It is going to take time unless the honourable member wants total chaos with an enormous flood of imports in relation to telephones, which would be devastating to Australian industry. The Government will be giving this matter urgent consideration but that consideration will not be in the precipitate sort of manner that the honourable member has indicated in his Press release. I think it would have been better to have given more thought to this matter. It is a bit like the honourable member's Press release on 29 April when he said: The defeat of the Government's regional TV proposals in the Senate last night opens the way for more choice for Australians outside the major cities. This is attributed to Julian Beale, et cetera. Mr Young —It is a choice between television and newspapers. Mr DUFFY —Exactly. He continued: It was the Government's aim to stifle viewers choice by forcing a rigid three station arrangement on the community. That Press release is almost as ridiculous as the one the honourable member issued on 3 May. If he just thought about this issue for a while he would see that it is far more complex than one that can be solved by the sorts of simplistic solutions that seem to jump into his mind. Mr HODGMAN(Denison) —I seek leave to make a personal explanation. Madam SPEAKER —Does the honourable member claim to have been misrepresented? Mr HODGMAN —Yes, I do. Madam SPEAKER —Please proceed. Mr HODGMAN —I refer to the waspishly malevolent Ian Warden, whose article in the Canberra Times on Saturday 2 May, grievously misrepresented me on three counts: Firstly, I did not lose a wing, metaphorically, politically or physically. Secondly, I was not left speechless, either then or subsequently. Thirdly, I am not stupid-and certainly not so stupid as to fail to notice that I got under the skin of the Prime Minister (Mr Hawke) and that the Prime Minister is positively delighted to see me continue to languish on the back bench. The Clerk —Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers: To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble Petition of the undersigned citizens of Australia respectfully 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. by Mr Conquest,Mr Fife and Mr Nehl. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth. We most strongly oppose the process of Food Irradiation by radioactive Cobalt 60 or any other radioactive substance. We oppose the introduction of regulations that will facilitate the food irradiation process by State Governments. We express our deep concern at this attempt to extend the use of radioactive substances and exposure of workers to radiation. We call on the Government to immediately ban the importation of radioactive Cobalt 60 or other radioactive substances and to immediately disallow the regulations that permit the irradiation of food here in Australia. And your petitioners as in duty bound, will ever pray. by Mr Langmore,Mr Macphee and Mr Scott. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth: That there is widespread community concern about the proposal to irradiate food in Australia Your petitioners, most humbly pray that the House of Representatives in Parliament assembled, should: (1) Block the introduction of food irradiation into Australia and (2) Ban the import of cobalt-60 and caesium 137 and caesium 134 to be used to irradiate food products, And your petitioners, as in duty bound, will ever pray. by Mr Macphee. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That we consider the 2% discounting of Commonwealth Occupational Superannuation Scheme pension adjustments on 10 October 1986 to be a serious breach of trust by the Government. The Commonwealth has reneged on an established commitment as incorporated in Commonwealth legislation and benefit promise pensions are not being paid in full. In particular we resent the long-term effect of the discounting. The pension loss is compounded throughout the life of a pensioner and surviving dependants-into the 21st century for many. We consider this Government-induced penalty to be out of all proportion to the short-term ``extraordinary circumstances of the economy'' given as the reason for the discounting. Your petitioners therefore humbly pray that the Government: 1. limit the pension discounting effect of the Superannuation and Other Benefits Legislation Amendment Act 1986 to the period 10 October 1986 to 1 July 1987 so that pensions are restored to the 9 October 1986 level as a base for the 1987 pension adjustment; and 2. consult with organisations representing pensioners before changing the terms and conditions of Commonwealth Occupational Superannuation Schemes. And your petitioners, as in duty bound, will ever pray. by Mr Cobb and Mr Snow. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The Petition of the undersigned citizens of Australia respectfully showeth that the intention of the Hawke Government to unionise independent contractors, sub-contractors, the self-employed, partnerships, sole traders and family businesses will remove the freedom of independent small businesses to: (a) set their own prices (b) work their own hours (c) control their own businesses (d) negotiate their own contracts; and will create impossible working conditions which will include the payment of: (a) union superannuation (b) compensation (c) payroll tax (d) annual leave loadings (e) public holiday loadings (f) PAYE tax deductions (g) limited incomes (h) inflexible awards and conditions; and (i) fixed hours of work. We the undersigned call upon the Government to restore incentive and opportunity to the Australian economy and abandon these coercive measures. And your petitioners as in duty bound will ever pray. by Mr Beale. To the Speaker and the Members of the House of Representatives in the Parliament assembled. The petition of certain citizens respectfully showeth that: The Hawke Labor Government's ID Card proposal is the most far reaching and intrusive piece of Australian legislation yet introduced, and that on all the evidence available, it will not tackle in the most cost-efficient and effective manner tax and social security fraud. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Reject Labor's ID Card proposal to prevent a gross waste of taxpayer's money and a significant infringement of civil liberties. And your petitioners as in duty bound will ever pray. by Mr Cadman. To the Honourable the Speaker and Members of the House of Representatives assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That we strenuously object to the proposal that many post office agencies are to be closed. They provide a network of offices with postal and agency services to residential areas and small communities. They serve a community need and we would be seriously inconvenienced if forced to travel further to purchase postal items or collect parcels. It would be an unnecessary expense particularly for pensioners without their own transport. We maintain the purpose of Post Offices should be to serve the public for the variety of services they offer. They are a community centre particularly in country areas and if necessary they should be subsidised to retain them. Your petitioners therefore humbly pray that the House should take all possible steps to prevent the closure of post office agencies and that the network should be extended, with the Agency services they offer expanded. And your petitioners as in duty bound will ever pray. by Mr Cadman. To the Honourable the Speaker and Members of the House of Representatives. The petition of the undersigned respectfully showeth that the Fringe Benefits Tax is an iniquitous and unjust impost which will further damage the Australian economy and further increase costs to employers. The Tax will: (1) further increase the level of unemployment; (2) increase the administrative costs and overheads for business and Government; (3) particularly disadvantage small businesses and farmers; and (4) act as a disincentive to those who are the most productive and skilled; and we the undersigned call upon the Government to immediately repeal the Fringe Benefits Tax. And your petitioners, as in duty bound, will ever pray. by Mr Cadman. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: That the time taken of at least six to eight weeks to process applications for the Austudy tertiary allowance in Brisbane is intolerable and causes severe hardship and distress to many students. Your petitioners therefore humbly pray that the Government takes every action to minimise the delay in processing applications for the Austudy tertiary allowance. And your petitioners, as in duty bound, will ever pray. by Mr Cross. To the Honourable the Speaker and Members of the House of Representatives in Parliament 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. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This humble petition of the undersigned citizens of Australia respectfully showeth that they are totally opposed to any change in the present Australian National Flag as declared in the Flags Act (1953). Your petitioners humbly pray that Parliament in its wisdom will take no action to change in any way the Australian National Flag. And your petitioners, as in duty bound, will ever pray. by Mr Tim Fischer. To the Honourable the Speaker and the Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens respectfully showeth that your petitioners are gravely concerned at the failure of the government to show restraint with equity. In particular, the decision to defer the November pension adjustments has resulted in a loss of $25.62 for a single pensioner and $21.36 for each married pensioner. The prospect of a further deferral of the May adjustment will result in the loss of another $35.10 for a single pensioner and $29.10 for each married pensioner. When you are scrimping to make ends meet, as is the case with many pensioners, you can't afford such a cut in living standards. Pensioners are looking for a new deal from politicians-more of the same is not good enough! Your petitioners request an immediate return to payment of May and November C.P.I. increases, and as in duty bound will ever pray the Government grant this request now. by Mr Humphreys. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The humble petition of the undersigned citizens of Australia respectfully showeth: (1) That Moreton Island has been listed on the Register of the National Estate because of its exceptional scientific, ecological, heritage and recreational values; and (2) That any sand mining of Moreton Island will result in the destruction of the exceptional scientific, ecological, heritage and recreational values of the Island; and (3) That Moreton Island has been the subject of detailed investigation resulting in the adoption of a Management Plan by the Brisbane City Council the main aims of which are to conserve in its natural state the quality of its scenery and natural environment and to enhance public enjoyment of it for recreation purposes; and (4) That Moreton Island represents the last significant area of wilderness close to Brisbane; and (5) That there is an acute deficiency of National Parks within a 150 kilometre radius of Brisbane; and (6) That Moreton Island contains Aboriginal Relics of immense scientific and cultural importance; and (7) That the Island represents a major potential tourist resource specifically because of its unspoiled natural scenic attractions; and (8) That public opinion actively demonstrated over a number of years clearly indicates that most citizens of Brisbane are strongly opposed to any sand mining on the Island, and desire that the whole of Moreton Island with the exception only of existing Townships, Tourist Resort, Airstrips and Lighthouse Reserve should be declared a National Park. Your petitioners, therefore, humbly pray that the Parliament of Australia will: (a) accept the wishes of the petitioners and the citizens of Brisbane generally and take whatever action is necessary and available to it to prevent sand mining of any description taking place on Moreton Island; and (b) request the Government of the State of Queensland to take immediate action to declare the whole of Moreton Island to be a National Park with the exception only of existing Townships, Tourist Resort, Airstrips and Lighthouse Reserve. And your petitioners, as in duty bound, will ever pray. by Mr Keogh. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The petition of concerned members of the public interested in natural therapeutic medicine respectfully showeth: That there is no qualified Scientific Herbal researcher on the Government Committee as a representative from the Natural Therapy organisations. Your petitioners therefore humbly pray that your Honourable House appoint a Scientific Herbal Researcher to the Government Committee investigating the proposed amendments to the National Register of Therapeutic Goods for Human use and that those individuals educated and actively involved in the use, manufacture, and prescription of natural substances for health care be represented on any committee and boards formed to consider matters related to natural therapies, and ask for a two year moratorium to evaluate these products. And your petitioners, as in duty bound, will ever pray. by Mr Peter Morris. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of certain electors of Australia respectfully showeth: That the North Coast section of the Pacific Highway, from a point just south of Port Macquarie and just north of Woolgoola, is in urgent need of major road improvement works in order to bring it up to road safety standards. Your petitioners therefore humbly pray that the Federal Government immediately divert National Highway funds or make available other funds towards the improvement of this section of the Pacific Highway. And your petitioners, as in duty bound, will ever pray. by Mr Nehl. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Richmond electorate respectfully showeth that: 1. We the undersigned are totally opposed to the introduction of a $2.00 fee on prescription drugs for pensioners; 2 The impact of such a fee will be particularly felt by the chronically ill elderly who will be faced with a $2.00 burden with the purchase of each Pharmaceutical Benefit Scheme drug; Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Ensure that prescription drugs continue to be provided to the pensioner population without the $2.00 fee on each prescription. And your petitioners, as in duty bound, will ever pray. by Mr Blunt. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Richmond electorate respectfully showeth that: The Benefits of War Widows have been altered, and they no longer receive Pharmaceutical Benefits from the Department of Veterans' Affairs. This is causing great concern and hardship, as quite a lot of their medications are no longer available, and nothing to replace them on National Health. They are now required to pay large amounts to obtain their medications, just to stay alive. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Honour its commitment to these War Widows by: Returning their Veteran Affairs Pharmaceutical Benefits to them immediately, and to refrain from worrying these ageing widows any further by tampering with our Veterans' Affairs Act and breaking all promises made to our husbands. And your petitioners, as in duty bound, will ever pray. by Mr Blunt. Petitions received. Madam SPEAKER —I have received a letter from the honourable member for Richmond (Mr Blunt) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The hardship caused to Australian families and aged pensioners through the Government's failure for 4 years to deal with massive social security fraud and overpayment. 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 BLUNT(Richmond)(2.52) —Today we have before the House a very important matter, a matter which this Government has no stomach to address-and that is the inadequacy and inappropriateness of its welfare policies and the consequences of those inadequacies for Australian families and age pensioners in the entire budgetary process. The reality is that this Government and the Minister for Social Security (Mr Howe), who is at the table, have let down the Australian population as a whole. As a result of this Government's inadequate welfare policies we have a crisis in welfare and we are about to see further pain inflicted on Australian families and pensioners. Before beginning the detailed facts that I intend to put before the House today, I will have a look at this Government's record. Its record is appalling. Many people are aware of the cost of welfare to Australian taxpayers but not many people know what it is in terms of each worker. In Australia today we spend $60 per week per worker. For every person employed in Australia today earning wages or a salary, and paying tax, this Government spends $60 on welfare. Honourable members should think about that when they pay their tax bills, because $60 per worker goes into this Government's welfare budget. It is also important to note that following this Government's term in office there are 430,600 more people on welfare than there were when it came to power. That says a lot for the much vaunted economic policies of the Hawke-Keating Government. They have been an absolute failure, matched only by the inadequacies of its welfare policies. As I said, this Government has inadequate welfare policies and sloppy administration. When campaigning in 1983, the Prime Minister (Mr Hawke) made a series of promises to the aged in Australia. He promised to increase pensions to 25 per cent of average weekly earnings. He promised regular and full indexation of pensions in Australia, and in a 1983 policy speech he said that his Party would increase the dependent spouse rebate. Selectively over the past couple of days this Prime Minister and other Ministers in his Government have been leaking to the Press Gallery what they propose to do in the next few weeks about the age pension and assistance to families in Australia. According to these selective leaks emanating from the Prime Minister's office there will be partial indexation of pensions, not full indexation on a quarterly basis. We will also have means testing of the dependent spouse rebate-the absolute opposite of what he promised, an increase in that rebate. Also we will have means testing of family allowances. I hope that the Prime Minister will tell us how much it will cost to means test family allowances, what the savings will be, what this means in terms of horizontal and vertical equities, and what it will do to the labour market. I am sure that the Minister at the table understands exactly what happens when a government goes in for hip-pocket and top-of-the-head reactions on family allowances. The Prime Minister is also talking about cutting the Medicare rebate, when Medicare was to provide cheap and effective health costs for all Australians. When the Government was seeking office it made a series of promises. Let us have a look at what it did when it achieved office. The first thing that the Government did was to decide who was an easy mark in Australian society. The Prime Minister decided that the aged and the retired in this community were a very easy mark, a slow moving target that he, his Government and his Ministers could have a go at whenever they liked. The list of the Government's attacks on the aged is long and extremely embarrassing. The list is of no credit to any member of the Government. First, the Government introduced the assets test. We all know what hardship that caused and what a mess it was. We know that we have the fifth version of the assets test, and we know that it still does not work. We then had the withdrawal of earnings concessions. The Government withdrew the ability of pensioners to average the few dollars a week that they make to supplement their pensions. At the same time, the Government provided averaging for Australian sportsmen and women. What about a bit of consistency? We penalise the pensioners and give a benefit to sports people. There was no increase in the pension to 25 per cent of average weekly earnings, the Government deferred the consumer price index adjustments and, of course, the Government has restricted the access of pensioners to the free drugs list. The Government's record in relation to the family is just as bad-in fact, it is worse. This is the Government that introduced a means test on family allowances for 16- and 17-year-olds but which still persists in paying an un-means tested unemployment benefit to 16-year-olds. It is positive discrimination against people getting an education. The Government makes it harder for families to keep their kids at school but provides a $50 cash in hand payment for any child who for one reason or another at the immature age of 16 decides to drop out. That is socially irresponsible. It is almost a crime against society. It is in the same category as the Government's proposal last week to pay the supporting parent benefits at the married rate to women under 16 years living in de facto arrangements. That is the sort of social engineering that is occurring within the Government's welfare policies. They are policies determined to change the structure of our society, not to provide assistance to those in need. One would think that this Government had a hatred of the family, that it was anti-family. It has implemented policies that have done nothing but penalise families in Australian society. This is the Government which, since it came to office, has introduced 16 new taxes, which taxes have reduced the disposable income of all Australian families. The average Australian family is $31 a week worse off now than it was in 1983. There is not a family in Australia that does not know that it is worse off now than when the Hawke-Keating Government came to power. Families know the reason why. They know it is because of the new taxes and the high interest rates. They know it every month when they make their mortgage payments, they know it every week or fortnight when they pay their rent, and they know it every time they go to a supermarket and encounter the so-called 10 per cent inflation. A basket of food that cost $80 in 1983 costs $105 today, and it is directly the result of the economic mismanagement of this Government. It is a government that has lost control of the economy, a government that is determined to change the nature of Australian society, and a government that is anti-family. It is a government that is prepared to spend money that it knows it does not have, a government that is prepared to increase Australia's foreign debt to $100 billion. It is a government that is not prepared to make tough decisions, a government whose policies are all top of the head reactions, and a government that does not crack down on fraud and welfare abuse. We have got to the stage in Australia where we can no longer tolerate irresponsible government and fiscal irresponsibility. In terms of the family and age pensions, it is about time this Government came down to earth and said: `Enough is enough; we are not going to attack the family again. We are going to back off the pensioners; we are going to do something about welfare fraud. We are going to stop the billion dollar a year rip-off that occurs at present; we are not going to simply make a few changes that save us $10m here and $100m there'. Those sorts of changes inflict considerable pain on the majority of Australians. The majority of Australians support this country, go out to work every day, try to earn a living and try to put a few dollars aside so that they can give their family a better opportunity and a better future. They are trying to keep their kids at school and to buy the food, clothing and shoes that are necessary to keep their families going. It is about time we cracked down on the welfare slime. It is about time we had a bit of principle. It is about time we had a go at the holy cows of the left wing in this country. Seven hundred and fifty thousand Australian children are living in poverty, which is many more than when this Government came to power. The honourable member for Melbourne (Mr Hand) knows this. The spokesman for the left wing is embarrassed to admit it, but he is prepared to say it. It is about time the Government recognised that the consequences of its policies are directly hurting Australian families, and it is about time it came to grips with that and turned its policies around. In the next couple of weeks we do not want to see from this Government a further resort to expedient policies, to policies that pander to those people in the Government who will resist at all costs an attack on the structural problems that this Government has institutionalised within its budgetary process. We have to do away with political pork-barrelling. We have to do away with funding the left wing, trendy causes. We have to recognise that the basis of Australian society is the family. We have to support the family. We have to support education for children. We have to support the dependent spouse, the person who chooses to stay home and provide the parenting role for the family. We cannot afford a continuation of those policies which are destroying the family, which are putting immense economic and social pressure on family units and which are encouraging the breakup of the family and therefore putting further pressure on the Australian taxpayer through the ever increasing welfare demands of this Government's policies. We have over 600,000 people on unemployment benefit in this country. We have 60,000 unfilled jobs. We have no commitment from this Government to work out who is part of the black economy, who is actually working for cash but drawing unemployment benefits. It was only a few weeks ago that the Minister made a series of statements that all was well within the welfare area. He said that moves to tighten up the administration of unemployment benefits have been very effective. At the same time he was doing a deal behind closed doors with the Administrative and Clerical Officers Association to undermine the so-called review of the long term unemployed. Now there is no obligation within the Department of Social Security on any officer to ask any questions of anyone in the long term unemployed category. The only obligation that has been imposed under the agreement with the union is for the officer to get one signature on the last page of the interrogation form. The Minister reckons that his measures have been effective. He is running the greatest con job that we have ever seen in relation to this Department. In August 1986 the Minister warned welfare cheats that their days of defrauding the system were numbered. In September he attacked the Opposition for criticising the weakness of government initiatives to tighten procedures. He sold them out last month. Last October, with great fanfare, he announced his measures to toughen the welfare system against fraud and overpayment. Last November he said that no government has done more to fight welfare fraud than this one. He is not even fooling himself. He is not fooling the Prime Minister; he is not fooling the Treasurer (Mr Keating); he is not fooling the Minister for Finance (Senator Walsh); and he certainly has not fooled the Australian people because everybody knows that welfare fraud is widespread and insidiously ingrained and in the Australian society. For four years he has sat on his hands and not only has he done nothing but he has also condoned it-he has aided and abetted it. The last straw was his sellout of the so-called review of the long term unemployed in the past couple of weeks. It is about time we had some effective anti-fraud measures in this country-not measures attacking the family, not the abolition of the dependent spouse rebate, not the means testing of family allowances but effective anti-fraud measures to bring to justice those people who are ripping off the system. Last year in this Parliament the Treasurer said that 10,000 people who are on unemployment benefits should not be getting them. More than 10,000 people who are on unemployment benefits should not be getting them, but this Government has not caught them. It announced with great fanfare that its hit squads would come up with a great toll of people who are cheating the system. It caught 1,500 people between the Budget in August last year and April this year. It has another 7,500 to catch in about six weeks to meet the Treasurer's estimate. It cannot be done because the Department has no manpower resources to enforce the restrictions and the eligibility requirements of social welfare. Let me also tell honourable members that when the Government does catch someone it does not prosecute. Last year this Government prosecuted only 1,800 people for welfare fraud, not in the area of unemployment benefits but in the whole range of welfare payments. Four million people are getting benefits and, according to the Treasurer, there are 10,000 people getting benefits to which they are not entitled. What sort of a record is this? It is an absolute disgrace that this Minister and this Government continue to penalise those people who cannot fight back-the aged in our society and those people who are seen as an easy target, Australian families-and allow the welfare slime to go unapprehended and unpenalised. This is the Government that ran an amnesty for welfare cheats saying: `Come in and tell us what you have been ripping off from the system and we will forgive you and write it off''. The Government gave away $20m or more. Instead of cracking down very hard after that, it has done nothing. It sold out to the ACOA. The reason the ACOA put such demands on the Minister was that there is no manpower within the Department of Social Security to implement the test, because it would rather put effort into giving money away than into making sure that people who are getting the money deserve it. Today in Question Time we saw the Prime Minister, stuck for an answer, say that the real problem in the welfare area was one of identification. The Minister knows, just as I know, that identity is not a problem within the Department of Social Security. If it is, the Minister should resign on the spot because one of the most significant aspects of this agreement in which he sold out to the ACOA was that he do away with any requirement for officers of his Department to obtain proof of identity. The Prime Minister knows that the questions that went by the way were those which related to proof of identity. Yet he sat there with his eyes on the carpet while the Prime Minister said we need the identity card. If the Minister were really worried about-- Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. Mr HOWE(Batman-Minister for Social Security)(3.07) —I cannot say that I have ever been more delighted to have the opportunity to deal with the honourable member for Richmond (Mr Blunt) than I am in this particular debate, because what we have heard was I think the most outrageous run of the mill, emotional bilge in the history of this Parliament. Frankly, it is time that not only the honourable member for Richmond but both of the oppositions got down to some serious thinking about policy. Let me say that I have no difficulty at all in defending the Government's record and, indeed, the statement of the Prime Minister (Mr Hawke) that no government has done more with respect to seeking to ensure the integrity of the welfare system than has the present Government. As recently as the last Budget we have introduced a number of measures, for example, with respect to beneficiaries: The compulsory continuous registration with the Commonwealth Employment Service, the personal lodgment of claim forms, the selective review teams, the measures with respect to interviewing supporting parents and positive stimulus for them, entitlement checks and so on. Indeed, we know that collectively those measures have been so successful that, rather than there being a reduction of 10,000 in the average number of people on unemployment benefits in 1986-87, as projected in the Budget, the decrease has been of the order of 25,000. With respect to the targeted reviews that have been carried out, there is no doubt that they, too, have been successful in achieving their objective. I do not want to stress that. I think the facts are obvious. I think people understand that the situation has certainly changed quite dramatically in this Government's period in office. I want to take the honourable member for Richmond back to April of 1981, because at that time there was the equivalent of what would be called today a May statement. At that time the Prime Minister of the day announced, in his statement on the review of Commonwealth functions, some very interesting things. We find that what was suggested was: In future claim forms for unemployment benefit and fortnightly income statements will be lodged directly with the Department of Social Security. The requirement that unemployment benefit claimants visit CES offices fortnightly is to be removed. The requirement that unemployment benefit claimants visit Commonwealth Employment Service offices or, indeed, Social Security offices fortnightly is to be removed. The statement goes on to talk about some other measures. Honourable members will recall that in May 1981 the number of unemployment beneficiaries in this country was 301,890. By May 1983 that figure had risen to 627,064. In other words, there had been a massive increase of more than 300,000. If we look at the average payment that is made per beneficiary, including families, which is of the order of $7,330, we find that a cost of $2,383m per year was added in that period by the conservative Government. The previous Government effectively removed all the controls and we then had that massive blow-out in the number of beneficiaries. That resulted in a very significant rise in this country's social security bill. Most of our problems in the social security expenditure area go back to that period. There has never been more rubbish or more codswallop delivered to this House than that which has been delivered by the honourable member for Richmond. No member of this House is more willing to pillory the unemployed for the mistakes of the conservative Government in that period than the honourable member. No member is less willing to examine the evidence and make a fair and objective analysis of it. Let us go back to April 1981 when a rigorous analysis of government expenditure and government functions was carried out by the conservative coalition of that time. What did that rigorous analysis save? It saved a lousy $500m of ongoing expenditure and, in the next two years, $2 1/2 billion was added to the welfare bill by the unemployment benefit alone. Of course, as the Prime Minister suggested during Question Time today, there is one simple test to show whether the National Party of Australia-let us take just one section of the Opposition-is serious about dealing with fraud and overpayments in social security and the massive blow-out in tax fraud of $4 billion a year, and that is its reaction to the Australia Card. By that simple test we ought to know one way or the other whether it is serious about wanting to deal with overpayments and fraud. We know that, as a result of the introduction of the Australia Card, savings would be of the order of $1 billion a year. So that is a very serious measure and it is a very serious test. Let us have a look at the real views of prominent members of the National Party. What is the view of the Deputy Leader of the National Party, the honourable member for Gwydir (Mr Hunt), who is sitting in the House? In June 1985 he said: The proposed national identification system offered dual benefits to the Australian people. The use of plastic cards for an effective means of identification would streamline the collection of tax revenue, imposing a greater accountability on that small minority of taxpayers who sought to evade their responsibilities to the community. The second major benefit would be to cut down on fraud affecting Government outlays . . . That is what the Deputy Leader of the National Party was prepared to say, publicly, in a media release dated 5 June 1985. What is the view of the honourable member for Richmond and former shadow Minister for Social Security? On 8 June 1985, at a similar time, he had a very clear view. He said: The use of plastic cards as a means of identification would streamline the collection of tax revenue, imposing greater accountability on that small minority who seek to evade their responsibilities. The honourable member for Richmond then said: Another majority benefit would be a reduction of fraud affecting Government outlays, especially social welfare payments. He went on to say: With the Government's White Paper on tax reform recommending the introduction of ID cards, there is now a broad bipartisan support for this measure. So this person who told the Parliament that he really believes the standard of living of the Australian people is depressing is on record as supporting the Australia Card in June 1985. He is now opposed to it. Yet he tells the House that that is the crucial issue in relation to depressing people's standards of living. He may subsequently have varied his view and may say that the Australia Card is irrelevant. Let me give the House some examples of fraud which have occurred and which have been detected by my Department and the Australian Federal Police. One case concerned a person with 20 claims involving a sum of $400,000 secured in unemployment benefits. That person made 20 different claims posing as 20 different people; therefore the question of identity was crucial. Another case involved 10 claims and $150,000 being received by a person pretending to be 10 different people. The third case involved six claims involving a sum of $170,000, that person representing himself as six different individuals. The honourable member for Richmond, who has told the Parliament with great passion that he is concerned about fraud, opposes the Australia Card, even though he is on record as supporting the card before he was pulled into line. I lay a challenge to the honourable member for Richmond, and indeed to the honourable member for Gwydir. Let us know the views of the rank and file members in the National Party branches on the Australia Card. I would be very surprised if they did not support it. I will be very surprised indeed if they do not urge their members to support the Australia Card if there is another opportunity in this Parliament, particularly now that those members are freed from the shackles of coalition. The honourable member for Richmond dealt to some extent with the question of declining living standards. That is a good thing to talk about. I am sure every member of the Parliament is concerned to ensure that, as far as possible within our economic circumstances, we preserve people's living standards. But we must ask how we are to achieve the maintenance of living standards. It can be done in a range of ways-for example in terms of wages policy. Clearly, wages policy is crucial to the maintenance of living standards, if that is what one is serious about. The coalition in 18 of the last 20 wages cases has called for a freeze-no increase at all. If it had been successful on every occasion what would that have meant for the standard of living of the average Australian family? It would have meant a cut in wages of $100 a week. But a person's real standard of living is not only built on what that person receives in wages. It is also related to taxation. The Government has recognised that factor, and it is why we have had a tax summit and why we have come in with a tax reform proposal. It is why somebody on average weekly earnings, in addition to some maintenance of wages-not full maintenance-received a tax cut in December, and will again receive a tax cut in July this year of some $10 a week. But a person's standard of living is built on more than wages, on more than how the Government treats that person in taxation. It is also built on the support that is provided for so many people through government outlays. The recent study by the Australian Bureau of Statistics on the effects of benefits and taxes on household income said: Lower income households gain appreciably more from Government outlays than they lose in taxes. One major explanatory factor is that lower income households also have a greater number of aged persons who, in most part, are receiving age pension. In terms of government outlays through social security we are concerned to provide direct payments to maintain the real standard of living of people in the community. The honourable member for Richmond mentioned the subject of age pensions. Let me point out that, in our period of government, pensions have increased by 5.7 per cent in real terms. Whereas pensions stood at 22.7 per cent of average weekly earnings when we came into government, they currently stand at close to 24 per cent. Under the previous Government's administration we saw pensions decline in real value by 2.4 per cent. Clearly, other factors also affect the real standard of living of people-not only tax cuts and the maintenance of wage levels but also the introduction of the first home owners scheme for young families. Some 230,000 young families have homes as a result of that scheme. Under the first home owners scheme families can get up to $6,000 for a deposit compared with the $3,500 which they got under the previous government. The scheme provides assistance for people earning up to $34,000. It takes account of dependent children and is of enormous importance. Similarly, this Government has introduced and sustained Medicare which, according to the Opposition's policy, is perhaps its highest priority for spending cuts. The removal of Medicare benefits and a hospital subsidy for everyone except pensioners and the poor could cost families up to $27 a week. Let us not be under any illusions as to what the Opposition's policies are really about; they are about not increasing the standard of living of Australian families and shifting the burden off the wealthy more and more on to average families. We know from the Opposition's secret plan, which was leaked some time ago, that the Opposition is singling out the indexation of pensions for a priority cut. We heard the honourable member for Maranoa (Mr Ian Cameron) from the National Party talking about the need to have pensioners squealing like stuck pigs as their pensions are frozen. Let us be under no illusions: The Opposition parties are parties of big business and capital; they are not parties of ordinary people. When the honourable member speaks of welfare fraud, he really is talking about cutting the standard of living of people on pensions and benefits and of the poorest families. He is also talking about cutting wages. He is talking about reducing the real standard of living of Australian families. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The Minister's time has expired. Mr Hunt —Mr Deputy Speaker, I claim to have been misrepresented. Mr DEPUTY SPEAKER —Was it during the debate? Mr Hunt —Yes, just recently. Mr DEPUTY SPEAKER —The honourable member might wait until the end of the debate on the matter of public importance. We can deal with it then. Or does he wish to correct a matter that arose in the debate? Mr Hunt —Yes, indeed. Mr DEPUTY SPEAKER —I call the honourable member for Gwydir. Mr HUNT(Gwydir) —Thank you, Mr Deputy Speaker. The Minister for Social Security (Mr Howe), who has just resumed his seat, quoted me from a Press release in June 1985. I have already explained to the House that, after studying the report of the Joint Select Committee on an Australia Card, I issued a further statement renouncing my support for an identity card for the reasons that were outlined in that report. Mr CONQUEST(Hinkler)(3.23) —It appears that the Minister for Social Security (Mr Howe) is a little unsure of the position of the National Party of Australia in regard to the Australia Card-the identity card for all Australians. I make it quite clear that the National Party is opposed to the identity card and it will remain so. It is quite clear that the Australia Card-the identity card-will not correct the faults in the system on which the Minister dwelt. All of the problems to which he referred in his speech could be remedied without introducing a card for all Australians. The Australia Card, which this Government is trying to bring in, is supposed to reduce the number of rorts engaged in by people who are cheating the system. Yet the Department of Social Security claims that only 2 per cent of welfare fraud is due to identification problems. How does the Minister reply when his Department claims that only 2 per cent of people will be caught through identification? If we go back to the introduction of the Australia Card we will find that this Government has been less than truthful in the manner in which it has handled the matter. If one looks at the Outline Plan of the Health Insurance Commission, one will find that it believes that the Australia Card would be used for more than just trying to catch the so-called rorts of the social security system. The Health Insurance Commission, in its Outline Plan for the identity card, which was prepared for the interdepartmental committee, has no doubt that the scheme would be used without restriction by all governments, both State and Federal. If one looks at the number of people who attended the first meeting of the interdepartmental committee, one will see that they represented most of the departments that will in the end utilise the national identification system that this Government will introduce. But the Government knew quite well that it could not sell it to the Australian people if it told them that a profile of each person would be established from birth to death. The Health Insurance Commission in its Outline Plan also admitted this. It stated: It will be important to minimise any adverse public reaction to implementation of the system. One possibility would be to use a staged approach for implementation, whereby only less sensitive data are held in the system initially with the facility to input additional data at a later stage when public acceptance may be forthcoming more readily. That is what the Government is trying to do. It is trying to impose this card on the Australian people. It is trying to tell them that it is being introduced for one reason, and one reason only. Yet the Department of Social Security has stated that less than 2 per cent of welfare fraud is due to false identity. Most fraud is due to overpayment and failure of recipients to admit changed circumstances. How will the Australia Card deal with cash transactions and barter systems? No identity card is useful in the detection of this sort of fraud because both the giver and recipient in barter situations are creating fraud. There is no way in the world that any national identification system can solve it. A national computerised register of births, deaths and marriages and the tightening up of the proof of identity requirements of social security clients can deliver what the Government is trying to achieve without requiring all Australians to be identified with a card. Even the Auditor-General has stated that $2 billion can be retrieved under existing procedures. Recent utterances by the Prime Minister (Mr Hawke) that the May economic statement will contain cuts in welfare spending have caused considerable alarm in the community, especially to the aged, the unemployed and Australian families. This Government's attack on the family has seen the average family become undeniably worse off. The once philosophical roots of Labor have been sacrificed on the altar of political expediency. Labor in its 1986 platform espoused: Income support programs for families with dependent children recognise society's shared responsibility for children and complement the care and resources which parents provide. This basic principle of Labor has been manifested in a perverse way by this Government. In March 1983 a family in receipt of average weekly earnings paid $65 a week in tax. It now pays $102 a week, despite the so-called tax measures that have been introduced by this Labor Government. It has conferred advantages on the higher income earner by way of a reduction of 5 per cent in the top marginal rate of tax, as well as the tax imputation system for dividends. Most average families that I see in my office do not play the stock market. We now see that the Government, to compensate for its poor management of the welfare sector-indeed, the economy as a whole-is again attacking the family and is contemplating means testing the family allowance. Former Senator Grimes stated the position rather forcibly to the National Economic Summit Conference in April 1983 when he argued that the family allowance had never been in any strict sense a welfare program. That is a position with which I agree. He said: Rather, they are designed to achieve a broad measure of equity on the tax transfer system between those with and those without children. They recognise that at any level of income, those with children have higher costs than those without. There has been, as I said before, a deterioration in the relative position of the single taxpayer family with children. There has also been a substantial sacrifice in horizontal equity with the elimination of concessional rebates closely allied with the actual expenditure patterns of families with children-for example, in education and for chemists, doctors and dentists. I recall that former Prime Minister Scullin was of the opinion that a system of equal payments without regard to income was the optimum course to follow, but then again it is a different Labor Party today from that of yesteryear. Even former Senator Jim McClelland intimated recently that this Government is barely recognisable as a Labor government. Mr Slipper —Diamond Jim. Mr CONQUEST —That is correct. Before I am accused of supporting the wealthy, I would like to acquaint members of the Government with a few facts relating to their support of speculative and unproductive wealth-creating schemes. Under the Hawke Government, a handful of speculators, of whom few have added to the nation's wealth, have been permitted to skim off billions of dollars in profits by playing the stock market with paper. That is legal but unacceptable at a time when families and pensioners are facing deprivation. This Labor Government has made this practice possible by permitting the internationally and financial institutions to provide virtually unlimited loan funds for takeover bids and also allowing speculators to deduct from assessable income interest payments on these multi-million-sometimes billion-dollar borrowing. This is unacceptable at the present time when families are facing such deprivation. The millions of dollars of taxes from which speculators were granted exemption by this Labor Government is revenue forgone. I say to the Minister that the millions of dollars that are being taken out of the Australian economy could better be utilised. It should be ensured that these schemes do not go on in perpetuity. The Prime Minister has announced welfare cuts. This has caused worry and anguish among pensioners and other welfare groups. Why should it not, because those people are facing problems. We have seen a deterioration in family incomes, as those opposite well know, since family benefits were brought in but not indexed. Those opposite know as well as I do that families with one child are about $27 worse off in real terms than when the scheme was introduced, because that benefit was not indexed. They know that a family with five children is some $93 worse off in real terms. They allow this situation which they should not have. Those opposite should not tell this House and the Australian people that the Australia Card-an identity card-will solve all the problems. It will not, and those opposite know it. The Department of Social Security has said that it will not, and the Australian people do not believe that it will. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. Ms MAYER(Chisholm)(3.33) —I am really intrigued by the contribution of the honourable member for Hinkler (Mr Conquest). I am not entirely sure where he stands on his Party's policies but I guess, since his Party's policies are not detectable, that that is understandable. I would like to talk about something else; and that is, the terms of this matter of public importance: The hardship caused to Australian families and aged pensioners through the Government's failure for 4 years to deal with massive social security fraud and overpayment. If we want to look at that in any kind of context we need to talk about the record of the Opposition because what people do, rather than what they say, is the appropriate measure by which to judge them. We can only speculate about what might happen in the future, but we can say what happened in the past and what is going on in the present. Very few people will be taken in and believe that so-called massive fraud and overpayment suddenly sprang into being four years ago, on 3 March 1983. In fact, because of the previous Government's policy and its administration, fraud and overpayment became an endemic part of the social security system. What were some of those policies that led to a situation that that Government was unable to deal with? First and foremost was the use of unemployment as an economic strategy to reduce inflation. That failed policy led to a 58 per cent increase in unemployment-187,000 lost jobs in the last year of the Fraser-Howard Government. This brutal strategy not only put 700 people a day out of work and reduced the living standards of 187,000 Australian families but also imposed unbearable strains on the underresourced and undertrained staff of the social security system. What was the response? Remember that we had the bedroom inspectors and the Greek conspiracy case? In the first instance, there was massive invasion of privacy and the assumption that pensioners and beneficiaries, particularly sole parent beneficiaries, were frauds and criminals, and the second instance was the most shameful episode in the history of social security. The infamous Greek conspiracy case was based on the word of an informant. On that informer's word people, because they were of Greek origin, had their entitlements denied with no preliminary examination of the legitimacy of those entitlements. The result was that all entitlements were returned as examination found that they were legitimate. A whole community was denigrated without subsequent apology and it cost the Commonwealth over $50m to carry out that nonsensical investigation and the subsequent failed court cases-so much for efficient administration. What can bring about fraud and overpayment? The single very important factor in fraud is identity. If a person is able to establish more than one identity, that person is able to defraud the system. When a system is overstressed, as it was during the time of the previous Government because of its policies, the extensive checking of identity becomes a problem. Overpayments usually occur when the Department is unable, because of poor resources, to keep in sufficiently close contact with its clients. Prior to this Government's coming into power, the discovery of fraud and overpayment relied largely on informers. The Greek case shows just how reliable that can be. In any case, I reject a system which encourages neighbour to spy on neighbour. What kind of society is that to encourage? One sensible thing done by the previous Government in this respect was to begin the replacement of an antiquated computer system with a much better and more powerful one, the implementation of which this Government has overseen and assisted with. This Government has gone much further. It has established tighter identification procedures, which are working, though they are still time consuming and would better be dealt with by having the Australia Card. The Assistant Secretary, Benefits Control, has said that `anything at all which improves the ability of people to identify themselves and removes some of the difficulties which we and other agencies presently encounter is a good step'. So let us have that good step. It would certainly help to take a great deal of work out of the department and off the shoulders of its personnel, allowing them to get on with other essential things. Opposition cries of massive fraud, at the same time as it is fulminating against a simple and effective method of ensuring that fraud is kept to an absolute minimum, really smack of hypocrisy. We have improved to an enormous degree contact with pensioners and beneficiaries through more frequent and simplified procedures. We have improved information to clarify and make understandable just what people are and are not entitled to. We have changed the system of providing cheques to the direct credit system, which had been recommended for some time by, among others, the Australian Federal Police but which was not taken up by the previous Government. That change alone has led to a 72 per cent reduction in cheque fraud-a worthwhile step taken by us, not our predecessors, who in opposition today prefer to wring their hands and cry crocodile tears about something they did nothing to prevent. This year, the Department of Social Security office in my electorate was the first regional office to have a selective review team operating. This team has proceeded in a way that is very different from the bedroom inspectors of the past. They have done their work sensitively and efficiently on the assumption that the vast majority of pensioners and beneficiaries are honest people battling along on small incomes. They did not work on the primary assumption that social security clients were dishonest cheats. However, those interviews, the personal lodgment of claim forms, the necessity for unemployment beneficiaries to maintain continuous registration with the Commonwealth Employment Service and the extra entitlement checks have proved extremely effective in preventing pensions and benefits from being paid to those who are not entitled to them and, it needs to be noted, in providing benefits to those who were entitled but unaware of that entitlement. It is extremely important for the Opposition to understand that that, too, happened. To the end of March the 7,340 targeted interviews by the review teams resulted in 1,824 pensions or benefits being cancelled, 179 being reduced and 363 being increased. Therefore the review teams were not there as slashers but to ensure that people had their appropriate entitlements. In my electorate 780 pensioners and beneficiaries had their entitlements reviewed and 225 reductions and cancellations took place. I do not have the figures for the number that were increased. After all, it is surely important in preventing hardship that entitled people receive their full entitlement, although this is not apparently the concern of the Opposition. Also in my electorate the Department of Social Security regional office has placed one of its officers with the CES, which is happy to co-operate in identifying and assisting the long term unemployed and others to return to the work force. Perhaps the honourable member for Richmond is unaware of the improved productivity, training and systems within the Department and is working on the information relating to past practices and resources. That would most certainly lead him astray. Given that the hardship referred to in this matter of public importance debate is predicated on the notion that fraud and overpayments deprive pensioners and beneficiaries, let us have a look at the situation. It is useful to understand that an increase of a dollar a week in pensions and benefits would cost $200m. Even if the honourable member's totally unsubstantiated guess of $350m were anywhere near the truth, which it is not, we are talking about $1.50 to $1.75 a week for each pensioner and beneficiary. Looking at the facts which are substantiated, such as the $136m which has been recovered, we are talking about a hardship of about 90c a week. If the honourable member intends to go on about hardship he should understand that that hardship resides in more than just an unsubstantiated guess at the amounts which fraud and overpayment cost. He should start looking at the realities of hardship in families. Those realities rest on such things as unemployment, lack of housing, poor education and poor health services, all of which were the responsibility of the Opposition when it was in government. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The time for the debate has expired. Mr RUDDOCK(Dundas) —On behalf of the Joint Committee of Public Accounts, I present the 272nd report of the Committee on the administration of the Commonwealth's property functions. Ordered that the report be printed. Mr RUDDOCK —by leave-The Public Accounts Committee decided to undertake a wide-ranging inquiry into the administration of Commonwealth property in 1984 after consideration of a report of the Auditor-General. At that time the audit report was the latest in a succession of reports which indicated that there were continuing problems with the Commonwealth's property administration. This was despite the creation of the Property Directorate in 1980 within the Department of Local Government and Administrative Services. Subsequent to the commencement of the Committee's inquiry an interdepartmental review of the property functions was announced by the Government in July 1986. The review, chaired by the Public Service Board, was to report earlier this year. The Committee has programmed its activities to ensure that its recommendations are available in a timely fashion to the Government in its consideration of the Public Service Board's more detailed review, and hopefully the recommendations of the Public Accounts Committee will be able to be taken into account in setting the framework for the more detailed recommendations that the Public Service Board will no doubt come up with. The aims of this inquiry were to find out whether there were major fundamental problems in the delivery of the Commonwealth's property functions, to identify their causes and to determine the reasons for their persistence. A final aim was to assess whether there were workable alternative administrative structures which, if implemented, could lead to demonstrable improvements. The current inquiry was therefore necessarily broad in scope and focused on aspects of the domestic property function. The Committee received over 60 submissions from 45 organisations, representing Commonwealth agencies, unions and non-government organisations, including some with large property portfolios. Eight public hearings were held and the Committee visited Perth, Sydney and Canberra locations for inspections. The large number of organisations participating in the inquiry and the level of their representation at the Committee's hearings suggested that there were widespread concerns about the delivery of the Commonwealth's property functions. The overwhelming theme of the evidence received was that the existing administrative arrangements were cumbersome, slow and inflexible and that major changes were necessary. In general, the Committee concluded that the central problem with property administration appeared to be the complex and cumbersome procedures which had evolved as a result of the involvement of too many disparate organisations with overlapping areas of responsibility. This served to perpetuate and exacerbate the delays in the delivery of property services. Further problems have arisen, both from the difficulties inherent in the budget process and from a lack of planning on the part of client departments. The Committee is of the view that overall strategic control by a central co-ordinating body is still necessary for the efficient functioning of property administration. However, allied to the retention of the central body is the streamlining of procedures, the precise determination of areas of responsibility and the devolution of financial responsibility and many of the more routine functions to clients. The Committee feels that the central co-ordinating role currently performed by DOLGAS should continue to be the responsibility of that portfolio, with a Central Property Agency performing such a role where property matters are concerned. The Committee has therefore recommended that a Central Property Agency be the central body responsible for the administration of the Commonwealth's property functions, with overall policy control. The Central Property Agency is to be established as an independent, ministerially accountable agency with responsibility for the management of the Commonwealth owned estate. The Central Property Agency would retain strategic control for the following purposes: To advise on strategic planning; to protect the national interest, particularly in the case of disposals; to prevent gazumping; to develop and implement strategies on the location of Commonwealth Government employment, particularly in the major cities; and to ensure a co-operative relationship with other levels of government. The Central Property Agency would have responsibility for the following strategic functions: The provision of policy advice to the Minister; the management of owned property; compulsory acquisitions under the Lands Acquisition Act; the forecasting of future property requirements; the rationalisation of the Commonwealth's property portfolio; the setting of accommodation guidelines; and the collection of aggregate information, providing a central point for information on the Commonwealth's property holdings. As a complement to the Central Property Agency, the Committee feels that there is a case for the devolution of certain routine functions to clients. The Committee further proposes that full financial responsibility including budget sponsorship for property programs be devolved to clients. Because the costs of accommodation and associated property services for each agency form part of the overheads associated with program delivery, decisions on resource allocation at the department or authority level are best decided in the context of the department or authority's own budget-that is, the department or authority whose property needs are being considered. As part of the rationalisation of responsibilities, the Committee has further recommended that all construction and fit-out activity above the tender threshold be the sole responsibility of the Department of Housing and Construction. The Committee's other major recommendations include: Responsibility for routine servicing functions to be devolved to departments and authorities; the option of using outside expertise for such services; the establishment of a Property Advisory Board; the institution of trust account funding arrangements; the development by the Central Property Agency of an efficient management information system and performance indicators; the implementation of a career structure for property specialists within the Australian Public Service; the creation of a separate item within departmental and non-trading statutory authority appropriations to provide for excess maintenance and restoration costs associated with Commonwealth properties listed on the register of the National Estate; the delegation of the Minister's powers under the Lands Acquisition Act to off-budget statutory authorities, with the proviso that there be mandatory compliance by such authorities with ministerial directions in order to give effect to the strategic controls and functions of the Central Property Agency; and, finally, the approval by the Central Property Agency of disposals on behalf of these off-budget authorities. I commend this report to honourable members. On behalf of the Committee, I would like to say that, whilst it is usual to thank members of the secretariat who helped and assisted in relation to a report, on this occasion I think it would be perhaps more meaningful to say that this report was a particularly onerous and difficult one that took a very large amount of time. A good deal of discussion amongst the members involved was needed, and it meant not only the usual drafting and redrafting of various sections of the report but at one point the whole report was taken away and substantially redrafted again. On behalf of the members of the sub-committee who were involved, I want to thank the members of the secretariat, both those who were with us prior to the finalisation of the report and those who have concluded this document, for their work which, I think, was very much beyond that which is normally called upon. Mr PRICE(Chifley) —by leave-I agree with the remarks made by my colleague the honourable member for Dundas (Mr Ruddock) that this has been a particularly difficult report. Indeed, quite a number of inquiries into this aspect of the Commonwealth's activities have been undertaken. I assure the House that in making its recommendations the Committee was very mindful of being pragmatic, constructive, and at least giving the Government the opportunity to make advances should it decide to adopt the key elements of the report. The honourable member for Dundas has already referred to setting up the Central Property Agency. I want to make a few comments in connection with the Property Advisory Board and about some of the other recommendations. Firstly, I feel it is very important that, in looking at government undertakings, we ought not to try to approach them from philosophical points of view but rather from the aspect of what is really needed. Given the evidence presented to the Committee, and notwithstanding the competence and dedication of the officers concerned, it is quite clear that much had to be done in terms of getting a degree of outside expertise into the organisation and we have recommended that that be undertaken by way of a Property Advisory Board. I point out to the House in particular that a sunset clause has been included. One can always recommend a Property Advisory Board, for example, but if the Board does not function or the Minister does not see value in the Board or the permanent head tends to white ant it, there is little point in creating such a Board in perpetuity. So, quite rightly, the Committee has recommended that a further report be made should the term of the Board need to be extended. I refer specifically to another principle on which I would like to dwell and which applies throughout the report, namely, that if departments or agencies are to be held accountable it is essential that they be given responsibility for the tasks that they undertake. That is being done in a number of ways-by removing overlap of responsibilities, by allowing flexibility to get advice in-house, or from outside, whether in relation to valuation or legal opinions. I commend those aspects of the report to the House. I am pleased to say that the Committee has recommended that the statutory authorities, Australia Post, Telecom and the Overseas Telecommunications Commission, should be given immediate exemption from the Minister's delegation under the Land Acquisitions Act. I am sure that that would provide those authorities with a greater scope to undertake their important functions, which are commercial functions but nevertheless also in the national interest. That is why a safety net has been provided, namely, that they must respond to ministerial direction. I suggest to those organisations that, should the Government accept the recommendations of the Committee, they provide in their annual reports full information about all their property undertakings. There is nothing in this report to suggest that they do not need to retain a sense of social responsibility in their undertakings, particularly in respect of property matters. I certainly commend the report to the House. I am looking forward to the Government's response. I want to thank those staff who contributed so much, particularly in the difficult later stages, to the finalisation of the report. Mr TICKNER(Hughes) —by leave-I believe that my colleagues the honourable member for Chifley (Mr Price) and the honourable member for Dundas (Mr Ruddock) have dealt with the majority of the contents of the report. However, I would like to highlight a few matters. I believe that, overall, the report proposes a number of significant changes to the management of the Commonwealth's property holdings. Of course, by way of comparison with any private holdings those property holdings are quite massive and involve very substantial amounts of money. Central, I believe, to the recommendations of the Committee is that the Central Property Agency within the Department of Local Government and Administrative Services would retain its strategic control for the purposes set out in our report, with that Agency to have continuing strategic functions. While the Committee welcomes the expertise that the private sector can provide through the Property Advisory Board and the career structure that we hope will be brought about within that Central Property Agency, and despite our support also for delegation to various authorities and departments, we believe that we must never allow the public interest to be neglected. We see the Central Property Agency as being absolutely fundamental for protecting that public interest through the mechanism of ministerial directions and the strategic control mechanisms, which were outlined in the course of the report. One item that calls for further brief comment concerns the proposed trust account funding arrangements. We believe that there is a need for some entrepreneurial initiatives on the part of the Central Property Agency and some degree of financial independence to allow those entrepreneurial skills to be brought to bear in the public interest. A minor matter, but one which I believe is worthy of comment, concerns recommendation No. 20, requiring all Commonwealth departments and statutory authorities and undertakings to conduct annual reviews of their property holdings, to maintain current assets registers, and to have them publicly available. Furthermore, that after conducting the annual reviews they be required to advise the Central Property Agency of the result of those reviews for strategic purposes. We do not believe that departments and statutory authorities should be in the business of empire building and of sitting on vast resources of Commonwealth real estate. We believe that the public has a role to play, as policemen of those authorities, and we seek full and frank disclosure as well as prompt and detailed reviews of holdings of real estate by those authorities. In conclusion, I would like to echo the comments made by my colleagues, and I commend the staff for their efforts. May I also commend my colleagues for their diligence and perseverence in pursuing this report to its conclusion. It has probably involved, I think they would agree, more work on the part of Committee members than has been the case with many of the other reports of the Public Accounts Committee. I commend the report to the House. Debate resumed from 1 May, on motion by Mr Peter Morris: That the Bill be now read a second time. Mr O'NEIL(Grey)(3.59) —Before the debate on the Ships (Capital Grants) Bill 1987 was adjourned on Friday, I was discussing the superb role of the seagoing union officials and the dedication and perseverance of those officials in constructive negotiations on this Bill. The unions recognise that the future viability of the Australian merchant fleet and the continued employment of their members are dependent on the industry being efficient and competitive in a very difficult international market-place. Accordingly, they have shown a keen willingness to initiate and implement changes to traditional shipboard operations and practices. Issues which are currently being considered by the Maritime Industry Development Committee and which have strong support from union leaders include developing a teamwork approach to shipboard operations through the use of well trained and multi-skilled-integrated-ratings and new training programs to equip seafarers with the higher level of skills required. High priority is being given to the retraining of existing seafarers, particularly existing ratings, engineers, electricians and radio officers, to ensure that they are given the opportunity of remaining in the industry. Indeed, the first MIDC ships will need to be crewed by retrained seafarers because of the lead time required to train new entrants. It will also have strong support from union leaders because of the breaking down of entrenched social barriers and class divisions-for example, by provision of common catering facilities for officers and ratings-and a development of an industry-wide manpower plan incorporating the recruitment of new entrants and training and retraining requirements for all categories of seafarers. The ultimate aim is to achieve a more highly trained and efficient work force which will provide seafarers with a greater level of job satisfaction and better career opportunities. This forward-thinking approach by the union leaders should guarantee continuing employment opportunities in the industry for existing seafarers, by opening the way for expansion of the Australian merchant fleet. Much of this, though, is unheralded-and there is more. As well as accepting lower crewing levels, the unions-the Seamens Union of Australia, along with the other unions-have also agreed to restructure completely society on board ship, to reduce the number of unions from five to two and to adopt modern shipboard management practices. The old hard lines of demarcation will be done away with, and recruitment and training, hopefully, will be common to all new entrants. The Government has agreed that, given this sort of commitment, a financial incentive will be given to new or secondhand vessels which comply with new guidelines reflecting these changes. It is now honouring that commitment. Local SUA delegates in my electorate-Les Richardson at Whyalla and Andy Thomas at Port Pirie-have been extremely co-operative and helpful in giving me sound advice on the merits of this legislation, and I acknowledge that. It would be remiss of me not to say a few words about the Australian National Maritime Association, ANMA. It was formed in August-September 1986 as the peak council representing and promoting the Australian shipping industry. All major Australian ship operators are represented. The ANMA is chaired by Bill Bolitho, who is also Chairman of the Australian National Line. His services to the Australian shipping industry were recognised earlier this year in the Australia Day honours list when he was appointed a member of the Order of Australia, a well deserved honour for a man strongly committed to the Australian shipping industry. Indeed, he is a great Australian. The formation of the ANMA represents the coming of age of Australian shipping. The organisation gives the industry a single voice in consultations with exporters and importers, unions, other organisations and government. It is an organisation for Australian ship operators to work together to improve the efficiency and productivity of the industry. I commend the Bill to the House. I also commend the Minister for Transport (Mr Peter Morris). He has worked extremely hard on this important initiative, over the last four years in particular. Indeed, it is a pleasure for me to be a member of the Government's Caucus committee on transport, with such a responsible, dedicated Minister at the helm. I hope that in time the initiatives taken by the Minister in this Bill become known as the Morris shipping policy, because that is what it is. Mr SMITH(Bass)(4.05) —The honourable member for Grey (Mr O'Neil) will get on. Mr O'Neil —I take a point of order. They were sincere remarks from the heart, and they were not flippant comments. Mr DEPUTY SPEAKER(Mr Mildren) —Order! There is no point of order. Mr SMITH —I am sure they were sincere. We will wait to see whether it will be known as the Morris package. As the honourable member for Murray (Mr Lloyd) said in outlining the views of this side of the House, we certainly support the Ships (Capital Grants) Bill 1987 as it takes a further step along the path that was started by what is known as the Crawford inquiry, the Committee on Revitalisation of Australian Shipping. The thrust of the legislation is deserving of support, and that is why we are supporting it. We look forward to seeing it go through this House and the other place. That does not mean that there might not be areas for improvement-I think there are. I shall make some suggestions to the Minister for Transport (Mr Peter Morris) in my remarks. The Ships (Capital Grants) Bill 1987 provides for a 7 per cent taxable grant to shipowners to encourage them to upgrade their fleets with modern and efficient ships, which honourable members from both sides of this House would want. The grant will be dependent upon ships being crewed by 23 or fewer in the case of tankers in the Australian coastal trade and 21 or fewer for tankers trading internationally and ships other than tankers trading in Australian coastal waters. The reasons for the difference are admirably outlined in the speech of the honourable member for Murray so I will not go into them. There is obviously some room for changes. To be eligible for the grant a shipowner must acquire a new or near-new secondhand ship, and that ship must be crewed by Australians. If the newly acquired ship is secondhand, it must not have been previously registered in Australia and must be no more than five years old at the time of purchase by the Australian shipowner. This is an important new provision in that, there being a world oversupply of tonnage, it enables potential shipowners to tap into that resource of cheaper but good shipping tonnage that is now available. As I said, if a ship is secondhand it must not have previously been registered in Australia. In addition, if an existing Australian ship were to be significantly upgraded-for example, re-engined and upgraded in other areas-and to meet the new crew levels, it would also qualify for the 7 per cent grant for the costs of the qualifying modifications. That, too, is a useful innovation. Grants under this legislation are subject to a sunset clause. That is particularly important. To be eligible for a grant a new ship must be delivered and registered in Australia between 1 July 1987 and 30 June 1992. Secondhand ships must be delivered and registered in Australia between 1 July 1987 and 30 June 1990. The inclusion of secondhand ships will be particularly attractive, as I have said, as there is a world surplus of ships, and those built in the last five years will be fuel and crew efficient. The important thing is being fuel efficient, as I will point out later. The typical cost structure for a bulk carrier is as follows: Capital, 47 per cent; fuel, 19 per cent; manning, 14 per cent; port charges, 8 per cent; repairs and maintenance, 3.5 per cent; and other costs, such as insurance, 8.5 per cent. Obviously the most expensive aspect of running a ship is capital, which at 47 per cent is nearly half the cost. A lightening of that burden will certainly promote activity in the industry. Manning is currently an average of 26 or thereabouts on large bulk carriers, and leave and other factors mean that it requires a multiplier of 2.25 to man a ship effectively. That means that in order to have 26 crew members on a ship one needs to employ in the vicinity of 58 or 59 seamen to run the ship 100 per cent of the time. Therein lies part of the problem that we in this country face with our manning levels in shipping. It is interesting to compare that with a Western European ship, for which the average is 18. In that case the multiplier for leave and other factors is 1.5. The total number employed is 27. Our major trading partners, therefore, are a long way ahead of us. In this Bill we are proposing to give a 7 per cent taxable grant for ships that have a manning level of 21. If we multiply it by 2.25, we still have to employ 46 people to maintain the manning levels. There is a vast disparity between the manning of 46, even under the new proposals with a requirement of 21, and the manning of a Western European ship-say, a Norwegian vessel-on which the manning level is 18. But the multiplying factor for that vessel due to leave entitlements and first class travel and so on-which Australian seamen enjoy-gives a figure of only 27. In the liner and general cargo trades, stevedoring is a major component. This cost can be as high as 25 per cent. So cost structures and capital costs are calculated on a current five-year depreciation rate with an assumption of a 10 per cent real rate of return being required for an investment to proceed. I mentioned fuel. Declining world fuel costs have not been reflected in Australia. Overseas prices for oil are $80 to $100 per tonne, but in Australia it is $120. Federal Government excises have risen from $23 to more than $40 per tonne. This enormous increase has negated declining world fuel prices. That is something that the Minister could also be working upon. If the Government were really serious about helping shipping in this country it could seek to lower the excise on fuel. By saying that I do not mean that the step taken with this legislation is not something that helps shipping; it certainly does. This Bill recognises the need for the replacement of ships if our shipping industry is to become more competitive and economically viable, and provides the opportunity for shippers to get into more fuel efficient shipping. As I mentioned, almost half of the operating cost of an Australian ship is capital depreciation. This is the major impediment to ship replacement, which in turn determines more efficient manning levels and fuel efficient engines. This was recognised way back in 1982 in the Crawford report, the major adopted recommendations of which were, firstly, the extension of the investment allowance to ships not trading on the Australian coast and, secondly, the allowance of tax depreciation at the rate of 20 per cent per annum on all eligible new Australian owned, manned and operated ships. The Crawford report envisaged a reduction in the high manning levels of Australian ships, from between 33 and 38 down to 26, and we are rapidly getting there now. Of course we now have the Government and the industry recognising the need to reduce these manning levels even further. Returning to the Crawford report and the subsequent implementation of its recommendation with regard to investment allowance, 12 ships were ordered prior to the termination of the investment allowance, which is about 10 per cent of the bulk carrier and 25 per cent of the tanker fleet. Generally these new ships are also larger and the improved crew efficiency is greater than that simply attributable to reduced manning levels. Several Crawford ships, as they have now been termed, are successfully competing within the international trade. The termination of the investment allowance ended the value of the Crawford package and only three special purpose ships have been ordered since 1 July 1985, but all with the new manning levels. The legislation being debated now follows the Maritime Industry Development Committee's overseas visit to study manning levels and general ship efficiency in comparable Western countries. The Committee, which was made up of shipping and union representatives, acknowledged the need for a further reduction as new ships in Europe generally have a crew of 16 to 18 and, more importantly, flexible manning arrangements which would allow further reductions and increase general shipboard skills. The MIDC recommended a three-year depreciation, including the first year ahead of commissioning, as was the Crawford arrangement. What we have is legislation establishing a 7 per cent taxable grant payable to shippers. It is not as attractive, perhaps, as the depreciation route, but it is, nevertheless, assistance all the same. The total cost of the whole package was estimated by the Minister in his second reading speech as being in the vicinity of $18m. That will be spread over a five-year period. To my mind, for what we are getting $18m is not terribly expensive, especially when one considers that 97 per cent of the exports, by way of volume, leaving Australia by ship travel on foreign ships. The cost to this country of those exports going out on foreign ships is estimated at $5.8 billion per annum, so $18m is a fairly small price to be paying for a greater chance of penetrating that market. Indeed, it is interesting to look at the latest Australia and New Zealand Banking Group Ltd Business Indicators. I quote from that publication which makes this very clear point: It appears that business lacks the necessary confidence in the economic outlook and economic policy-making to undertake substantial new capital expenditure. Another major factor inhibiting business investment remains the high level of domestic interest rates. That investment which has been undertaken has tended to be `at the margin' with little of the `greenfields' investment seen as critical for sustained economic expansion. Indeed, that is a worry; one which I am sure the Treasurer (Mr Keating) is facing. His high interest rate policy has brought that situation about. But relating that back to the shipping industry one can see that there has been a total drought of expenditure on new ships. This might be partly because of the high fuel costs, but there are other factors as well. It certainly is partly due to the cost of borrowing money. If one takes a closer look at the balance of payments figures in this particular bulletin, which looks at the costs to Australia of exports of goods and services-I emphasise the word `services' because freight is a service which is provided by foreign shipping to this country-one sees that the overall figure for the export of goods and services is expected to move from $37.3m in 1985 to a 1988 figure of $47.2m. So the cost to Australia is going up all the time. Anything that we can do to enable us to carry our own goods overseas-taking into account that 97 per cent by volume of that carriage is in foreign ships-has to be of benefit in reducing what is an accelerating balance of payments figure. As we in this House all know, we must all do something to reduce that trend, because it is costing us more and more and more and more the value of those exports goes to meet the costs of the borrowing required to get those goods overseas. I turn to some of the broader aspects of shipping in this country. Indeed, I guess it is important that a member from Tasmania speak on these particular issues because Tasmania is a net exporter and has been since Federation. We feel the impact of shipping, not just coastal shipping-though we are certainly suffering at present-but also the vagaries of international shipping and the costs associated with it. On a tonne/kilometre basis, Australia is the world's fifth largest shipping nation. One would be entitled to expect that Australia would therefore be at the forefront of new generation shipping, both in skills and in vessels. Sadly this is simply not the case, with just one shining example of how Australian shipping can again become an international force. As honourable members will now be aware, the Australian Maritime College is situated within the city of Launceston, which of course is in my electorate of Bass. Back in October of last year, the MIDC report which I mentioned earlier, entitled `Moving ahead'-and a very good report it is-recommended that all new entrants into the shipping industry undergo a common training course at the AMC for 19 weeks and that the college also offer an intensive 10-week course for those already in the industry. I believe that to be an eminently sensible suggestion. Further expansion of the AMC is obviously one major way in which Australian shippers can become competitive again through improved ship designs and skill levels of those involved in the industry. Raising the education standards and skill levels of everyone in the maritime industry is an obvious key to improving the performance of the industry, but I make this point: It would seem that the academics, as it were, from the Maritime College-many of whom, of course, are former mariners themselves; men of experience-have been excluded to a degree from consultation both with the Minister's Department and, indeed, with the MIDC. In Japan, for example, the academics in the maritime institutions are all involved in providing input. On this very crucial point of training and raising skills, a suggestion that the MIDC has made is that more use could be made of the facilities of the Maritime College. If you will allow me to stray, Mr Deputy Speaker, I was pleased some time ago when the Minister for Defence (Mr Beazley) came into this House and said that the Department of Defence was going to start utilising the facilities of the Maritime College. So I think there is a broadening recognition of the benefits that that institution can bring to shipping of all forms, and I think that is something that the Minister should take up. It always amazes me that the Minister for Transport does not have more involvement with the Maritime College in a ministerial sense and that the responsibility rests with the Minister for Education (Senator Ryan). I would have thought that the Transport Ministry is far more pertinent to what is going on in that particular institution. Indeed, this particular Minister-and I give him credit-has shown a keen personal interest in that college and I hope that he will maintain that interest. The world-wide trend to smaller crews will, of course, need to be followed in Australia. The smaller crews have not been achieved overseas simply by reducing numbers. Instead, the skills of seafarers have been upgraded and crews have been organised to work more effectively as a unit. Indeed, multi-skilling on shipping is something that the MIDC addressed. It is something that we need. The arrangements for crews and onboard maintenance during ship voyages is also something that needs to be addressed. The general thrust of this legislation is to improve productivity by linking it to the major cost of shipping-that is, the capital depreciation. If we are to look at productivity perhaps we ought to be looking not only at a reduction in manning levels but also at the overall cost of employment. We ought to be looking far more closely at things such as the leave arrangements, the first class air travel that most seamen enjoy and, of course, shipboard maintenance. It is interesting that only this weekend I read that the new efficiency scrutiny unit of the Government has identified a $50m saving by a reduction in the air travel of bureaucrats. If it is good enough for the air travel of bureaucrats to come under scrutiny I think air travel and leave entitlement arrangements for seamen might also warrant some investigation. At the end of the day the Australian taxpayer and the Australian population in general will certainly benefit from a far more efficient shipping industry. With the breaking down of the social and industrial barriers between seafarers, further reductions in the number of maritime unions are anticipated-that cannot come too soon-allowing further changes in work practices and job structures to be addressed at the same time. There are many examples of the stupidity that takes place on the waterfront. Some people who talk about the waterfront get a little confused about where the real problems are. Many of the problems relate to the activities that take place in the shore-based unions, not always necessarily in the crew-based unions. The report of the industry task force on shore-based shipping costs-the Webber report-identified the real problems in this area. I am sure that the Minister will say that a lot of those problems cannot be addressed solely by the Federal Government because the States, through the port authorities, have jurisdictions in those areas. But that does not lessen the need for the Minister to be making noises and applying pressure, where pressure can be applied, for those shore-based unions to start showing far more responsibility. A ludicrous situation arose last week on Webb dock where ships to and from Tasmania have been tied up because a member of the Waterside Workers Federation of Australia refused to be searched by a Federal Customs officer. Mr Peter Morris —Painters and dockers. Mr SMITH —I thank the Minister. A member of the Federated Ship Painters and Dockers Union, a rather well known union for all sorts of reasons, said that he would not submit himself to a search. When he was told that he had to submit himself to a search he stripped himself there and then on the spot. That led to a strike and nearly saw Tasmania held to ransom again by the painters and dockers because the Australian National Line feared that it would not be able to load and offload cargoes. That sort of activity, the rorts that have gone on at the waterfront, simply have to stop. If we continue to allow these sorts of things to happen all of us in this place, irrespective of which side of the chamber we sit on, will be doing a deep disservice to the nation. It is about time that some of those unionists started to show a little bit of responsibility and realised the very important position they play in ensuring that goods move into and out of this country and from State to State more quickly. There are enormous problems on the waterfront and within the shipping industry and it really would be foolish to pretend otherwise. The fairly recent establishment of the Australian National Maritime Association gives some heart. For the first time, Australian shipping is finally getting its act together in forming this organisation. I was pleased to be present with the honourable member for Murray and the Minister when it was launched in Melbourne this year. I might say that the Minister spoke quite well at the launching. The Minister should not think that because I am giving him a few credits I agree with everything he says, but he did do quite a good job last year. The point that ANMA makes in its recent brochure is this: Australia as a nation can no longer afford to ignore the foreign exchange problems posed by the carriage of our external trade in foreign vessels. There is, however, more to be gained than an easing of the foreign exchange problem, important as this is. The development of an expanded, competitive Australian merchant shipping industry would provide the following benefits to Australia: a vital resource in times of national emergency; increased employment of Australians skilled in handling increasingly sophisticated technologies; extension of Australia's international marketing endeavours by promotion of this country wherever the flag is carried throughout the world. I applaud those sentiments. It is certainly a good sign to see the Australian shipping industry moving ahead. Having had some personal interest in shipping over many years through the activities of my family's company I certainly believe it is time that we saw some changes made. It gives me pleasure to support this Bill because I think it is a method by which we can see some greater efficiencies brought to bear in the shipping industry which would build on what Crawford did. I think all of us in this chamber and in this country ought to recognise the importance of shipping and what this Bill does. Mr DEPUTY SPEAKER(Mr Mildren) —Order! The honourable member's time has expired. Mr PRICE(Chifley)(5.25) —I am pleased to support the Minister for Transport (Mr Peter Morris) and the Ships (Capital Grants) Bill 1987. As has been pointed out by previous speakers, the Bill is based on recommendations of the Maritime Industry Development Committee-the MIDC-as set out in its report entitled `Moving Ahead'. The MIDC is a tripartite committee of Australian ship operators and seagoing unions chaired by an officer of the Federal Department of Transport. Basically, the package consists of shipboard productivity and capital assistance measures. I do not want to go over all that has been said by previous speakers, other than to acknowledge the powerful contribution made by my colleague the honourable member for Grey (Mr O'Neil), but I do want to dwell on some of the ironical aspects of this legislation and the speeches made by members of the Opposition. This Bill represents the input of a concerned Minister and the output of three groups of people: Firstly, the trade unions, secondly, the ship operators and owners and, thirdly, the Federal Government. I think it is fair to say that the shipping unions-there are currently five-have a very strong history of concern about their members' interests. Others might say that they have been very militant. The whole industry has a very bad history of industrial disputation. What is this Government doing and what is the Opposition supporting? The Opposition supports the process of the three groups getting together, looking at the industry's problems and coming up with a solution. I have not been in this place all that long but I find the Opposition's approach very ironic in the light of contributions such as the one we heard from the Deputy Leader of the Liberal Party (Mr N.A. Brown) when he was spokesman on industrial relations. Opposition members consistently say: `This is the wrong approach. You have to crash through. Unions are only greedy. They are keen only to promote their own self-interests. A mechanism such as this Bill will be totally useless'. We have had two speakers from the other side. First, the honourable member for Murray (Mr Lloyd), the then shadow Minister for Transport, speaking on behalf of the coalition, totally supported the process and suggested that we could go further. He commended the process on behalf of the coalition. We have now heard from the honourable member for Bass (Mr Smith). I happen to agree with him. I believe that if we want to tackle work practice problems, if we want to tackle industrial relations, and if we really want an industry to move together, an essential ingredient is to get all the players talking together. We can have the Dollar Sweets dispute and we can have the Mudginberri dispute, but in the longer term such disputes do not fix anything and often leave a legacy that is very difficult to repair. This process has been used by the Government consistently. It has been used, as has been acknowledged by the honourable member for Murray, in the steel plan, in the car plan and in the Government's other plans such that for heavy manufacturing, the communications plan, which has been released, and the information plan, shortly to be released. I am very pleased to see the Minister for Transport, who has a deep commitment to transport issues and to bringing all forms of Australian transport up to the 1980s with a sound future for the 1990s, sponsoring this Bill. I thought it was important that I should point out what I feel is an apparent irony in the Opposition's approach to this Bill. As I have said, in terms of rectifying productivity, and rectifying work practices that need to be changed, the Opposition is supporting the proposition that all parties should sit down together and thrash things out for their mutual benefit. I am pleased that Opposition members are seeking to avoid confrontation and crash-through approaches but, given their support for the Bill and for other plans, perhaps they should re-examine their whole industrial relations approach. They should be suggesting that at the enterprise level this can be done in other areas, though not perhaps in such large sectors. It is a process of consensus. It involves a recognition of the fact that people have concerns and fears that need to be met and that significant improvements can be made. As the honourable member for Murray pointed out, obviously the Government cannot get involved in each and every one of these areas but the process is valid. Not all industries will have the benefit of this financial contribution which the Minister for Transport is making in this instance over a five-year period in order to set up this scheme and to make it an attractive additional investment. Let us look at the advantages on the industrial relations side. This industry is beset by many problems, but there is an emphasis on multi-skilling. Multi-skilling will be a more and more important area in our economy. It will have to be addressed not only by the Opposition, the Government and the nation but also by the unions, and it is being addressed by them. This matter is being addressed by unions which many Australians would not think would be prepared to sit down and undertake this exercise, but it is happening. It involves a new training regime for new entrants. It also envisages a retraining scheme for existing workers to enable them to be skilled up to high technology, which will be a key feature of these new ships. Perhaps most importantly it will involve a new social environment on the ships. Often the social environment that exists in our factories and offices is most counterproductive to increased productivity and job satisfaction. In addition, there is the issue of how many unions are to be in the industry. Not so long ago there were seven unions in the industry. There are now five unions and if the industry's hopes are realised, following delicate negotiations and the encouragement that is being given to those unions by the Minister and the Government, the industry will be down to two unions. There is no more debilitating an industrial dispute than one that involves the question of which unions should cover what job. I congratulate the Minister on what the Bill seeks to achieve and this legislation should be supported in the wider sense. I know that my colleague the member for Charlton (Mr Robert Brown) intends to take part in this debate, but I want to make a few remarks on the balance of payments. It is important to understand that we can no longer rely on our traditional exports that have served Australia so well. Although many members, including myself, seek to suggest what further steps can be taken in manufacturing industry, it is true to say that the service industries are the most rapidly growing. Therefore, we cannot afford to neglect any opportunity to increase our exports. One of the great aspects of this Bill is that for a modest investment of $18m by the Commonwealth and a huge investment of goodwill by the unions and employers, it looks as though there will be a net saving of $40m to $50m a year. Some honourable members may say that that is not very much, but it will be the $10m, $40m and $50m in savings that we make in each and every sector, whether in industry or manufacturing, that will have the effect of hauling down our balance of payments. We cannot afford to waste any more opportunities. Unfortunately, we no longer have the opportunity for the wide-ranging entry into shipping that perhaps we had back in 1929 when the Commonwealth shipping service was sold off, but we do have marketing opportunities. We need to seize those opportunities, and I am pleased that this legislation will assist. It is interesting to note that Australia has some 260 million tonnes of trade worth $56 billion. We are fifth largest in world terms in that respect, but less than 5 per cent of our trade is carried by Australian flag carriers. We carried only some 10 million tonnes in 1985-86 which contributed some $900m out of a total of $6.7 billion worth. I am pleased that there are real prospects that this trend will continue. I have spoken about the industrial relations record and I want to put some figures before the House. Through this process, which the Opposition is endorsing, the Government has reduced the number of days lost in industrial disputes. In the period 1982-1986, which includes the last full year of the Opposition being in government, the number of stoppages has been reduced by some 50 per cent. In 1986 210 days were lost compared to 485 previously. That is commendable, although I do not think that we should be complacent. I understand that in regard to the new ships being pioneered by Broken Hill Proprietary Co. Ltd-not that I feel very comfortable giving BHP some raps-the company is doing good things in shipping transport. This year BHP has new vessels including the Iron Kembla, the Iron Newcastle and the Iron Pacific and the company is making a real contribution to our exports. I understand that it has won an exporters award for developing a trading route from Australia to Japan. I commend BHP for that effort. I hope that the investment opportunities presented by this Bill to Australian industry will be taken up. I feel confident that if they are taken up it will prove profitable to the companies concerned. Certainly it will help the Australian economy, and thereby the Australian people, in the area of our balance of payments and will provide job opportunities for those in the unions. I commend the Minister for bringing this legislation before the House. I am a little puzzled, as I have already said, by the attitude of the Opposition, nevertheless I commend Opposition members for their support of the Bill. Mr TUCKEY(O'Connor)(4.38) —The honourable member for Chifley (Mr Price) appeared somewhat surprised that the Opposition supports government legislation. Apparently he is falling foul of a popular perception in the community that the Opposition never supports government legislation. One can always thank the media for that, because unless we are in conflict they never bother to report these things. It is a point worth making to those who may one day read the Hansard record of this debate. I have a few comments to make on the Ships (Capital Grants) Bill, which the Opposition supports. I wish to draw to the attention of the Minister for Transport (Mr Peter Morris) and the Government a few facts regarding this process. First, I remind the House that this is a process of what I would term picking winners. The Government on this occasion has decided to give a 7 per cent taxable grant to the shipping industry in certain conditions relating to putting our shipping industry on a more competitive basis, namely getting crewing levels down by the use of technology, which is to be applauded. Once ships leave our shores, they are outside in the cruel world of international competition. There is no way out there that we can dictate the price of things and what people pay as we do in Australia. People will go to the lowest market and, in the case of international shipping, they invariably ignore Australia. This is not the only assistance the Government has given in recent times. Recently it gave 150 per cent tax deductibility for research and development-another admirable step. While it has done all this it has decided to dispose of a few winners. It banned negative gearing in the building industry. Negative gearing occurs when an investor pays more in interest than he receives in rent. That has been labelled by the Government as a wrong policy and it is not allowed any more. The Government has introduced a capital gains tax which applies particularly to the building industry, an area of responsibility I have just inherited, and is maintaining a high interest rate regime. While one section of the community is being assisted by this legislation, another is falling into disaster. The number of housing starts is dropping dramatically. We have now achieved a situation in which the number of new housing starts is down to 8.6 new houses per thousand head of population in Australia compared with the lowest ever of 8.8 new houses per thousand head of population under the Fraser Government. Of course, it has all happened because of government activity in taking away the attractions of investing in the housing industry, adding other taxes such as the capital gains tax and having a high interest rate regime. It is excellent to try to create more employment in the seafaring industry, the shipping industry. Nobody wants to criticise that but let me remind honourable members that some 500,000 people are employed in the housing industry and the products they provide are basic to our philosophy of the needs of our families. The level of expenditure in this industry is $20,000m annually. There is no way in the world that the Minister would be able to indicate to us that the shipping industry has the same short term potential. I do not want to be negative about this matter; I am just asking the Government: Why not practise in the housing industry what it preaches in the shipping industry? Why create negative mechanisms in one industry which has such massive levels of expenditure and employment while recognising the need in another industry for additional expenditure and for Australia to get a greater share of international competition? Just today the Master Builders Federation of Australia drew our attention to a survey it has just concluded which indicates a decline in employment in the respondent firms of 7.1 per cent in the March quarter of 1987, and a further 2.8 per cent reduction is expected in the June quarter. There have been significant declines in the employment of sub-contractors. Employment of bricklayers is down 18 per cent and carpenters 16 per cent, and is expected to contract further in the last half of the year. The survey goes on to indicate the States that have the greatest level of decline. Most importantly, the survey listed the major factors that influence work availability; some 49 per cent of respondents listed the high level of interest rates, 16 per cent of respondents listed lack of suitable finance, 10 per cent of respondents listed lack of suitably priced land and 7 per cent of respondents listed lack of public confidence in the Government. Honourable members can again see that the Government's policy is assisting one industry-the industry dealt with in this legislation-but at the same time it is causing another industry to fall. The car industry reports that it has had the worst sales in 20 years. One does not have to ring many people in the car industry to discover that it is again laying the blame on the fringe benefits tax-a government initiative-high interest rates-a government initiative-and, of course, the disastrous terms of trade, government debt and overseas debt that have caused a decline in the value of our dollar. I am saying that the Opposition supports any government initiative that improves the opportunity for people to gain employment in Australia and for Australia to get a bigger share of international markets. However, it does not want the Government picking winners; it wants the Government to have an even-handed, overall policy. I draw the Government's attention to the disastrous state of the building industry which purely and simply reflects its policies at present. I hope the Government will see the problems it is creating in that industry. I have remarked on other areas of the Ships (Capital Grants) Bill. The 7 per cent grants will be of some benefit but maybe those companies which are making profits in this area will be the least encouraged if the grants are to be taxed. Obviously those companies that are making the profits are probably the most efficient. I wonder a little about that. Crewing the ships with Australian residents seems to be fundamental to the requirement of getting a grant but it reduces the opportunity for us to be competitive. That is something about which the crews must think more. I am not suggesting that we replace them with foreign crews; I am just saying that our rules-- Mr Hollis —I was starting to worry there for a while. Mr TUCKEY —I am correcting that point. The point I am making is that our crews still have a long way to go to be competitive with crews of other countries and I refer not just to the wages they receive. We are well aware that we do not meet some of the conditions of some of the more highly paid crews in the world. One of the conditions of working on a ship in Australia is that a crew member is returned first class from the port where his tour of duty concludes. Quite frequently that gives me an opportunity to chat with a crew member from one of those boats. They happen to sit next to me. I find them very interesting people. Quite a few of them vote Liberal too, so the Government should not think they are all on its side. The reality is that some of them tend to have a couple of crayfishing boats stacked away here and there. They are doing pretty well, thank you very much. They have some interesting things to say. One day a chap quite angrily informed me that members of the Seamens Union of Australia do not carry out at sea the duties that are carried out by seamen from other countries. Our seamen will not do the same level of maintenance. It was his opinion that probably half, if not a third, of the time our ships spend in dry dock is because of lack of work done at sea which is traditionally done at sea by seamen of other countries. I hope that if this deal has the full support of the unions, those sorts of foolish tactics will be discontinued. It just adds to the cost and probably puts the ship into dry dock earlier than it otherwise need go there. That is not very sensible. We believe that a crewman on a ship can work only about six months of the year because immediately he goes to sea he is denied access to his family and those sorts of things. Consequently, I am wondering when we might see the size of this Parliament doubled so we have to do only six months each, considering the amount of time I spend away from my family. Obviously, things are a little different here-we keep fighting to get our jobs back. Surely there are other ways of looking at this matter. Maybe the only reason that two crews are needed for every Australian ship is that people are denied access to their families. Not only politicians living in the north west of Western Australia, as I did for many years, are denied access to their families. I have met shearers and other good Labor Government supporters who for lengthy periods of the year are also required to live away from their families. The younger ones woke up and overcame this problem by buying a caravan. Because their wives, and sometimes families, were young enough to be able to participate in their life, they travelled together from shed to shed. That was for their personal convenience but it was an excellent arrangement. They stayed in the bush on weekends and entertained themselves by fishing or doing something else with their families. Inevitably the single fellows went to town and the local hotelier-me-and the bookies shop next door got far too big a proportion of their wages. Why cannot our shipping industry look more and more-- Mr Hand —Did you ever give any back? Mr TUCKEY —If the honourable member would listen for a minute on this occasion he might get some advice that is of interest to all, particularly the people he claims to represent. If we can improve the efficiency of our shipping industry, it might be a huge opportunity for people to gain respectable employment. That is what I think the Government is trying to tell us. We are well and truly aware that only 5 per cent of our exports are carried in Australian shipping. We ought to be a great maritime nation, but we must be sensible about why we are not. The Government is addressing the problems of capital cost-and we congratulate it-but there is nothing wrong with the member for O'Connor telling it where some of the other problems lie and how the unions, in particular, might overcome them. The issue is: Why are we not thinking, and why are the unions not talking, about families going to sea? A ship is a very large object. The cabins should be designed so that people could spend the normal year at sea if their families were with them and their children were young enough. I recognise that when the kids have to go to high school, for example, the rules change. But if that is a way of keeping people at work and reducing the cost, it is worth considering. I am told that other nations do that sort of thing. Frequently there is a working arrangement under which both husband and wife have responsibilities on board. It was pointed out to me by this gentleman, a seafarer, that when that was tried on some of our ships, the stewards union demanded that it have more men on board because there were more people on board. That is silly. For a start, it should probably be the other way around. If the facilities were sensibly designed, there is every reason to believe that the families would eat in their own quarters and one member of the family would do the cooking. It is worth considering these things because they are still problems to be addressed. I wish we could look at these things in the interest of a better industry. I refer to another aspect of the shipping industry. I represent a rural electorate. My constituents have only one question about shipping. They want to know how cheap they can get it. They want to know what is the best available price, because they are the people who have to pay the rates. They are the shippers, if you like. They are still not happy with the involvement of Australian shipping on the Australian coast. They badly want competition in that area, particularly since the Australian coastal trade has extended to Christmas Island, and such places where superphosphate rock is mined. They want world competition. They are well aware that the rates of nearly $30 a tonne that they are obliged to pay on rock phosphate could be as low as $11 a tonne in a depressed world shipping market. There are other problems associated with our shipping industry that are affecting our opportunity to export in other areas. Mr Ralph Sarich, a well known inventor in Australia, was on a plane with me one night. He told me that his board had just concluded its investigation into whether to manufacture his revolutionary two-stroke motor-not his orbital motor-in Australia. When he and his board carried out that investigation they considered the whole manufacturing process, and believed they had a viable proposition. They got right through the whole process, until it came to the reliability of the Australian waterfront. The mere fact that they could not guarantee delivery of engines, and the consequential requirement to put large stocks of these motors in other countries so that they could meet the just-in-time assembly requirements of all production facilities today, meant that the interest cost on that money lying idle destroyed the project. On that day a decision had been taken to sell licences instead of manufacturing in Australia. That decision has since been published; I am not telling any secrets. Mr Sarich was heartbroken, because he is a real Australian. He wanted to spend that money and he was not able to do so. His company, his shareholders, are okay; they are getting the licence fees. But the jobs are going to Americans. That is a disaster. It is another aspect of the shipping industry. As many of the fellows for whom we are trying to get jobs at sea seek to be away from home and family less, they will seek jobs as tug operators, pilots and things of that nature. They must realise that every time they stop freight leaving Australia they are stopping other Australians' job opportunities. I wanted to make that point. I ask the Minister whether he will explain to us why the maximum crew for an overseas ship is 21 and for a coastal trade ship 23. It would seem that the reverse would be more likely. We can only wonder what effect the monopoly that Australian ships have on the coastal trade has on that. In other words, it appears their negotiating ability has been reduced. I refer to another aspect of the matter. The other day I raised in the Parliament the problems in my State for cray fishermen in getting adequate air space to export a very highly valued product overseas. I make this point again: We must always balance the value of the shipping industry or the airline industry against the value of the trade serviced. If we let, by way of legislation, one industry's interests outweigh the others, it is bad legislation. We would be better off with no ships at all. That would be a great pity because obviously we should have 50 times the ships that we have now. I give another example of a pipe manufacturing firm in my State that was operating three days a week about three or four years ago. The firm told me it had adequate contracts available through its Asian subsidiary companies, but the freight rates out of those Asian ports were so much more competitive than it could get from Australia that its more competitive factory in Australia could not compete in the Asian markets. It approached the shipping companies that were servicing it in Asia and said: `Look, if you will come to Australia at the same tonne per kilometre rates, we have a shipload of pipes for you'. Those companies said: `We do not go to Australia, friend. We would not be seen dead in Australia. We consider Australia a war zone'. The firm did not even want the companies to cut the rates on the longer journey. It was prepared to take those rates, as they would still have been competitive. It continued to operate three days a week when work was available for every day of the week. These are the sorts of questions we must address in this sort of legislation. Finally, I refer to another matter related to shipping which is of concern to me, because a new ship has just entered the trade. Some people in a company called Arka Export-Import Ltd in Melbourne have a small ship, and are breaking into the Vietnamese market, sailing into Haiphong harbour. Unfortunately, the other day they attracted some business from the Department of Foreign Affairs. Apparently they contracted, in rather general terms-I gather that the Department did not ask for a proper quote, which might have resolved the problems that I now raise-to take five containers into Haiphong harbour. They have now asked the Government to pay $130,000 in freight charges for those five containers. The Government is outraged and has offered them $35,000. Someone must be wrong. The wrongness is that the proper procedures were not followed by the Department of Foreign Affairs in the beginning to make sure that the whole contract was tied up before the goods were loaded. Those goods have nearly reached their destination. The shipowner has told me that it will cost him $90,000 to unload them in Haiphong harbour. Apparently, the Vietnamese see foreign shipping as a substantial source of foreign exchange. If one wants to have one's ship unloaded in Haiphong harbour by a container crane, it will cost an amount of that order. I cannot substantiate the figures, but the man has told me that he will have to outlay $90,000 to get the goods unloaded. On three occasions the Department of Foreign Affairs has sent him a cheque for $35,000 and has tried to bludgeon him into accepting it. It has taken court action against him. It has given him a hard time. That does not seem to me to be the way to treat a person entering the foreign shipping industry in Australia. Let us face it: I do not think he is seeking to profiteer. On the other hand, he has told me that the arrangements were not finalised, and that that is the account he is rendering. The Minister has already been given over a week to attend to this matter, so it is not as though I am trying to ambush the Department of Local Government and Administrative Services on this matter. I think the Minister is probably attempting to do something about it. But it is an indictment-- Mr DEPUTY SPEAKER(Mr Mildren) —Order! The honourable member's time has expired. Mr HOLLIS(Throsby)(4.58) —I welcome this important legislation. As has already been stated, the purpose of the Ships (Capital Grants) Bill 1987 is to give effect to the shipping industry development package announced by the Government on 22 December 1986. The package consists of shipboard productivity and capital assistance measures. The previous speaker, the honourable member for O'Connor (Mr Tuckey), found so little to criticise in this legislation that he had to make a very wide-ranging speech-as, indeed, I will. He went into details of the building industry and various other things. I am pleased that the honourable member has given his support for this important legislation. How could he do otherwise? This legislation will assist Australian ship operators to acquire modern, technologically advanced ships which can be operated effectively at the crewing levels specified in the Bill. The key aspect of the package is the introduction of new ship-board organisation and work practices to maximise the benefits of modern ship technology. One may well pose the question: What is the point of having modern ship technology unless we take advantage of it? That is one of the things that this Bill will do. The financial incentives provided in the Bill will assist Australian ship owners in the purchase of the modern, technologically advanced ships necessary to make the package work. This Government, under the Minister for Transport (Mr Peter Morris), has a firm commitment to the development and expansion of efficient, competitive and reliable Australian flag shipping. Coming as I do from the Illawarra region, I have a particular interest in this. My region exports coal and iron. Soon, a modern wheat terminal will be opened at Port Kembla, allowing the export of grain. Discussions are well advanced on the export of wool, live sheep and vegetables from Port Kembla. Mr Robert Brown —Yes. Mr HOLLIS —As the honourable member for Charlton says, yes indeed. It will be a great credit to this Government when that new facility is operating. I invite my friend the honourable member for Charlton to inspect the port of Kembla with me, either in its present state or when the new facilities are up and running. Mr Robert Brown —I would like to inspect it under both circumstances. Mr HOLLIS —The honourable member has a double invitation. I want to see Australian products and produce exported from Port Kembla carried in Australian ships wherever possible. There are opportunities for Australian shipping to compete internationally on its commercial merits despite the very difficult market situation that shipping faces generally. As previous speakers have said, less than 5 per cent of our trade is carried in Australian flag ships. This reliance on foreign shipping not only places a heavy burden on our balance of payments but also makes us hostage to foreign owners. For example, recently in an attempt to force Australian producers of steaming coal to lower their prices significantly, one of Japan's nine big electric power companies threatened to stop sending ships to Australia. We were held hostage. Foreign owned or controlled shipping could effectively halt Australian exports. Other speakers have gone through all the details of the Bill. I will not repeat all of them. Suffice it to say that under this legislation the Government will provide a taxable grant of 7 per cent on the purchase price of new or newly-acquired second-hand trading ships meeting the following eligibility criteria: They must be crewed in accordance with specified crewing benchmarks, registered in Australia and crewed with Australian residents. The newly-acquired second-hand tonnage ship must not have been registered previously in Australia and must not be more than five years old. In some circumstances a grant will also be available for the cost of converting an existing Australian ship to the Maritime Industry Development Committee's standards. The Bill specified maximum crew level benchmarks for eligibility for assistance. I notice that the honourable member for O'Connor touched on this. Benchmarks were established in consultation with the shipping industry to take into consideration the type of ship, the nature of operations and trading patterns. As the honourable member said, this is 21 crew for bulk carriers, container ships, roll-on, roll-off ships and tankers engaged in international trade and 23 crew for tankers engaged in coastal trade. Additional benchmarks can be created by regulation for vessels which do not fall into the specified categories. I have no great worry with what the honourable member for O'Connor said about allowing families on ships. As he said, this happens on many overseas ships. I think that there could be problems on some large tankers if sea-going people had large families and wanted to take them all on board. There may be a safety hazard with young children running around the decks of some of these huge container ships. I was a little worried when the honourable member talked about families eating in their cabins. If we are talking about a crew of 21, if there were 21 partners-one must not be sexist and say wives-and children all eating in their own cabins there would probably need to be an additional 21 kitchens. This could lead to additional costs, which the honourable member seems so keen to get away from. But I see nothing wrong with the idea of taking a partner on a ship, as happens in many overseas countries. Although it is very fashionable in this House to attack the unions, the industrial record of Australian seafarers in recent years has been good. In 1986, ship days lost through industrial action involving seafarers numbered less than half those lost in 1982. In 1986, 210 days were lost compared with 485 days lost in 1982. Across an Australian fleet of over 100 ships, the 1986 figure represents a time loss of less than 0.6 per cent. In 1983 the Government adopted the recommendations of a report by Sir John Crawford entitled `Revitalisation of Australian Shipping'. Under subsequent legislation, ship operators were offered tax incentives to purchase new ships linked to crew size reductions. This process improved industrial consultation. These consultative processes have been built on with the establishment of the maritime industry mission and the Maritime Industry Development Committee. The maritime industry mission, which comprised senior representatives of ship operators and leaders of sea-going unions, studied at first hand developments in a number of leading maritime countries; in particular, training and human resource development arrangements, ship-board operational procedures and personnel organisation. MIDC was subsequently established by the Minister for Transport to examine the mission's findings and develop appropriate measures for Australia. As industry practices continue to be improved through such consultative processes, rather than by confrontation, our shipping efficiency and competitiveness will continue to improve and our reputation for reliability will continue to be enhanced. This is crucial for the future growth of the Australian fleet. Our shipping companies have an excellent record of service to Australia's overseas customers. Over the last two years, no time has been lost through crew disputation by ships of the Broken Hill Proprietary Co. Ltd in its export trade. Similarly, Howard Smith Industries Pty Ltd has not lost any time in its coal trade with Japan. A spin-off of the Government's approach of co-operation and consultation has been moves to reduce the number of sea-going unions. If all the proposed amalgamation moves come to fruition there will be only two unions, compared with seven in 1980 and five presently. Exports are the life-blood of our economy. Australia's export performance must improve in all areas if we are to sustain our national standard of living in the face of the difficult trading environment. I want to pay a particular tribute to the Port Kembla harbour task force because, although we can improve shipping, unless the port structure is in order it will all be worthless. The Port Kembla harbour task force was formed in May 1981 to promote economic activity, diversification and development at Port Kembla as a focus for regional development. It is a non-political community organisation made up of a number of interested groups representing shipping agents and stevedoring, trade unions, local government, shippers and transport companies, commercial and industrial companies and citizen members and academics. The chairman of the task force is Alderman Peter Morton of the Wollongong City Council, who is well known to the Minister. The management committee members are Professor Ken Blakey, an economist; Captain Charles Rose, a shipping expert; Ted McAlear, the secretary of the combined port unions at Port Kembla; Warwick Reader, an executive officer employed by Wollongong City Council; Tas Kollaras, a business representative; Frank Jackson and Rod Paterson of the maritime unions; Bruce Noble, a farmer; Gus Keeson and Kevin Wingate from the shipping and stevedoring area; and Tom McCabe from the transport area. During the last six years the Port Kembla harbour task force has undertaken research and promotion work on a series of projects for cargo development with a system of port-based transport and communications. In this area of development, it has established a body of knowledge about project identification and preparation and the application of systems analysis. The proposed grain handling project has been at the centre of the study and the task force was responsible for convincing the Government and farmers to build it at Port Kembla. I like to think that I had a little bit to do with that persuasion as well. The task force is now working on a number of new projects relating to rural exports. These include the export of greasy and processed wool; fresh fruit and vegetables to Hong Kong and other Asian countries; live sheep and cattle; and frozen and chilled meat. Four members of the Port Kembla Harbour Task Force have recently returned from a business development trip to Singapore, Taiwan, Japan and Hong Kong, where a number of valuable contacts were made with companies wishing to purchase these products through Port Kembla. I might point out that these people made the trip at their own expense. With the co-operation of the Federal and State governments the task force believes that there is in excess of $150m worth of new trade that could be exported from the country areas via Port Kembla. I emphasise that I am talking about new trade here, not existing trade. Another important initiative of the Port Kembla harbour task force has been directed towards the improvement of industrial relations. The task force has instigated important moves to bring together those involved in the rural production areas and those involved with the movement, handling and export of these goods, with particular emphasis on the maritime unions. A number of seminars have been held in Port Kembla and the central-west of New South Wales, the latest being at the Orange Agricultural College a couple of weeks ago which had the theme of `Consultation, not Confrontation'. I was privileged to attend this seminar, as indeed did the honourable member for Calare (Mr Simmons), Senator West and Senator Brownhill. I believe that what has been achieved by the Port Kembla task force should be an inspiration to all involved in shipping, exports and industrial relations. I hope that during the forthcoming break the Minister for Transport will accept my invitation to visit me at Port Kembla so that he can see for himself some of the important work that has been going on there. For too long we have regarded shipping solely as a service to trade. Indeed, we have often preferred to abuse shipping-especially Australian shipping-as a scapegoat for all sorts of shortcomings in our trade and marketing arrangements. After we have mined, grown or manufactured our exports and organised their sale, we have found it too easy to leave it to others to manage and profit from our export shipping. As a result we have turned our backs on an enormous deficit in trade in services by allowing foreign shipowners to carry our trade. I suggest that there has been a failure to look objectively at shipping, its real weaknesses and its strengths. We need to look at the facts. We must treat Australian shipping both as a service to trade and as an export trade in itself and we must put the necessary effort into its improvement and promotion. Commodity exports such as coal will always be important, especially to the honourable member for Charlton (Mr Robert Brown) and me. We must continue to ensure that such exports are shipped competitively and reliably. But this is not enough. We must increasingly seize every opportunity to expand our trade in other sectors, particularly services. As the initiatives in this legislation come together, more Australian exporters will be able to choose to use efficient Australian ships at competitive freight rates. Australia's economic and trade performance need the benefits of greater exporter control of shipping and greater national participation in shipping as part of an integrated Australian marketing and supply chain. Yet, there are those who question our ability to become competitive. They point to the artificially low costs available to some foreign shipping. They are the knockers-the voices of defeat and surrender to foreign interests. One half of our exports are still carried in ships of other higher-cost countries, such as Japan, Britain, West Germany and Scandanavia. While we may not now be the lowest cost shipping operator in the world, we can and we must compete with these countries. I commend the Bill to the House. Mr CADMAN(Mitchell)(5.16) —One has only to examine the Australian shipping industry to find a micro example of some of the problems of Australian industry. We are fortunate in the shipping industry to be able to compare fairly exactly the costs and other practices that apply to the Australian industry and see how we measure up against the other nations, how effective we are in managing our resources, whether they be human or capital, and whether we are competitive on the world scene. This is one of the few industries in which one can make those comparisons and it is interesting to do so. The Australian shipping industry can be measured on the levels of employment, its competitiveness and the productivity levels within it. It makes a fascinating study because Australia depends, as the House and the community know, on our ability to ship goods overseas to pay our way in the world. The more effectively we do that, and the more Australian shipping we use in that process, the better off the nation will be. The tragedy is that we do not do it particularly well and we have been failing in this area for a long time, just as we have been failing with general competitive levels in a lot of our products. However, the maritime industry alone cannot be blamed for the difficulties experienced in exporting goods. The infrastructure factors, as well as the links in the chain of exports from farm or factory to ship-side, are significant factors in our lack of competitiveness in the transport system. The Ships (Capital Grants) Bill is interesting because it is the Government's response to a series of reports. The Government has settled for an interesting approach in tackling some of the problems of the shipping industry. The Minister for Transport (Mr Peter Morris) presents it as a package. I do not believe that it is a complete package; it is a partial attempt at resolving the problems. If one looks at the Government's approach one sees that the Government has decided that on the payment of capital grants to ship buyers, whether these be for new or second-hand vessels, there will be manning compensations or concessions from the unions within the shipping industry. This Bill provides a 7 per cent taxable grant to shipowners. The grant of 7 per cent is on the purchase price, whether it is for a new ship or whether it becomes an Australian trading ship, the purpose of which cannot be altered within five years and which previously was not registered in this country. This capital grant also applies for the conversion of ships-that is, extensive modification to ships-and bringing them onto the Australian trading system. Grants are not payable unless the owner intends to use the ship for at least five years so there is not a quick exchange process in which the benefit would be lost to the Australian taxpayer and the community. The ship must be crewed by Australian residents otherwise the capital grant is not payable. There are also limitations on the maximum crewing levels before a shipowner can achieve this capital grant. Grants of course are payable on ships constructed outside Australia and unfortunately I think that many of the grants will subsidise the purchase of foreign vessels or vessels which are built elsewhere than in Australia. The Bill sets out a maximum crew size of 21 for tankers on foreign voyages or 23 for tankers on domestic voyages. The Bill also has a sunset clause. That is an interesting approach and I commend the Government for its decision to take up the sunset provisions in a lot of its legislation. When one looks at the statements by the Australian National Maritime Association, which brings shipowners and operators together under the one banner, one begins to realise the seriousness with which those people view the shipping industry. For instance, they talk about Australia being able to ship only 3 per cent by volume of its total products. I have tried to establish a dollar value for the various components of the shipping industry but I have not been able to do so. I believe that Australian ships would tend to carry some of the higher value cargoes and therefore the volume measurement may not be a completely appropriate way of measuring them. Being unable to get a dollar value on the cargo carried by Australian ships, I guess I must settle for the 97 per cent which is carried by overseas vessels. The Australian National Maritime Association gives a lot of attention to the loss in invisibles paid overseas and we become increasingly dependent, so it says, on others for the provision of shipping and therefore our total outgoings tend to increase. Invisibles for the service area come to quite a large amount, as does the total invisibles bill. I now turn to the Crawford report. In Sir John Crawford's fine report, which in fact was commissioned by the previous Minister for Transport, the honourable member for Gwydir (Mr Hunt), he deals with the invisibles picture. Having Australia carry its own goods in its own vessels is not quite as beneficial as some interested groups would present. In fact at page 7, in his summary, Sir John Crawford states: The balance of payments, the freight on imports and the process of carrying Australian goods in foreign vessels is not as full a picture as we would like to have. This is not the full picture as Australian ships spend substantial sums overseas for fuel, stores and cargo handling, just as foreign ships spend considerable sums here. This is a difficult subject to quantify, but I am satisfied that there is a gain, provided the ship operates profitably. Nevertheless, the overall net gain may not be of the major importance often ascribed to it in the most partisan statements on the subject. The invisibles argument has been used very strongly in the House today. I think that qualification needs to be made, although I still acknowledge that it is a significant factor. Sir John Crawford chose to use that as the first economic point in favour of giving more attention to the Australian shipping industry. He dealt with the profitability process. That is another interesting factor too, as, strangely enough, shipowners do look at profitability, and one has to look for hidden subsidies. Often one finds that political events that are taking place give a false picture. I refer to some figures that came to me in 1983. Polish Ocean Lines was trading into Australia at that time and offering some extraordinary prices to ship Australian goods overseas. For instance, for fresh hides POL offered the price of $1,600 per container, while the shipping lines offered $3,000 per container. For fresh fruit, prices were $3,600 per container for POL, and $4,500 per container was the best price that the liner trade could offer. One would say that a subsidy was provided from the foreign government involved, that the Polish Government wished to extend its foreign influence and trade opportunities and so falsely subsidised the capital process and cost of running its vessels. Therefore, the profitability aspects must be given careful attention. I also draw to the attention of the House the employment factors mentioned by Sir John Crawford. They have been adverted to today and I think they are very significant. Reference was made to opportunities for highly skilled Australians willing to apply themselves to the maritime industry. It is a good industry if it works well, and Crawford supports that view strongly. The efficiency factors of the Australian industry were dealt with at some length. Sir John was really concerned about the efficiency of Australian shipping, both coastal and overseas operations. He was not critical of the manpower but of some of the processes and practices that we have adopted over a long period. That is what is wrong with Australia generally today. We have fallen into easy times and have felt as a nation that we can take any measure whatsoever without considering the national interest. However, the days are with us when we must consider the national interest. Crawford rightly points to those factors in his very fine report. The Crawford report is one of many reports produced over the last 10 years that have dealt with the Australian shipping industry and which I guess have led to decisions made by government, including the decisions that we have before us today. The report of the Maritime Industry Development Committee is another of those significant reports and the Government, pleasingly, has seen fit to try to move to accommodate some of the recommendations of that report. The thing that catches my eye in this report in relation to the Government's decision is the recommendation that the investment allowance be restored. The Government has chosen another technique. It has chosen the capital grant process. I guess that, given the way in which it has chosen to run down or abandon the investment allowance for Australian industry, it had little option but to adopt the capital grant process. It would seem strange for the Government to reintroduce a measure which it had previously abandoned, good and beneficial though it was to Australian industry. The Government's consideration of this report has led to a trade-off in capital and manning; that is, a reduction in manning levels for a capital grant. The Government has given attention to the upgrading of skills, and I commend it for that. But I hope that the industry does not become like many other industries which have taken former operatives out of skilled work places, locked them away in an academic institution and within 10 years have become 10 years behind the times and irrelevant. I hope that there is a rapid turnover of staff so that indeed relevant and up to date information can be provided for students at the academy. I guess the real question now is whether this proposal will work. I must say that I think that it will improve the industry, but members of the House need to understand that there are four basic phases in shipping, as it is understood internationally. There is the original phase, the state of play as it was, I guess, 10 years ago, and the phase which Australia is just starting to move out of. Then there is the change phase, through which most of the world has gone. They have gone into a now phase, as it is termed in industry jargon. Australia is one phase out of step with the rest of the world: We are moving; we are just beginning the change phase. We have yet to move to the now phase, as has the rest of the world. The ultimate, of course, is the ship of the future. To me, these terms sound a bit like the jargon used by the Minister for Science (Mr Barry Jones) when he puts a proposition to the House, a theoretical model which may not fit any industry in particular. However, I think it does really illustrate for us how far we lag behind in practice. If we are to be competitive, heaps more must be done. This is only a small step; it is not a package, and the Minister should not make too much of it. Although it is a good achievement, we have a long way to go. We need those skilled people and we must look at some of the conditions under which they work, recognising, of course, that the capital component makes up 47 per cent of the total cost, fuel 19 per cent-I will come back to those factors-and manning 14 per cent. Let us look at the manning processes, as they come up for the most criticism. The crew levels for Australian ships mean that for every year worked, Australian crews have 338 days off. I shall make a few comparisons with other countries. In the United States of America, for every year worked the crews have 216 days off; in the United Kingdom they have 85 days off, although there are some other factors that compensate for that; France, 200 days off; West Germany, 174 days off; even Greece, 96 days off; and Japan, 90 days off for every year worked. We are way behind the practices of the rest of the world. I guess that we are running at about 2.25 crews per vessel, while the rest of the world, on average, is running at about 1.75 crews per vessel. So, we are behind by half a crew, and crews contribute greatly to cost factors. First class air fares have been mentioned. That is a cost which should be resolved. The other matter is on-board productivity. There should be a requirement of crews to carry out some additional duties whilst on board. It is not an unreasonable request. I have always found that men become discontented when they have nothing to do. The ongoing responsibility for the maintenance of a vessel should be a matter of pride to any mariner. It has been a traditional factor in the maritime industry but we have gradually dropped it. That is a pity because it involves a loss of knowledge, skill and an understanding of seamanship and the way in which vessels are affected when at sea. I do not see any reason for Australian crews behaving as though they were Qantas pilots, walking off the vessel, handing it over to the engineers and saying: `You fix her up, mate'. That is not good enough. It is not worthy, and it is expensive for us to abandon the tradition. If we can take up some of those practices and move into what is called the `now phase' of the shipping industry we will have a very efficient industry. The trouble with some other factors in these decisions by government is found in the appendix to the report of the Maritime Industry Development Committee. If one goes to government charges for shipping, one receives a real jolt as to what governments have done to the shipping industry over a period. For instance, the Department of Transport fees for a typical overseas trading bulk carrier would be in the region of $14,000 per annum. The Commonwealth light dues are about $92,000, and an additional $23,000 would apply, for example, in Western Australian waters. This Government introduced the duty on spares. It costs the industry about half a million dollars. For a typical coastal 100,000-tonne dead-weight bulk carrier it costs about $52,000 extra. Everybody in this House knows that the Treasurer (Mr Keating) has erected a branch of the Australian Taxation Office at every bowser and every other place where fuel is exchanged. There are huge additional costs. The average amount of sales tax per vessel is about $35,000. Payroll tax is about $94,000. Unexpectedly, the fringe benefits tax turns up in all the places where the members of the Australian Labor Party did not think it would come to rest. The fringe benefits tax on an Australian flag vessel, if applied fully, is likely to cost about $65,000 per annum. That is a cost against an industry to which the Government, through this Bill, will be making a capital grant. Look at the decisions that the ALP has made over a period on costs, but today it is giving back some of that money by way of a capital grant. It has adopted crazy management. It rips it out of this very important and fragile industry by putting a duty on fares; it rips into this industry by imposing additional excise; its sales tax is crazy; and then it whacks on the fringe benefits tax. That tax will go under the Opposition when in government. Look at what the Government has done. Today we will be passing legislation to grant money to shipowners to get better manning conditions on Australian ships but, at the same time, many times over it is increasing what that industry has to pay in duties, sales taxes and the fringe benefits tax. The $24 billion increase in taxes since it came to government is reflected in this industry. The key factors the nation has to deal with are our work place practices and our taxing systems. They are epitomised in this industry. All the Government has to do is carefully consider its policies in the broad scene and it will solve the problems of the maritime industry. Mr DEPUTY SPEAKER(Mr Millar) —Order! The honourable member's time has expired. Before calling the honourable member for Charlton, I suggest to the honourable member for Mitchell that in future speeches he keep in mind the need to address the Chair and not engage directly in conversation with other members of the House. I call the honourable member for Charlton. Mr ROBERT BROWN(Charlton)(5.35) —I am pleased to see that there is no significant opposition by members of the Opposition who have spoken on the Ships (Capital Grants) Bill 1987. This simply repeats the experience that we had with the last piece of legislation that the Minister for Transport (Mr Peter Morris) introduced in connection with the Australian National Railways. There was a bipartisan attitude towards that legislation as well. Mr Hollis —They can't find anything to criticise. Mr ROBERT BROWN —As my colleague the honourable member for Throsby indicates, it has been very difficult for them to find anything to criticise. The honourable member for Mitchell (Mr Cadman), who preceded me in this debate, found it very difficult to criticise things, so he looked for issues such as whether seamen returning home from an engagement are allowed to travel home first class, whether the Minister was correct in referring to this as a package proposal and whether the fringe benefits tax applies to the maritime industry. Really those matters are of very minor substance. There has been general agreement between the Opposition and the Government in relation to this. That reflects very well, of course, on the Minister and the people with whom the Minister works in preparing policy for the Department of Transport. Mr Hollis —And the Caucus committee. Mr ROBERT BROWN —And, as the honourable member for Throsby reminds me, the Caucus committee as well, a committee which I understand has worked in conjunction with the Minister very effectively and very successfully. The purpose of the legislation, as has been indicated by other speakers, is to give effect to the shipping industry package. I use that word `package', despite the fact that exception was taken to it by the honourable member for Mitchell. The industry package was announced by the Minister last December. This legislation deals with the capital assistance measures of that package. We need to keep in mind the fact that we are dealing with industry restructuring in an area which has been traditionally very difficult. This simply continues the approach of this Government to the whole question of effective restructuring of Australian industry. The Government has also given attention to the steel industry, with the steel industry plan. The honourable member for Throsby is very aware of that, particularly because of its importance to his electorate and his constituents. We have had the motor vehicle plan; the clothing, textile and footwear plan; the shipbuilding plan; and the heavy engineering plan. Now we have another one. It is in the spirit of that approach of the Government. The contribution being made by the Minister for Transport and his Department is very important in this regard. In the Minister's second reading speech he said: In today's tough economic climate we can no longer rely solely on traditional exports to keep our economy buoyant. He went on to say: If we are to enjoy future prosperity we must look to expanding our trade in services, such as exports of efficient Australian shipping services. I will say more about that later when I draw attention to the financial significance and the foreign exchange earning significance of that point, but I endorse it absolutely. The Minister's perception is such that the question of maritime services for Australian industry and Australian overseas trade is not just a matter of shipping commodities from one place to another but has other important elements as well. This package is based on the recommendations of the Maritime Industry Development Committee which was established by the Minister to consider all aspects of a report of a study by the Australian shipping industry into developments in manpower and training of seagoing personnel which had been initiated by the Minister. The report of the MIDC was called `Moving Ahead', and it is the outcome of that review. The MIDC is a tripartite committee of Australian ship operators, seagoing unions and the Federal Government. This industry development package is based on the recommendations of its report. It is a major element in the Government's long term strategy of developing an efficient Australian merchant fleet. The plan itself represents a new approach on Australian ships and is a sound basis for the development of Australian shipping in the future. The implementation of this plan has been set by the MIDC in a three-point package. First of all, the unions have agreed to changes which will improve efficiency. In particular in that regard, I would like to draw attention to a matter that has been referred to by others; that is, the introduction of multi-skilled ratings to Australian trading ships-ratings who will work both in the engine room and on deck. This integrated approach to ship crewing introduces into the Australian shipping industry the general purpose crew concept which has been developed by leading maritime nations. Secondly, ship operators have undertaken to invest, whenever commercially feasible, in the high technology ships that will introduce the new crewing arrangements. Thirdly, the industry has called on the Government to provide financial incentives in order to encourage this investment. Those financial incentives represent, as has been indicated, a 7 per cent grant on the purchase price of eligible new or second hand trading ships or, in certain circumstances, 7 per cent of the modification cost of an existing trading ship. Grants will be available only to ships which are crewed with Australian residents, at a level no more than that specified for the appropriate ship category, which are engaged in the carriage of passengers and/or cargoes and which are owned or registered in Australia. One of the significant things about this legislation is that the introduction of smaller crews will eventuate only if high technology ships capable of being operated at the proposed new levels are introduced into the Australian fleet. Of course, this is one of the purposes of this legislation. The purpose is to bring about a situation in which crewing levels can be reduced, but not by introducing dangerous practices within the industry and not by sweating labour within the industry. I think that is particularly significant. Why, in a country which enjoys such a relatively high standard of living and relatively good conditions of employment, should there be any difference in the maritime industry? Of course, there should not be. People within the maritime industry have a right to see those circumstances reflected in their conditions of employment, in the incomes which they earn and in the way in which they return from engagement, just the same as other people in the Australian community. One of the particular things to which we need to draw attention is that, while reference has been made to the crewing levels on Australian ships relative to those of other ships, it is not just a matter of looking at the crewing levels themselves. What we should do is look at the total cost of being able to achieve those crewing levels. There is no doubt that hitherto the situation has been such that the level of technology on many overseas vessels is significantly higher than on many of the Australian ships and, as a result, the crewing levels in some cases are lower. But if we were to take the marginal cost, in terms of the capital investment, to achieve the level of technology which is necessary to reduce, just by one or two, the crewing levels on some of those ships, we would find that perhaps the cost to those higher technology shippers overall is not significantly less than the cost to Australia, where we have higher manning levels. As the Minister has indicated, the purpose of this legislation is to encourage capital investment in the maritime industry. The crew costs on a modern ship represent about 14 per cent of the total operating costs. So I would say that a difference of two or three up or down in terms of the manning levels really does not matter very much overall. (Quorum formed) The Minister also said in his second reading speech: This package constitutes the greatest single step forward for Australian shipping. It represents the most progressive move made in decades. He said: It is an achievement that has been made possible by genuine goodwill, co-operation and consultation involving all parties-seafarers, ship operators and government. That comment by the Minister was reflected as well in a very good editorial that appeared in the Australian newspaper after the report came out. In part, that editorial said: But the report released yesterday by the Maritime Industry Development Committee indicates a quite spectacular outbreak of common sense. If the agreement between shipowners and the unions representing Australian crews announced in the report is put into effect, it could bring about a dramatic turn for the better in an industry which can determine the health of our whole economy. Mr O'Neil —A major breakthrough. Mr ROBERT BROWN —The editorial went on to say: Over the past few years there has been a marked decline in the number of strikes and stoppages involving Australian seamen. The agreements outlined in the report of the Maritime Industry Development Committee should help to make more competitive an industry that is vital to this nation, depending as it does so greatly on its foreign trade. Just a short while ago the honourable member for Grey (Mr O'Neil) interjected that it was a great breakthrough. Indeed, it has been a great breakthrough. The honourable member for Grey is very aware of that because of the very special interest that he shows in the development of Australian transport capacity. I know that he has followed and participated in this debate just as effectively as he did in the legislation that the Minister introduced concerning the Australian National Railways system. The Department of Trade itself has pointed out that the freight services deficit for Australia `has increased by 8 per cent in the first three quarters of 1985-86 over the corresponding period in 1984-85'. The Department of Trade has also said: While Australia remains heavily dependent upon foreign shipping lines for the carriage of its seaborne trade it will continue to run a substantial deficit on shipment services. As far as I am concerned, that is one of the fundamental issues related to this legislation and to the proposals which it seeks to put in place. The report `Moving Ahead', to which reference has already been made by a number of people and upon which this legislation was based, said in part: Australia has the fifth largest shipping task of the world's trading nations on a tonne/km basis. Yet Australian ships carry only about 3% (by volume) of our overseas trade. Commercially viable Australian ships can carry our exports and imports thus enabling Australia to retain their earnings, expand its employment base and generate more activity by servicing its own shipping industry. The benefits are great; the Bureau of Transport Economics has estimated that in 1984-85 Australia's sea freight bill of $5,800m contributed to the invisible's deficit. This cost of freight is approximately 11% of the total value of Australia's overseas trade. Australia is a major world trading nation. That is reflected in the fact that Australia's total export of goods and services in 1985-86, of $38.1 billion, represented 16 per cent of total goods and services produced in Australia. Of course, as we know, that places Australia among the world's great maritime trading nations. Unfortunately, a relatively small, almost minuscule proportion, of our total imports and exports is being carried on Australia's flagships and therein lies the difficulty. If we look at Australian Bureau of Statistics figures for the balance of payments it shows that for net shipments in 1985-86 the difference between exports and imports being carried on Australian ships is $2,435m. We paid overseas shippers that much as a net figure. But the situation is even worse than that. If we take the total cost of moving imports and exports we see that the total earnings by overseas shippers is $6,400m. Much of that amount does not show up in the ABS balance of payments figures. If, for example, imports are being sent to Australia on Australian ships that would be a payment from an Australian resident to an Australian resident and it would not show up in the balance of payments. If exports are being carried overseas on foreign ships that would be a payment from a foreigner to a foreigner and would not show up in the balance of payments figures either. So the more useful figure is the total shipping cost figure for exports and imports. An amount of $6,400m or 88 per cent was earned by foreign transport operators, and $860m or only 12 per cent was earned by Australian operators. So it is clear that by building up the Australian maritime fleet very significant benefits will accrue to Australia. I know from the comments that have been made by the Minister about the importance of these service elements within our current account that he is aware of the importance of extending this type of earning capacity on Australia's part, not just into shipping so that we are able to carry a lot more of our commodity exports and imports but also into the other ser- vices associated with the freight industry-for example, the insurance of freight. Most of that is now conducted in New York or London and it could and should be conducted in Australia. This year we are looking toward a total current account deficit of about $14,000m. If we were able to overcome completely the commodity imbalance in the current account deficit we would take out of it only $4 billion worth of commodity imbalance leaving in the current account deficit the $10 billion that relates to transfers and to services. The Minister has taken up this issue and I am hoping that we will increasingly do so because it is in that service area where our problems in relation to the current account are being experienced. Australia is almost totally dependent on overseas owned or overseas controlled shipping. When countries control shipping that gives them a tremendous commercial and economic power. Mention was made by an earlier speaker about an attempt to force Australia's producers of steaming coal to lower their prices significantly by Japan threatening not to send ships to Australia. Mr DEPUTY SPEAKER(Mr Millar) —Order! The honourable member's time has expired. Dr WATSON(Forde)(5.55) —I rise to speak on the Ships (Capital Grants) Bill 1987. As has already been stated, the Opposition does not oppose this Bill. In fact, the Opposition welcomes part of the package that the Minister for Transport (Mr Peter Morris) has put forward. There is no doubt that this package is designed to increase productivity in the shipping industry. We all know how one increases productivity in general. We can do it basically in one of three ways: We can reduce relative wage rates or costs; we can increase our investment in people; or we can increase our investment in plant and equipment. In many ways this package has attempted to do all three things. The package has attempted to reduce the number of people on ships to 21 or 23, depending on whether one is trading internationally or locally-coastal shipping-although I must admit that, when I look at world shipping, I understand that the number is falling to about 16. So in comparison with the rest of the world we are perhaps still suffering a 25 per cent disadvantage. I have also noticed that, over a period, as we have reduced the number of personnel on ships we also seem to have been increasing the amount of leave. So while we are reducing the numbers on ships we are not really reducing personnel costs in total because in some respects that is a trade-off between the numbers on ships versus the amount of leave. Of course, we might explain this by the fact that we have a monopolistic industry and a monopolistic union. The increase in productivity is also due to the new training program-the multi-skilled ratings that are being introduced for the first time-and for this the Minister and the Government should be congratulated. I will not go into that as the honourable member for Charlton (Mr Robert Brown) and other honourable members spoke earlier in depth about it. But I notice that one thing that is missing is the non-crew costs. There is an assumption in the legislation and also in the Minister's speech that non-crew costs of Australian and overseas ships are the same. I suggest to the Minister that they are not. The honourable member for Mitchell (Mr Cadman) has already addressed some of these things, such as looking at repairs and maintenance, but we also have a more complicated system of industrial relations in Australia which increases costs of shipping for shipowners. We have higher administrative costs and we have higher workers compensation and insurance costs in Australia than any comparable country. These aspects are simply not addressed in the Minister's second reading speech nor in the justification for the legislation. At the moment I want to concentrate more on the final aspect in the legislation-the encouragement for new ships. As the Minister has indicated, there is a 7 per cent taxable allowance. One important aspect of its introduction into the legislation is to encourage Australian shipowners to purchase new ships. There is no doubt that the Opposition welcomes increased investment in Australian industry. We have already noted in previous speeches to this Parliament that business investment in Australia peaked in 1971. That is shown as a percentage of gross domestic product in paper No. 10 of the Economic Planning Advisory Council. It rose for a short period under the Howard treasurership but it has fallen each year under this Government. In fact, if I recall correctly, in the last Budget the Treasurer (Mr Keating) predicted a further one per cent fall in the 1986-87 financial year. We applaud any increase in investment in Australian industry. However, I was puzzled by the fact that the 7 per cent was chosen. I read the Minister's second reading speech and could not find any justification for 7 per cent. I would be interested in finding out exactly what the justification is. I presume, because the Minister said, and the honourable member for Charlton just read out, that the legislation is based upon the Maritime Industry Development Committee report entitled `Moving Ahead'. I have reviewed that report and I found in a number of places some interesting quotations. Let me assume for a moment, given that it has not been stated, that what I find in that report is the rationale for the 7 per cent. I notice on page 28 of the report the following quotation: Council- that is, the Transport Industry Advisory Council- recommends that the Government should assist the development of Australian Flag Shipping by changing relevant income tax provisions to: Allow depreciation on new vessel buildings which are to sail under the Australian Flag to be claimed over a period of 3 years commencing in the year prior to commissioning. Further on that page, a detailed cost structure is given for a modern bulk carrier. On the top of page 29, following that typical cost structure detail, appears the following: The foregoing cost structure is calculated on the present 5 year depreciation rate and on the assumption of a 10% real rate of return being required for an investment to proceed. One makes the assumption, in the absence of any information from the Minister, that those recommendations in the report have something to do with arriving at the figure of 7 per cent. If, for example, one discounts at a 10 per cent real rate of return the cash flows associated with the depreciation schedule of five years versus cash flows associated with a depreciation rate over three years, one finds, believe it or not, that the present value differs by 7 per cent. Mr McGauran —It is hard to believe it. Dr WATSON —It is hard to believe it, but it is true. What concerns me is that one has to make some assumptions, and one of the things that we really do not know, because it is not detailed anywhere in the report, is the effective tax rates of the various shipping companies. One cannot work out how that 7 per cent is arrived at without knowing the effective tax rates of the various companies involved. If one assumes a 46 per cent or 49 per cent tax rate, one gets a linear transformation of the pre-tax cash flows and still comes up with a difference of, say, about 3 per cent or 3.5 per cent. If one adjusts for tax at 7 per cent, one comes up with the same answer. I presume that the object of the 7 per cent taxable grant was to give the shipowners meeting the requirements of the package the equivalent of a three-year depreciation schedule without actually changing the taxation legislation. That is the financial impact, although it is not stated anywhere. One should examine the assumptions underlying that procedure as well as what it means to the rest of Australian industry. Implicit in my presentation and in the report is a 10 per cent real rate of return. I did not see this being questioned anywhere, but I suggest to the House that a 10 per cent real rate of return is substantially greater than the general assets in our market receive. If one looks at any of the studies of the real rates of return in the financial markets, which really reflect the underlying assets, one finds that over a significant period of time the real rate of return is about 5 to 6 per cent. What is the justification for a 10 per cent real rate of return? What this is implicitly saying is that shipowning is twice as risky as owning other assets in the Australian economy. Nowhere do I see any justification for that kind of assumption, neither in the report `Moving Ahead' nor in the Minister's speech. Perhaps internationally shipowning is a very risky business, but what about coastal shipping? Coastal shipping is virtually a monopoly situation. It operates under a significant amount of government interference, or government protection. No distinction is made in the legislation between international shipping and coastal shipping except in manning levels; no distinction is made for the 7 per cent taxable grant. One would like to know what is the justification, in a government-protected industry such as the coastal shipping industry, for giving the shipowners a 10 per cent real rate of return. I am not saying that there are not some economic justifications for giving any kind of protection to shipowners. The honourable member for Charlton will certainly know about the theory of second best in economics. There is a significant amount of government interference in and protection of shipping companies in other countries. Using that theory, there might be some general justification for protecting or giving special grants to shipowners here. Again the honourable member for Charlton mentioned the exporting and importing of Australian goods, which was also mentioned in the Minister's second reading speech, as another justification for helping our balance of payments. I do not deny that in some circumstances those are quite legitimate justifications, but the question I raise in relation to the depreciation schedules is: Why help this particular industry, and this particular segment of the industry? Returning to what I said earlier, private investment, or business investment, in Australia has fallen consistently since 1971, except for a few years during the Howard treasurership. Every industry in Australia would benefit by having the equivalent of a three-year depreciation schedule as against a five-year depreciation schedule, except of course those already on a three-year depreciation schedule. What is missing from the Minister's second reading speech is the justification for picking out this particular segment of this industry and giving it a special advantage. Where is the economic justification vis-a-vis other industries in Australia for this particular capital grant? The Government has already done significant damage to all Australian investment by not renewing the investment allowance. The point was made in the report that shipping in Australia suffered after removal of the investment allowance. Investment generally in Australia suffered after removal of the investment allowance. The report mentioned that not since early 1985 had any new ship been purchased by an Australian company. To broaden this out, one might even say that since early 1985 interest rates have significantly increased in Australia, from around 15 per cent to 16 per cent to roughly 18 or 19 per cent right now-an increase of 20 per cent over that period. If one wants to look at the reason for investment in shipping falling, look at the removal of the investment allowance and at the increased interest costs paid on capital. In general, there are two major problems inhibiting Australian investment. One is after-tax returns, and that is one of the matters I have been trying to address. The depreciation schedules that are available to Australian industry in general are critical in determining after-tax returns. The second problem is interest rates, which make the raising of capital very expensive and also contribute to lowering after-tax returns on investment. The Government has to address in general public sector borrowing requirements, the Government debt, the gross domestic product ratio, government spending in general and, of course, its taxation practices in general-such as introducing the capital gains tax and removing the investment allowance-to get at the general problem. I conclude by asking for elucidation by the Minister of the justification for the 7 per cent taxable grant. I ask why this industry has been given it rather than other industries, and in particular whether or not the 7 per cent is an attempt by the Government to give this industry a three-year depreciation schedule when it is denying that to most other industries in Australia. Mr PETER MORRIS(Shortland-Minister for Transport)(6.10) —in reply-I thank all honourable members-particularly members of the Government caucus transport policy committee-who participated in the debate which started last Friday and continued today. The conclusion of this debate marks a very significant point in the attitude of the Parliament to Australian shipping. It has been a very significant debate because if one has listened to the contributions from both sides of the House-or later reads them-one realises that they have been constructive. Whilst there have been some minor differences here and there, they have been differences at the margin. The thrust from both sides of the House has been the same-that there is a place for efficient, competitive and reliable Australian shipping in our industrial scene. It is an area in which we should be concentrating much more. We should be seeking to expand the activities of such a shipping industry. Historically, the Ships (Capital Grants) Bill is one of a small group of Bills that was dealt with by the coalition prior to its dissolution. This Bill was dealt with by the coalition last Monday and it resolved not to oppose it. That point is significant because I understand some amendments are likely to be moved in the Senate by a member of the former coalition. We will then have the task of dealing with those amendments-amendments moved by a member of the former coalition to a Bill which was not opposed by the coalition. That is an interesting part of history. Mr Robert Brown —It might be said that this legislation destroyed the coalition. Mr PETER MORRIS —No, far be it from that. When in opposition the Australian Labor Party supported a bipartisan approach to the development of efficient, competitive Australian shipping. In fairness to the honourable member for Murray (Mr Lloyd) and the former Minister for Transport, the honourable member for Gwydir (Mr Hunt), the approach we followed in opposition on the Australian shipping industry is being pursued by the former coalition and Opposition members today. A number of honourable members spoke about the package. The strength of the package is that it requires each party to contribute something to get above the commercial threshold. The Government is contributing a taxable cash grant of 7 per cent. The work force is contributing by increasing productivity and moving-probably the most dramatic movement in the history of Australian shipping-from the class system of crewing a ship and very clear lines of demarcation to team working a ship, to a general purpose crewing concept where there is interchangeability of persons and tasks apart from officers on the ship. That is the major step forward that was needed in this country. So the work force is contributing that element of the package. The industry is contributing a commitment to invest in efficient, new or good quality second-hand tonnage. The three elements of the package are greater productivity by the work force, Government financial incentives through the 7 per cent taxable cash grant, and industry investment in new or good quality second-hand tonnage. I hope that we will complete the Committee stage of this Bill before we break for dinner, but I will deal quickly with some of the matters that were raised. In my last comments on the package I referred to the matter raised by the honourable member for Forde (Dr Watson). He said that it will be equivalent to three-year depreciation and in some cases it will be. It will vary slightly depending on the rate of return and the tax rate being paid by the shipowner concerned. As I said, the essential thing is that the legislation is a package; there is a contribution from each of the parties involved. The level of return or benefit to the individual ship operator will vary according to the circumstances I have described. The honourable member for Murray and a number of speakers on the other side referred to the two-crew concept. There has not been any change in that concept for many years. The honourable member for Forde said that crew numbers are going down and leave conditions have changed. They have not changed. The two-crew concept has been around for many years. The equivalent crewing standards vary in maritime nations in Europe and in Japan. But whilst we have a two-crew system which is more generous than the leave provisions in other countries, when comparing it with that of other countries one should take into account that often other forms of remuneration, such as overtime payments, add to costs. Australian crews are not paid overtime. Whilst at sea they are required to carry out those tasks which are necessary to the safe operation of the vessel. So when their vessel is at sea they can be called upon at any time to attend to their duties. However, no overtime is involved. This goes back to the establishment some years ago of the maritime award when overtime costs were abolished into a single award payment. The only true measure of crew cost competitiveness is the cost per berth. For instance, the difference in berth costs between West Germany and Australia is less than that reflected by the difference in leave levels referred to by the honourable member for Murray. At current exchange rates, the cost of an Australian berth is only marginally higher than that of northern European countries. On recent exchange rates the cost of a berth on an Australian-crewed ship is lower than that on a Japanese-crewed vessel. It is a matter of comparing like with like. It does not necessarily follow that all of the matters that have been referred to are of a like nature. Essentially the Bill is about improving the efficiency of Australian shipping but it goes beyond that. Shipping is a service. In the past we have proved very successful at exporting goods but very unsuccessful at exporting services, and that is really what this legislation is addressing. In the present economic circumstances in an increasingly competitive world, we must change that attitude. Trade in services is as valuable as, if not more valuable than, trade in goods. That is why it is so encouraging to me, as the Minister responsible for this area, to have the kind of debate that has taken place today from both sides of the House-a debate that recognises that there is an increasing and expanding role for efficient, competitive and reliable Australian shipping. I go one step further and refer to the matter raised by the honourable member for Charlton (Mr Robert Brown)-the services related to the operation of shipping. We have talked in this debate-we are dealing specifically with the shipping industry-about complementary services which are inextricably linked to shipping, including marine insurance, brokerage and agency activities. That is an area in which we ought to be increasingly involved. There is scope for greater genuine Australian involvement in those areas. I call on the Australian industry to recognise this fact and to seek ways of expanding Australia's role. Australia's balance of payments can only benefit from the pursuit of that course. So it is the other services that are related to shipping that now need to be examined and developed. Some mention was made of the waterfront during the debate. It is true that on most journeys from farm gates or factory gate to the destination of cargo the greatest share of costs is on land-shore-based shipping costs, costs related to moving and consolidating cargo and getting it on board ship at each end. The Government has recognised this fact in its establishment of a waterfront strategy. It has done that to improve the productivity and reliability of the waterfront and to address a buildup of major problems in a difficult, industrially complex industry not known for its competitive structure. While some may say that there is a monopoly of Australian coastal shipping, that is not the case but I will not go into it now. In getting boxes and containers across the wharf there is no alternative to that process. Whilst we are now addressing the questions of efficiency, productivity, reliability and competitiveness of Australian flag shipping, the very important problem the Government is now starting to address-it invites the same kind of positive approach from the Opposition on this issue-is that of the waterfront because it is critical to the improvement of our international competitiveness. I thank all honourable members who have participated in the debate. As I have said, this debate has been a watershed in the role of Australian shipping. I thank honourable members for their constructive and positive contributions. I commend the Bill to the House. Question resolved in the affirmative. Bill read a second time. Message from the Governor-General recommending appropriation announced. The Bill. Mr PETER MORRIS(Shortland-Minister for Transport)(6.21) —by leave-I move: (1) Heading to Part V, page 13, line 34, omit ``FOR WHICH GRANT PAID''. (2) Clause 22, page 14, lines 18 and 19, omit ``in respect of which a grant has been paid'', insert ``for which there is a category certificate''. (3) Clause 22, page 15, lines 1 and 2, omit ``in respect of which a grant has been paid'', insert ``for which there is a category certificate''. The reason for the amendments is to correct an inconsistency in the operation of the Bill as originally drafted. Clause 22 provides a means for the Secretary to the Department of Transport to approve a shipowner's request for crew above the appropriate benchmark level, or who are non-residents. The operation of this clause is confined to special circumstances such as temporary crew additions to cover a foreign shipyard's guarantee engineer or a technical specialist needed to overcome teething problems on a new building. As the Bill is presently drafted this provision applies only after the shipowner has been paid a grant for the ship in question. However, sub-clause 8 (4) requires that as a precondition for a grant being paid the crew operating a ship be in accordance with the appropriate benchmark level and be Australian residents. This means a situation could arise in which a shipowner is denied eligibility for a grant by taking on an unauthorised guarantee engineer. That person cannot be authorised, under clause 22 as presently drafted, until the grant is paid. Yet the grant cannot be paid until evidence is provided that the ship is operational within the appropriate crew benchmark. There is a clear inconsistency between clauses 22 and 8. This can be resolved simply by tying the operation of clause 22 to the existence of a ship category certificate rather than the payment of grant. The issuing of a ship category certificate is the first step in the process of qualifying for a grant and will occur before the commissioning of a new ship. The inconsistency between the clauses is thus removed. I also move: Clause 38, page 22, line 40, omit ``(d) or (e)'', insert ``(e), (f) or (g)''. The reason for this amendment is to correct an error in cross-referencing with sub-clause 38 (1). Sub-clause 38 (2) is intended to refer to decisions affecting the payment of grants under sub-clause 38 (1) (e), (f) and (g) of the Bill. I commend the amendments to the Committee. Mr HODGMAN(Denison)(6.24) —I am aware of the time constraints and in speaking to the Bill as a whole and in supporting the amendments moved by the Minister for Transport (Mr Peter Morris) my remarks will be brief. In the nature of the bipartisan debate on this legislation, it is appropriate now, rather than at the third reading stage, to make a brief comment on what I believe to be the bipartisan support of the Australian National Maritime Association Ltd-ANMA-which was formed last year and which brings together all major Australian shipowners and operators under the one banner. I think that at a time such as this we need to emphasise the absolute and fundamental necessity for a strong and effective maritime industry, which is vital to the future of Australia, not only to ensure a better trade balance and improve foreign exchange earnings but also to ensure logistic support for the nation in times of emergency. The ANMA has been formed to respond to these needs. It is the forum for the exchange of views and concerns between Australian shipowners and operators and the focal point for information and contact between Australian shipping industry, its clients, governments, the union movement and the community. It must be emphasised that the plain fact is that foreign vessels carry 97 per cent by volume of Australia's overseas trade. We are one of the world's major suppliers of raw materials. We are the world's largest island continent. We are situated great distances from our markets. I am sure that the Minister-and, indeed, the Government and the Opposition-would wish to see a much higher component of Australia's trade being carried on Australian made vessels crewed by Australians. I would like to thank Mr Phil Eutrope, the Chief Executive of the Australian National Maritime Association, for being very active in advising members of the Parliament of the establishment of the organisation. I wish Mr W. Bolitho, the Chairman of ANMA, every success. I congratulate them-I am sure that the Minister also took pleasure in this-for highlighting in their very excellent publication the T.T Line's magnificent passenger roll-on roll-off vessel, the Abel Tasman. I conclude by asking the Minister to talk again with the Minister for Trade (Mr Dawkins) and, indeed, the Prime Minister (Mr Hawke), about the possibility of attracting to this country an additional world shipbuilder. I am reminded that in 1967 the Verolme united shipyards seriously considered the establishment of an operation in Australia, in Tasmania. I am well aware of the things which have changed from 1967 to 1987. But I put it to the Minister, as I come from Australia's maritime State-I am proud of the fact that we in Tasmania are born with salt water in our veins-that we have the capacity to become the world's major shipbuilder. I am delighted that our six submarines will be built in Australia. I would like to see more built in Australia. I commend this Minister and this Government in anything they can do to ensure not only that we have a higher component of Australian ships carrying our trade to the markets of the world but also that we start building the best ships in the world for the best traders in the world. There is a world market out there. I say across party lines that I am sure that all members of the Parliament would join the Minister in extending the influence of this very good legislation which he has introduced and which has been supported so strongly on both sides of the chamber. Mr PETER MORRIS(Shortland-Minister for Transport)(6.27) —I thank the honourable member for Denison (Mr Hodgman) for his complimentary remarks to the Government. I remind him, as I am sure he would be happy to have me remind him, that it was this Government and this Minister that put forward the proposal that we provide the money to Tasmania to purchase its own ferry, the Abel Tasman, to which he has referred. It was a very wise decision and it has been proven to be the right decision in practice. Mr Hodgman —It is a top vessel. Mr PETER MORRIS —It is a top vessel with a top crew. In relation to the last matter that the honourable member raised in respect of Australian shipbuilding, let me say that there is one very basic rule. In order to have a good shipbuilding industry, one needs first to have a good domestic shipping industry. The great shipbuilding nations of the world generate their shipbuilding capacity from their own fleet. This legislation provides the environment in which the Australian shipping industry can expand and grow on the basis of efficiency, competitiveness and reliability. I formally table the supplementary explanatory memorandum. Amendments agreed to. Bill, as amended, agreed to. Bill reported with amendments; report-by leave-adopted. Bill (on motion by Mr Peter Morris)-by leave-read a third time. Sitting suspended from 6.30 to 8 p.m. Debate resumed from 2 April, on motion by Mr Barry Jones: That the Bill be now read a second time. Madam SPEAKER —I understand that it is the wish of the House to debate the Customs Tariff Bill concurrently with the Customs Tariff (Miscellaneous Amendments) Bill and the Customs Tariff (Installations at Sea) Bill. There being no objection, the Chair will allow this course to be followed. Mr MOORE(Ryan)(8.00) —The Customs Tariff Bill, the Customs Tariff (Miscellaneous Amendments) Bill and the Customs Tariff (Installations at Sea) Bill being debated cognately tonight give effect to a process which was commenced many years ago by the Customs department through the Customs Co-operation Council and which provided many trips to Brussels for the development of an international tariff standard, which is called the harmonised tariff system. This is set to come into effect on 1 January 1988 and gives effect to many years of work in this area. Many nations have come together to try to have one system of classification which would be enormously helpful for communication. If this is the case, and the ratification by 17 nations comes about by September 1987, Canada and America will join the system which, of course, will be extremely beneficial to us all. The Department of Industry, Technology and Commerce recommended these procedures some time ago. I remember that the original concepts of this go back to the halcyon days when I was a Minister in this area. The consequences of those decisions are now with us tonight. Having received the recommendations through the Minister for Industry, Technology and Commerce (Senator Button) the Government referred this matter to the Industries Assistance Commission to see what its assessment of the new classifications would be. Thus we have these Bills before us tonight. The Opposition does not oppose the legislation. In fact, there are many aspects of it which are beneficial to Australian business. In particular, it will result in goods entering Australia more easily. This certainly will be a far easier system for users, under an international scheme, to be able to register their imports and to have the same classification picked up in electronic transfers through banks, insurance companies and, no doubt, customs agents. As an extension of that, statistics to be gathered by governments and presented for the record should also be considerably enhanced. The types of documents which today create problems will be eliminated. Matters will be far more speedily dealt with by the agreement on classifications that will be acceptable throughout the world, particularly to those nations party to the agreement. The only disadvantages that I can see are in the Australian area where extra classifications have been brought in, over and above the international ones. I use, as an example, the international classification of a tyre. It is classified under a certain number. Australia will be adding to the 5,000 titles under the Customs Act a further 2,000 or more which will break down some of the entries. In other words, a tyre internationally becomes a tyre for a truck, a car, a scooter or something else. I have no doubt that this is designed to provide industry assistance, more accurately to address the matter, to help in revenue raising, or to meet certain international commitments. But in effect it will add an extra loading to the Australian Customs Service, which is not there at the moment, in determining tariffs in these areas. On top of that, it is reasonable to assume that the extra classifications that will come about will impose extra costs in the system, which will not be imposed on other nations. The Australian tariff concept, in its move through the vast Customs Tariff Act of something like 270 pages, will bring about an increased administrative cost of approximately $1m. In the initial stages, I understand, the two systems will be running in tandem-the new scheme and the old scheme will run together. I can understand the reasons for that but certainly it will add to costs in the initial stages. In my experience, certain classifications are bound to raise inquiries from certain importers. Whenever there is a change of classification there is always an argument at the margin as to what area things should be in. I hope that those changes can be sorted out outside the Administrative Appeals Tribunal or an IAC reference. Failure to do so will add considerably to costs to importers and, therefore, to the manufacturing process of the nation. It strikes me that the measures brought before us tonight without any doubt will be a major addition to Customs processes. In the initial stages, when I saw the attempts at world-wide classification I thought then that this was the right way to go if it could be achieved. No doubt there have been many compromises and many long nights to get to where the Government is now. As a consequence, I compliment the Government. But this has not been done wholly without some costs. I hope that the Government and the Department responsible for Customs will look at transitional costs and make sure that no additional protection or bounty payments are accorded to industries which ought not receive them but have done so because of the reclassification. The mechanics of this new legislation are bound to contain some minor technical faults as time goes by. That is inevitable. I hope that the unintended consequences-to use a well-known phrase-will be looked at as quickly and expeditiously as possible so that this does not cost Australian consumers any more than it ought. I think that the running of the two systems in tandem is inevitable but the costs associated with it could be quite high. The Opposition does not oppose the Bills. Mr MAHER(Lowe)(8.09) —Tonight we are debating the Customs Tariff Bill 1987, the Customs Tariff (Miscellaneous Amendments) Bill 1987 and the Customs Tariff (Installations at Sea) Bill 1987. The Customs Tariff Bill essentially is a rewording of existing Customs legislation, as the second reading speech states, to try to harmonise with other countries in the world. My interest in the Australian Customs Service has been through relatives. A cousin of mine was Collector of Customs in New South Wales for many years-the late Tom Maher. I had an uncle-the late Jim Maher-who, throughout the war and for many years afterwards, was in charge of the prevention and detection section in the Sydney Australian Customs Service Office. When I was a clerk at the High Court of Australia, although he had then retired, he appeared in the Bainbridge-Hawker case-a celebrated prosecution-to give evidence about documents. That was in about 1961. I subsequently qualified in law and worked for what used to be called Deputy Commonwealth Crown Solicitor's Office in Sydney, where I handled many of the Customs prosecutions or advised on prosecutions. In doing so I developed a close working relationship with many Customs officers. Subsequently I went into parliament and, like all members of this House and State members, I had contact with Customs matters. All honourable members know of people who are unfortunate enough to come back from overseas after perhaps visiting relatives in Greece, Italy or Lebanon and who find by chance that something has been put in their bags without their knowledge. Perhaps an aunt had packed some salami, some grape vine cuttings or something else that was contrary to the Customs regulations. When this happens constituents come to their members offices very distressed at having a prosecution against them. They are always clutching a summons. I have also had cases of people who have bought fur coats overseas without knowing they incur heavy duty. They have come back to Australia, only to have their fur coat impounded. All members of parliament come face to face with Customs officers and procedures, mainly at that point of contact. This legislation results from the work of the Customs Co-operation Council in Brussels. As members of parliament we know the problems of comparing tax systems-comparing Australian taxes with American taxes or West German taxes-and how much more difficult it is to compare Australia's balance of payments with those of other countries because items included in the balance of payments, which is the list of imports and exports, vary from country to country. The aim is to try to standardise reference to imports to Customs items so that something which is given a certain reference in the United States of America has the same reference here. This is a very practical proposal and one for which the Government is legislating tonight. I am pleased that the Opposition is supporting it. In the second reading speech the Minister for Science and the Minister assisting the Minister for Industry, Technology and Commerce (Mr Barry Jones) referred to `a new international nomenclature' and its development. He talked about harmonising commodity description and coding systems. The International Convention on the Harmonised Commodity Description and Coding System, to which the Bill gives effect, aims to provide international uniformity in the classification of goods in Customs tariffs to make it easier to collect, analyse and compare world trade statistics, both in imports and exports. It will also provide a common international system of coding, describing and classifying goods for commercial purposes. Obviously there are some very important aspects of the legislation for Customs officers and for those who are involved in importing and exporting. The proposal has been developed over some years and I am told that already five nations have signed and ratified the convention. Australia was the first nation to sign it, and it is now subject to ratification. Australian officers have had an important hand in developing the whole convention. The convention will not come into effect until 17 nations have signed and ratified it but it is hoped that it will apply from 1 January 1988. The Minister's second reading speech covered most of the aspects of the Bill on which I wanted to touch. I notice that with the schedules there are explicit details of all the Customs duties on fruit, vegetables, horses and on all sorts of building equipment et cetera. In a nation which, regrettably, is importing more than it is exporting and which depends so much for its way of life on imports, this legislation is of great significance. I wanted to make a couple of other points. This legislation will bring about cost savings and it will mean a less complex, less fragmented tariff, not only for the Government but also for the private sector and all those who are involved in Customs work. If the legislation has the support of the Opposition it is unnecessary to delay the House. I commend the Bill to the House. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr John Brown) read a third time. Consideration resumed from 2 April, on motion by Mr Barry Jones: 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 John Brown) read a third time. Consideration resumed from 2 April, on motion by Mr Barry Jones: 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 John Brown) read a third time. Debate resumed from 2 April, on the following papers presented by Mr Beazley: Defence of Australia-A policy information paper, March 1987. Defence of Australia-A policy information paper, Ministerial Statement, 19 March 1987 and on the motion by Mr Kerin: That the House take note of the papers. (Quorum formed) Ms FATIN(Brand)(8.20) —Previously we were discussing the most significant statement concerning Australia's defence ever submitted for the scrutiny of the Australian people. Tonight I want to continue the remarks that I made on that occasion. Another indication of the massive development involved in this whole project is the number of Navy houses which will be required. News about new Navy houses has always been welcomed by the local community, for obvious reasons. One has only to think of the various tradespeople and contractors for whom a project of this kind generates employment. So far in the Rockingham area we have built 380 new houses for naval personnel. The relocation of half the fleet over the next 10 years means that a further 690 houses, in addition to the 380 houses that already exist, will be required. While on the subject of defence housing, I would like to pay a further tribute to the Minister for Defence (Mr Beazley) for the improvements being effected under his guidance in the general standard of Defence Force housing. Actually, the standard of accommodation already provided at HMAS Stirling, which is in my electorate, is very high, and this is acknowledged by the service families who live there. It is a sad fact that this is not the case in other parts of Australia, where Defence Force families have had to face poor living conditions because of neglect and underfunding in previous years. This is an area of the Defence portfolio in which priorities were desperately in need of reordering when this Government came to office four years ago. I am pleased to note in the White Paper that the 1986-87 Budget provided a real increase of 17 per cent for defence housing and that some $750m will be spent Australia-wide on new housing over the next 10 years. I also welcome the creation of the new Defence Housing Authority, which will begin operating formally on 1 July this year. The Authority is already operating on an interim basis, and recently held some extremely productive meetings in Rockingham. I was particularly pleased that members of the Authority were able to hold discussions with some of the wives of HMAS Stirling personnel, who had very valuable contributions to make on the subject of improving accommodation at defence establishments around Australia. One further major initiative taken by this Government deserves mention in the context of this White Paper. Mrs Darling —What's that? Ms FATIN —It is the commissioning of the survey by Sue Hamilton from the Office of the Status of Women on the problems faced by Australian Defence Force families. I am sure that the honourable member for Lilley will be aware of those. Sue Hamilton's report, which I commend to honourable members, identified deficiencies and problems in the support available to service families and made recommendations about how these might be redressed. In response to Mrs Hamilton's report, the Government has already set up a national consultative group of service spouses. I had the pleasure recently of meeting the chairperson of this Committee, Mrs Val Lawrence, when she joined me and my colleagues on the Government members' defence force action committee to discuss many matters relating to defence families. This year the Government will also establish a defence families information and liaison service. Mrs Hamilton's report found other areas of concern, such as the length of postings, disturbance allowances and removal for separated spouses. All these conditions of service and Mrs Hamilton's recommendations are under consideration by the Government, and I know that the Minister is examining the situation with a great deal of sympathy. It seems to me that the strength of the Government's commitment to provide support for the families and dependents of members of the Defence Force is particularly significant in view of the fact that the new strategy for the defence of Australia involves the redeployment of so many people. I referred earlier to the fact that the impact on families on large scale relocation to the north of Australia would need to be very closely monitored. All the questions about which the defence families in my electorate are so concerned will be particularly pressing in an environment with no existing infrastructure. Issues like child care, schooling and assimilation with local communities will need to be addressed with a great deal of sensitivity if the very real needs of families are to be treated as seriously as they should be in this whole exercise. I feel confident that the steps already taken by the Government in this regard are gradually beginning to provide the kind of assistance which defence families have long needed. I am equally sure that these support systems are going to be relied on heavily as the proposals under consideration here tonight come into effect. As honourable members will know, the Sex Discrimination Act specifically exempts combat and combat-related duties in the defence forces on the understanding that as many positions as possible should be open to women while still maintaining combat preparedness. Prior to 1984, when the Sex Discrimination Act and new Defence Force employment policies were introduced, the proportion of women in the Defence Force was 6.5 per cent, and women were pretty much confined to the traditional areas of female employment. Under the equal opportunity policies of this Government, this percentage has increased quite significantly. The Minister has expressed a commitment to expand employment opportunities for women in the Australian Defence Force, and the Government will continue to make available as many positions as possible on merit. Close study of the paper under consideration indicates clearly that this Government has been successful in developing a coherent and rational policy for the defence of Australia as we move into the twenty-first century. I commend the White Paper to the House and I congratulate the Minister for Defence on its presentation. Mr McVEIGH(Groom)(8.26) —I think it is indicative of the cavalier manner in which the Labor Government treats the matter of defence to find that Order of the Day No. 10 does not even rate a mention on the blue sheet. I think it is a very cavalier approach on the part of the Government to worry about things that do not matter, but not to consider that the very important matter of defence warranted sufficient consideration even to let the people of Australia or, for example, the school-children who come in here and who are interested in the program for the day-information which they get from the blue sheet-know that the matter would be discussed. They find that the Hawke-Keating socialist Government did not think enough of the matter to put it on the blue sheet. Mr Conquest —You are quite right, too. Mr McVEIGH —The honourable member for Hinkler points out that once again I am immaculate in my honesty. He says that I am quite right, and I appreciate that great compliment that has been paid to me by him. We in the Opposition believe that defence is of great importance. On the whole, during the past four years the world has basked in relative peace and security. The wars which are going on in various parts of the world are more or less localised, based on either religious or philosophical grounds. Australia is indeed the lucky country when it comes to conflicts of this nature. As a multicultural nation, we have no overt hostilities occurring between our fellow countrymen. It has been said that our only problem is that we have no problems. It is for this reason that we have come to accept the fact that peace is something that we can take for granted while war is something which will not affect us directly. We cannot imagine Bondi Beach or these beautiful rolling hills of the Darling Downs as battlegrounds with death and destruction on the scale of a Beirut or Dresden. Because of this, Australians have developed a soft underbelly, as it were, when it comes to debating our defence needs and requirements. I must express my disappointment at the lack of enthusiasm that the Dibb Review of Australia's Defence Capabilities has stimulated in the country as a whole, and I hope that the White Paper will come under greater scrutiny. Last year I had the honour and privilege to be part of a parliamentary delegation to New Zealand. That delegation was exceptionally well led by the honourable member for Moore (Mr Blanchard), and the honourable member for Franklin (Mr Goodluck) was equally as good as the deputy leader. In New Zealand it was interesting to note that the New Zealanders as a whole seemed to know a lot about the Dibb report. They acknowledged its significance for the strategic defence of both New Zealand and Australia. I was amazed that a country of so few people placed such a great significance on the Dibb report which, as honourable members know, was commissioned by the Australian Government. One was a little disappointed that, in effect, a prophet was unknown in Australia but known in another country. It is necessary for us to have our priorities right. Is this a reflection of our society and its apparent disregard for the subject of our security, or does the ordinary Australian lack the imagination to see the need for such a debate? As a Queenslander who grew up during the last great war, I share the resentment of all Queenslanders and many southerners at the purported Brisbane Line strategy that was prevalent at that time. I must say that I support the emphasis that Dibb and the White Paper place on the strategic importance of our northern and north-west borders, for this is our true first line of defence. Even though our present relationship with New Zealand is strained, I cannot envisage the Kiwi Navy invading our shoreline at Melbourne or Hobart. Mrs Darling —Never. Mr McVEIGH —Quite right-never. We beat New Zealand at football, but that is hardly a matter for conflict such as we are talking about here. Alas, it would be ideal if our first line of defence were away from our shores and in the open Pacific or Indian oceans, but this is just not practicable considering the areas needed to be protected. The Dibb report and the White Paper recognised this and based their strategy against these premises. Threats against Australia, either perceived or real, would appear to be low level in nature. Nevertheless, Australia must put herself in the position of defending against these low level threats. The development of our air and naval forces, surveillance and intelligence capabilities is necessary to deny an enemy the sea-air gap. This is Australia's best guarantee of safety in the event of some small force landing on our northern soils. To guard against this occurrence, the White Paper recommends a strategy of comprehensive defence in depth, consisting of a layered approach to fill this sea-air gap. The establishment of up to three over the horizon radars in the north of Australia will help develop a national system of air defence and airspace control, which is a sound initial detection move. Enhancing our naval air capability in order to resist enemy forces and protect focal points and shipping lanes is a logical secondary level of defence. I support our air defence capabilities consisting of F18s to the north at Tindal and the bare bases at Learmonth, Derby and Cape York Peninsula. As well, I applaud the move to encourage the local shipbuilding industry by giving Australian heavy engineering firms the opportunity to play a leading role in the construction of our new submarines and long range light patrol frigates. Developing a highly mobile Army as the third line of defence is a sensible move, particularly given the highly dispersed population located in the far north. In taking a stand to protect our vulnerable north and north-west, the White Paper has put us squarely on notice to be on our guard and steadfast in our determination to protect ourselves on our front line. Dibb recommended in his report that, in order to maintain and protect our shores, a 3 per cent real growth in defence spending should be accommodated over the next five years. It will be interesting to see what is said in the statement next week. The August Budget last year allowed for only a one per cent real increase in spending, which is well below the 3 per cent suggested by Dibb in order to maintain an independent defence stance. This one per cent growth compares with the 2.9 per cent growth in the previous year's Budget and an annual average of 2.7 per cent for the Labor Government's four-year tenure. If our defence forces are to be caught in the restraint with equity net, I feel they should look hard at getting the best that their one per cent, or $25 billion, can buy. Our defence spending must be tailored to our particular needs, at the same time keeping in mind the recommendations of the various reports as to where we need the emphasis to be placed. There are obviously substantial opportunities for those in Australian industry who are willing to target new areas of growth in defence manufacture. Because self-reliance is an important strategy, strategic requirements and economic realities will mean that local production and support capacities will be chosen very selectively. While this is not a panacea for remedying the broader ills of Australia's secondary industry, it can generate a strong demand for local production of high usage spare parts as well as local repair, modification and maintenance capabilities. I most heartily support the suggestion that most areas of future defence industry growth should be in the private sector. One of the themes running through Dibb's report is to maintain a self-reliant defence program, but just how self-reliant is self-reliant? There have been calls from a confused minority to develop an antagonistic approach towards our long term allies in order to achieve short term gains in our export area. I wish to dissociate myself from these ridiculous attempts to put our security at risk. The defence of Australian soil and Australian people is paramount and, I suggest, sacrosanct. Instead of antagonising our friends, we should be working with them to eliminate the main cause of the problem and create a favourable trade environment for the world generally. I pause here to congratulate the Government on its decision to lift the tax impost on reservists' pay, thereby ensuring that they play a more integrated role within the regular forces. It is good to see that the Government has acknowledged that the earlier decision to tax reservists' pay was, according to the Defence Minister, not the best at the time. However, other troubles which are brewing have much more serious implications for the defence of our nation. The trouble to which I am referring is the large number of resignations of seasoned officers and experienced non-commissioned officers. The latest manpower statistics, for December, show the strength of our armed forces slumping to 69,064, the lowest ever. The number of officers who resigned in the first seven months of 1986 was nearly that of all the officers who left in the whole of the previous 12 months. It has been stated that the loss is so serious that it is cutting into the operational capability of all three Services, with the greatest impact being felt in the Royal Australian Air Force. In my electorate of Groom I am constantly made aware of the Services' dissatisfaction with conditions of service and pay, poor housing and the uncertainty caused by the Dibb report. The Minister has moved in the right direction in the housing area by bringing in the Defence Housing Authority Bill and dealing with problems identified by Sue Hamilton in her recent Review of Effect of Service Life on Spouses. Unfortunately, these decisions were made too late for the estimated 857 officers who have voiced their displeasure with a defence career over the last year. The quote that Dibb used in his report by the American Secretary of Defense, Mr Caspar Weinberger, when coupled with this drain of experienced personnel, appears to be ominous. Mr Weinberger is reported to have said that the United States may: . . . offer substantial amounts of economic and military assistance to our allies in time of need . . . we cannot substitute our troops or will for theirs. The White Paper recognises this fact and strongly recommends the development of a self-reliant stand. Either we do more to retain our experienced personnel or we face the prospect of a real cut in our defence capability. Lastly, it must be said how ridiculous it is for Caesar to be paying Caesar in the form of a fringe benefits tax. An estimated $160m of the Defence budget is expected to go back to the Federal Government through this iniquitous tax which we will repeal when the National Party becomes the Government of Australia. This tax is a waste of time and will do nothing to improve the living standards of our defence families. In conclusion, I basically agree with the main thrust of the White Paper and the premises on which it is based. In this uncertain world in which we live it is important to be seen to be able to defend ourselves. In the troubled economic times with which we are now faced it is inevitable that all sectors of the Federal bureaucracy will bear a proportion of fiscal responsibility. We must all be seen to share the responsibility of protecting ourselves by the fairest and best means possible. Mr LINDSAY(Herbert)(8.40) —This debate concerns the national security of Australia and, I hope, peace for Australia. The debate is both timely and important; timely because the 1987 defence White Paper offers an achievable policy of defence self-reliance, and important because it involves the most basic duty that any Australian government and all Australians share-the duty to protect and strengthen the peace. The Minister for Defence (Mr Beazley) has stated that the main aim of the 1987 defence White Paper is to establish a comprehensive overall approach to Australian security that will be the basis for responsible defence planning in future years. The 1987 defence White Paper provides a clear direction towards the development of a force structure for the Australian Defence Force through and beyond the year 2000, based on the Hawke Government's policy of self-reliance and Australia's obligations as a member of the Western strategic community. Australia is one of the most secure countries in the world. It is distant from the main centres of global military confrontation and it is surrounded by large expanses of water which makes it difficult to attack. But it would not be prudent to assume that we will always be able to conduct our affairs without challenge. Our strategic circumstances might change and become less favourable than they are today. Australia must have the military capacity to prevent any enemy from attacking us successfully on our sea and air approaches, gaining a foothold on our soil or extracting political concessions from us through the use of military force. As long ago as 1936 John Curtin told this House: The people of Australia would expect this country to be capable of defending itself should the occasion arise. He went on to say: A greater degree of self-reliance in Australia's defence is essential. The concept of self-reliance for the Australian Defence Force is not new. The term first appeared in the Australian defence literature just after World War II, doubtless born out of Australia's experiences during that war. But it was not until the 1976 defence White Paper that increased self-reliance was identified as a primary requirement for Australia's security and defence policy. In a key paragraph that White Paper said: A primary requirement emerging from our findings is for increased self-reliance. In our contemporary circumstances we can no longer base our policy on the expectation that Australia's navy or army or air force will be sent abroad to fight as part of some other nation's force . . . We do not rule out an Australian contribution to operating elsewhere if the requirement arose and we felt that our presence would be effective and if our forces could be spared from their national tasks. But we believe that any operations are much more likely to be in our neighbourhood than in some distant or forward theatre. That statement is as valid now as it was in 1976. Regrettably, the Fraser Government did not pursue the policy of self-reliance to the extent that the 1976 White Paper intended. Indeed, it was the failure of the Fraser Government to give precise meaning to the concept of self-reliance that left Australia's defence forces without the guidance on which to base their decisions on force posture, operational doctrine and equipment purchasing. The election of the Hawke Government in March 1983 not only committed Australia to developing a self-reliant defence capability but also determined that defence self-reliance would be set firmly within the framework of our alliances and regional associations. Above all, the Hawke Government has strengthened and made more enduring Australia's alliance with our great ally the United States of America. Australia and the United States of America are part of the Western community of nations-the free world. Australia and the United States of America are committed to freedom, democracy, the rights of man and the pursuit of peace. Our two countries do not start fights. President Reagan-speaking, I believe, not only for America but for the rest of the free world-has said: We will never be an aggressor, we maintain our strength in order to deter and defend against aggression-to preserve freedom and peace. In 1985 the Hawke Government commissioned Dr Paul Dibb to examine the content, priorities and rationale of defence forward planning and to advise on which capabilities were appropriate for Australia's present and future defence requirements. Dibb took as his starting point the strategic assessment endorsed by the Hawke Government. He then examined the three essential elements of our defence planning: That Australia should aim for defence self reliance; that sound defence planning should be based on realistic Budget parameters; and that, although low-level military threats to Australia could emerge relatively quickly, it would take many years for any country other than a super-power to equip itself to attempt a major military assault. When tabling Dibb's report in this House on 3 June 1986, the Minister for Defence described it as the most comprehensive and significant analysis of Australia's defence requirements since the end of World War II. Indeed, Dibb's report aimed to provide the basis and rationale for the structure of Australia's defence forces over the next decade. Put simply, defence self-reliance means defence in depth. It gives priority to meeting any credible level of threat in Australia's area of direct military interest. Paragraph 1.11 of the report has this to say about Australia's area of direct military interest: This area stretches over 7000 kilometres from the Cocos Islands to New Zealand and the islands of the South-West Pacific, and over 5000 kilometres from the Archipelago and island chain in the north to the Southern Ocean. It constitutes about 10 per cent of the Earth's surface. The area of direct military interest is of fundamental importance in defining and developing a self-reliant defence force. It does not, however, mark the limits of our strategic capabilities. Australia's region of primary strategic interest lies in South east Asia, the south-west Pacific and the east Indian Ocean. The 1987 defence White Paper properly notes: Political, economic and military developments in this area are of fundamental concern to Australia. Paragraph 2.18 of the paper pointedly states: Without affecting the relatively favourable nature of the region's strategic environment, there have been a number of political and economic developments with the potential to affect regional stability and security. Of particular concern is the possibility for interference by external powers in regional affairs. I mention two areas of uncertainty in South East Asia: First, the establishment of the Soviet military presence at Cam Ranh Bay and, secondly, the economic and political problems in the Philippines. The most dramatic military-strategic input in South East Asia since 1979 has been the rapid expansion of Soviet military presence and power in Indo-China. Prior to March 1979, the Soviet Union's military presence, in terms of the availability of bases and facilities in the region, was nil. Nowhere is Soviet military expansion more pronounced and determined than in Indochina in general and Vietnam in particular. The Soviet Union has a major ally in Vietnam. Paul Dibb, in his article entitled `Soviet Strategy Australia, New Zealand and the South-West Pacific', published in the magazine Australian Outlook in October 1985, observed: Access to the naval and air facilities at Cam Ranh Bay and Da Nang has given the Soviets not only a forward presence in the region but also opportunity for the Soviet Navy to operate in the South China Sea on a continuing basis and to deploy to the Indian Ocean in a crisis . . . Soviet forces based in Vietnam have the range to deploy in the vicinity of Australia and New Zealand. In the most recent edition of The Military Balance, published by the International Institute for Strategic Studies, it is stated that there were, on average, 20 to 25 Soviet vessels stationed at Cam Ranh Bay at any one time along with eight Bear and 16 Badger bombers and a squadron of Mig-23, Flogger, fighters. Cam Ranh Bay also houses the largest communications and electronics surveillance facility outside the Soviet Union. Today, Cam Ranh Bay can be regarded as a fully-fledged, totally Soviet-run base, with the Vietnamese relegated to providing perimeter security. Dr S. Bilveer, in the Asian Defence Journal of August 1985, observed: The acquisition of military facilities in Indo-China represents a major plus for the Soviet Union as far as future bargaining with the United States and the People's Republic of China is concerned. Indeed, it is a high possibility that in view of the deterioration of the situation in the Philippines and hence the plausibility of the American bases being evicted, Moscow may successfully `impress' upon Washington to enter into a `bargain of the decade': The dismantling of military facilities at Cam Ranh Bay and Da Nang by the Soviets in return for the American withdrawal from Subic and Clark. This may well have been the long term goal of the Soviet Union in the region when it embarked on its militarisation in Vietnam. If this is realised, then the possibility exists for a major turning point in the political-military-security situation in the Asia-Pacific region, and in this regard, the importance of the Soviet Military presence and facilities in Vietnam should not be under-rated. If anything, it should be viewed, potentially, as causing great instability to the ASEAN States. Paragraph 2.23 of the 1987 defence White Paper claims, inter alia: . . . the continuous presence of Soviet warships and military aircraft, based in Vietnam, is an adverse element in regional security perspectives. However, I would prefer to adopt the assessment of Paul Dibb who has described the Soviet military lodgment in Vietnam as `of direct strategic concern to Australia because this is the first time that Soviet conventional military forces have gained access to a base in the region from which they could conceivably threaten Australia'. The uncertainties in the Philippines must be of serious concern to Australia. Paragraph 2.26 of the paper states that two issues in the Philippines are directly relevant to Australia's strategic outlook. The first issue is the insurgency of the communist-led New People's Army which, I believe, seeks the violent overthrow of the Aquino Government and the establishment of a communist regime in the Philippines. The second issue is the contribution the Philippines makes to regional security by hosting the major United States presence at the Subic Bay and Clark Field bases which support the United States presence throughout our region. I believe it is essential for the maintenance of peace and security of South East Asia that the Philippines remain a member of the Western alliance and committed to the continuation of its existing defence co-operation with the United States of America. Above all, if the Philippines were to follow the path of a non-aligned foreign policy, or were to barter security concerns for Soviet economic aid and trade concessions, the strategic balance would be altered to an alarming degree in favour of the Soviet Union resulting in a detriment to the West and the Association of South East Asian Nations to a degree unmatched since the height of the Cold War. I now refer to Australia's relationship with Papua New Guinea. The mainland of our nearest neighbour, Papua New Guinea, is 160 kilometres from the Australian mainland. The 1987 defence White Paper observes in paragraph 2.53: Australia would be understandably concerned should a hostile power gain lodgment or control in Papua New Guinea. I suggest to honourable members that such a hostile act against our nearest neighbour would be treated as a grave security threat to Australia, probably requiring an immediate military response from Australia. Nevertheless, it would be a fundamental mistake and against the interests of both Australia and Papua New Guinea if they were to conclude a formal defence treaty similar to the North Atlantic Treaty Organisation treaty documents which refer to an attack on one party as being an attack on all. The interests of Australia, Indonesia and Papua New Guinea are better served with a co-operative approach towards matters of mutual concern. The program outlined in the 1987 defence White Paper can be afforded even without real growth in the defence budget overall. Sound defence planning should be based on realistic budget parameters. To achieve the levels of capability and priorities reflected in the paper, there is a need, over the life of the program, for an allocation of resources within the order of 2.6 per cent to 3 per cent of gross domestic product. I believe that the strategic concepts and defence posture outlined in the 1987 defence White Paper reflect the realities of the current situation. The Fraser Liberal-National Party Government lamentably failed to meet the goals of the 1976 defence White Paper. Bombast and rhetoric of the Liberal and National parties are no substitute for competence and preparedness in accomplishing the priority task of defending Australia. I conclude with the words of a great Australian, the present Minister for Foreign Affairs (Mr Hayden), in an address to the New South Wales branch of the Australian Institute of International Affairs, on 9 November 1981: I do not share the fear of conservative politicians that ordinary Australians will not face up to the reality. That fear is characteristic of the pessimistic view that successive conservative governments over the last 30 years have had of their fellow Australians. It is reflected in the way that they sell off Australian resources and Australian territory at bargain basement prices to foreigners whom they believe can do a better job than Australians in developing their own nation. I do not share their fear-I do not share their pessimism. I believe that Australians when honestly confronted with the reality that we have to rely on ourselves in many serious situations will, far from avoiding that responsibility, seek to embrace it. Australians do not want defence on the cheap-nor do they want to impose on their friends. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. Mr WHITE(McPherson)(8.55) —As the newly appointed shadow Minister for Defence, I welcome the opportunity to enter this debate on the defence White Paper. I see my old sparring partner, the Minister for Sport, Recreation and Tourism (Mr John Brown), seated at the table and I wish him well in his efforts to develop the tourist industry. Mr Downer —He is the Minister Assisting the Minister for Defence. Mr WHITE —Yes, but he is also the Minister for Sport, Recreation and Tourism, as we all know. I wish him well in developing the tourist industry in this country. He knows that he will get the support of honourable members on this side of the House if he does the right thing. I also congratulate the honourable member for Herbert (Mr Lindsay), who has just spoken, on his speech. I know that he is firmly in support of more efficient defence forces with a better capacity. For many years the defence debate in this country has not exactly been characterised by a high profile, and I think that that is a great pity. There is no doubt that the rot set in at the conclusion of the Vietnam War. I say without equivocation that the Government, as it is now, has a lot to answer for in regard to its attitude during those final days of the Vietnam War and its attitude to defence. I well remember Dr Cairns, who I think was Treasurer at one stage, actively encouraging the Vietnamese at a time when we had troops in Vietnam. No one who served at that time will ever forget what amounted in many people's eyes to be an act of treason when our own troops were serving and giving their lives in Vietnam. I certainly will never forget it and I will never forgive. I think most people who have an interest in defence would welcome the general thrust of the White Paper. It seems to me that, after four years of this Government, it has determined the direction in which we in this country wish to move. I think that generally that statement would be supported by honourable members on both sides of the House. It is appropriate to thank Paul Dibb for the work he did in the lead up to the White Paper. There is no doubt that, although not all his recommendations were accepted-thank God-he put a lot of work and a lot of intelligent thought into the development of his report which focused people's attention on defence. It is with some relief and a great deal of satisfaction that we see the White Paper, which followed the Dibb Review of Australia's Defence Capabilities, rejecting a lot of the recommendations he made. I think the White Paper came forward with a more realistic assessment of the defence needs of this country. There is no doubt that Mr Dibb raised the level of the debate on defence in this country. The White Paper puts a lot of stress on self-reliance and I very much hope that the Government is serious. Of course, Australia needs a capacity to look after itself at a low level of threat-a capacity which has been absent for many years. We have never really fought a war on our own; we have always fought in conjunction with someone else. We have to make sure that that self-reliance is inherent in our defence forces, not only in our fighting arms but also in the support that we are able to provide. That also means not just being able to defend Australia but also being able to reach out, if required, to help our friends and allies in this part of the world. The thing that concerned most of us about the Dibb report is that it suggests we sit back and do nothing about things that may be happening in our region, whether in Papua New Guinea, Vanuatu, any of the Pacific nations, or any country allied to us. The question is: Having reached the conclusion that we must now be able to reach out in that effort to defend ourselves, do we have the capacity to do so? The answer is no. It seems to me that there are two fatal flaws in the White Paper. The first is that it depends very much on a high level of funding to provide the equipment and that self-reliance that is so inherent in the White Paper, and the second is the almost total lack of emphasis on the personnel who make our defence forces work. People are very concerned-certainly I am-about threats in next week's mini-Budget to enabling the White Paper plan to be put into effect. If the funds are not forthcoming, all the promises and plans spoken about by the Minister for Defence (Mr Beazley) two or three weeks ago will come to nought. One of the things that concerns me most about defence is the high rate of resignation, and in some cases the low morale, of the personnel in the defence forces. It is disappointing that in the tabling of the White Paper and in the Minister's speech there is hardly any mention of personnel. There seems to be an obsession with equipment, but all the equipment in the world will make no difference if there are not trained, efficient and keen personnel to man it. The problem is in recent years people in the Services have been seen as second-class citizens. When one looks at the Government's attempts to oppose any pay rise, at housing and at some of the other conditions of service, it is no wonder service personnel have said: `If the country does not want us, if we are not required here, we will go and do something useful'. Servicemen and women by nature, by the very fact that they have joined the Services, are active people. If their talents are not employed properly they will go. In recent years the position of the Services in the community has been eroded. We live in a competitive world and, if those talents are not being put to use, the personnel will go. I would very much like to see the Government lifting the position of personnel in the defence forces from what many consider to be a second-class position into a first-class position. The personnel should be told: `We need you. You are absolutely essential to the security of this country, and we will look after you'. The hangover from the Vietnam days, when people were described as hired killers-and I have been so described in this place by a member of the Government-and the sorts of ridiculous attitudes which prevailed must be put to one side. All the great welfare programs, which the Government puts forward and which we all want to see if there is enough money, will come to nought unless we can provide security for our country. Bearing arms in the defence of one's country is an honourable profession. I want young men and women who are considering a career to think about going into the armed forces as they would consider being a solicitor, an accountant or anything else. It is an honourable profession and it must be restored to a position of pre-eminence in this country. I am also very much concerned about the loss of authority suffered by Australia in recent years in the region in which we live. This has happened because we have made it clear to our neighbouring friends and allies that we have withdrawn into our shell. Generally speaking, if one goes to our north or to the Pacific states and says that we are there if we are wanted, the people in those places will laugh at us because they know that we do not have the capacity or the will to reach out and do the job. That is a situation that we will have to reverse. We must make it quite clear to our friends and allies that we are prepared not only to defend ourselves but also, in our own interests, to reach out and assist them. One does not have to be too bright to realise some of the threats that exist in our area. If there is one thing that is sure in a very uncertain world it is that in defence matters it is the unexpected that will take place. Who would have thought a few months ago that we would see the Minister for Foreign Affairs (Mr Hayden) leaving Australia in the middle of the night, because of the urgency of the situation, to consult the New Zealand Prime Minister over the Libyan threat? Anyone who thinks that it is not a real threat is deluding himself. One has only to look at a map to see how far Vanuatu is from the coast of Australia. It is about the same distance from Australia as Norfolk Island is. Anyone who thinks that, if the Libyans were to establish a firm base in Vanuatu they would not cause us problems or cause problems to Papua New Guinea or to other Pacific states, is very foolish indeed. In addition, we have had the growing Russian influence based in Vietnam spreading quietly, slowly and surely throughout the Pacific, perhaps into Papua New Guinea, perhaps into Fiji, certainly into Kiribati recently and who knows into what other states? Mr Lindsay —And into Vanuatu. Mr WHITE —And into Vanuatu. No one is crying `Wolf', but we can be very sure that, unless we are prepared, we will in due course suffer the consequences of our own neglect. In the few minutes of this debate remaining to me, I wish to touch on one or two other matters. It concerns me very much that, despite the plans inherent in the White Paper, we are not seeing sufficient resources put into our capacity to meet a low level threat. Our task force in Townsville is almost moribund. It has no real mobility, no capacity to stay in the field for a long time. If, for example, it had to be deployed to Papua New Guinea, it would have great difficulty not only in deploying but in staying there for any length of time. If we are talking about a low level threat to this country as a most likely contingency, it seems to me that that is an area which has been very much neglected. One of the great weaknesses of this White Paper is that it is based on what will happen in the future. It is based on new helicopters and on new over-the-horizon radar. It is based on new airborne radar, in-flight refuelling, new frigates, new developments in the north, new bases in the west, mobility for our Army and, not the least, new submarines. The plan is good, but it is not there-and it will not be there unless the will and resources are put behind it. We shall all look with great interest to see what happens to defence next week because if the resources are not made available, if the defence forward estimates are cut back next week, one can say that the whole White Paper will be in default. In conclusion, I wish to mention the submarine program. I understand that the submarine decision will be taken to Cabinet next week. There are very few of us in this Parliament who can make a technical assessment of those submarines. I am very concerned that we have not stipulated a proven design. Whatever decision is made, the design, whether it is Swedish or German, will be new. I very much doubt whether Australia has the resources to accept a new design which is so untried and unproven. If the decision is for a Swedish design and a Swedish boat, I would very much like to know what guarantees we have that the provision of the resources from Sweden will be guaranteed. Some of us remember that, when Sweden disagreed with our involvement in Vietnam, it decided that it would not provide the resources. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. Ms MAYER(Chisholm)(9.10) —I listened with interest to the honourable member for McPherson (Mr White) who made some very sound and sensible points, and so he should given his experience. But I would like to remind him of just one or two things. One matter he mentioned that was not appropriate for the armed forces at the moment, or it was not a factor which encouraged people to stay there, was the rates of pay. It is true that in 1982 the armed forces had a wage freeze for a year. This was rather more than was suffered by the rest of the work force because, fortunately, the Government changed in 1983. The wage freeze was not a very good idea; it was not a very good thing to do. It pointed out very clearly that the previous Government allowed the rates of pay for the armed forces to be virtually at the whim of the Minister for Defence and open to all kinds of political and short term budgetary considerations rather than the sort of procedure which goes on now. Now a Defence Force advocate puts the case for Defence Force pay and the Defence Force Remuneration Tribunal meets regularly, and not when asked by the Minister, to determine pay and conditions for the armed forces. If the honourable member is of the belief that rates of pay and conditions have decreased under this Government, he needs to look at their history. The subject in the White Paper I wish to address tonight is basically contained in chapter 6 which deals with defence industries. The policy information paper-the White Paper-provides in chapter 6 a very good discussion of defence industry policy which, for the first time in many years, gives Australian industry a chance to place its contribution to defence. The paper draws together the many strands of activities in the defence equipment area, firmly places defence effort in its proper context in industry and points the way ahead for industry participation. The opportunities for industry can come from a number of possible areas. The first is the design, development and production of a unique Australian piece of equipment, and for that we might look at the over-the-horizon radar. It was designed in Australia, was developed here and is able to be produced here. It is uniquely Australian and uniquely suited to our particular geographic and defence needs. The second way in which industry can participate is through joint design, development and production projects. There have been a number of those and there will be more in the future. The third way in which industry can participate is in the development for Australian needs of an existing design with local production. That basically is what the submarine project began as. Although the honourable member for McPherson expressed his uneasiness about using a design which has not gone through a full development phase, I remind him that when the FA18 was chosen it, too, was an unproven design. Given that it is flying in our Defence Force now and it will continue to do so for some years, that is not a very serious problem providing that people examine the project and that they know what they are doing. In the case of the submarine I suggest that they do. The fourth way in which industry can contribute and which is described in this paper is by the production, under contract, of fully developed equipment. That is what we are doing with the FA18 parts. The fifth way in which industry can contribute is through the maintenance and replacement of parts for existing equipment. This is a very important contribution Australian industry can make, both to locally developed and produced equipment as well as that which is brought from overseas. The sixth way in which industry can contribute is through offset opportunities, particularly those offering the transfer of technology. Incidentally, none of these instances requires a specific defence factory working only on defence equipment. All of them offer opportunities for Australian industries to develop and to improve performance and export capability. In the past industry association with defence has proceeded very much on a stop-go basis, making it extraordinarily difficult for industries to become associated with defence projects. Previous governments have set up factories, provided them with equipment to fulfil a finite contract and then left them to their own devices. Management of those factories was not set up in such a way as to allow them to operate on a commercial basis and they were prevented from making proper commercial use of taxpayer-provided facilities. So we ended up with some of the best equipped and most unprofitable enterprises in Australia, at enormous cost to the taxpayer and at enormous cost to the morale of the highly skilled people working there who from time to time found themselves with no work to do. Chapter 6.4 of the White Paper states: While a substantial commercial work load can provide a base from which to bid for defence orders, the inverse is rarely true. The peacetime requirements of the ADF are usually too small and, particularly for the acquisition of new equipment, too infrequent and too limited in duration, to provide a viable long term base work load for individual firms or industry sectors. That is an analysis which we have needed for a very long time and is one which this Government takes extremely seriously. Chapter 6.14 states: It is the policy of this Government to encourage the widest possible cost-effective involvement of Australian industry in defence work. Such involvement in peacetime can establish the involvement and familiarity with defence requirements essential to timely escalation in contingencies. Just to give an illustration of the difficulties that have been encountered, in a 1982 report on the Government Aircraft Factories, the Joint Committee of Public Accounts observed: Under current arrangements, GAF lacks the autonomy and flexibility normally required by a large commercial undertaking. The Committee stated: Throughout this Inquiry we have touched upon a number of areas which, in our opinion have resulted in GAF being at a considerable disadvantage relative to its competitiors. It is the Committee's belief that an organisation such as GAF which has, by the nature of its role, to operate in a commercial environment, should have the same unrestricted flexibility and autonomy as has its competitors. Similarly, the Committee believes that the number of the accounting problems at GAF must reduce if it were subject to the same cash-flow/ profit making incentives as a private corporation. Regarding the Department of Finance minute response to that report, the Committee stated: The Government Aircraft Factories must move towards being more commercially viable while at the same time maintaining an identified commitment to Defence requirements for which an appropriate level of subsidisation should continue. The Committee also recommended that the Government Aircraft Factories should become a statutory authority to give them some kind of chance of operating at high technical capacity and, with the very expensive equipment they have, operating on some sort of commercial basis. The Minister for Defence (Mr Beazley) decided against a statutory authority and chose instead to make GAF a commercial company wholly owned by the Government. In making this change the Government has recognised the need for stability in the skilled work force, proper accounting and financial management and management procedures and the need to make sensible use of specialist facilities in a way which avoids long periods of idleness. That is extremely important because nothing de-skills a skilled work force more than long periods of idleness. Although defence needs cannot really provide for the substantial work load basis mentioned in the White Paper, it is true that many defence projects to which Australian industry can contribute are of a nature which brings leading edge-type technology to industry and which also demand high levels of management and quality control. In the past, and even now, some industries regard quality control of the necessary level as being a costly, time-consuming imposition on their operations instead of seeing what good quality control really brings-a cost effective way of ensuring higher productivity and greater reliability of products. It is depressing to hear of firms refusing to become involved in defence contracts because of quality control requirements. I direct the attention of those firms to chapter 6 of this policy information paper which described quite explicitly the benefits that involvement in providing for our defence forces can bring. The chapter provides a sensible answer to the problem of whether the nation should support factories dedicated specifically to the production of defence items or choose, through a number of means, to have a capacity in Australian industry generally to service the needs of our defence equipment policy. The point made in this paper, quite properly, is that some items will continue to be procured overseas as design development and production costs will be insupportably large. That does not mean that Australian industry will be confined to assembly or low technology projects; rather, that self-reliance means, among other things, Australia's ability to participate in designing and supplying defence equipment, to develop new technologies, to increase work force skills, and to introduce new machinery. The industrial needs of our defence policy have the potential to add to our export capacities and to support improvement in our industrial performance. Nobody could argue that that is not very greatly needed. Changes and improvements made by this Government to the offsets program, giving emphasis to technology transfer and improving access to information and advice, have also provided significant opportunities for industry to upgrade profitable activities. I would like to mention in the last few minutes some of the things which are going on at the moment to improve the situation of the personnel of the defence forces. I think I have made it plain previously in the House that I do not believe that the exemption of combat-related duties for women in the defence forces was really very much of a forward move, or was not even a standing still move. It seems to me to have been a backward move in many ways. I hope that in the future more common sense will prevail in that area. In the meantime it is very good to see that so many positions have been opened to women. I am particularly proud of the fact that we are training four women pilots this year, with more to come. I would like to refer to the findings of the Hamilton report-the Review of Effect of Service Life on Spouses. It is all very well to talk with some pride about the personnel of our armed forces, to point to their technical capacity, which is very high; the level of their training, which is good; and the efficiency of their performance, which is outstanding. But if one looks at the conditions under which those people have worked for so many years, one gets a very different picture. One sergeant said to me: `It is not very good for your morale when you go home and find your wife crying every day because of the revolting state of the house in which she is living'. That has not happened in the last four years. It is a product of years and years of neglect, of not regarding housing as a priority for our defence personnel and of not considering the education needs of their children. (Quorum formed) Mr DEPUTY SPEAKER(Mr Mildren) —Order! The honourable member's time has expired. I call the honourable member for Mayo. Mr DOWNER(Mayo)(9.25) —Thank you, Mr Deputy Speaker. Government members interjecting- Mr DOWNER —When I can have a little silence, let me say how pleased I am to have such a large audience from the Australian Labor Party, which so seldom inhabits the benches on the Government side of the House. It gives me the opportunity to tell people on the other side of the House that the Liberal Party of Australia has three very great objectives. Those objectives are to enhance the prosperity of all Australians, to build the individual freedom of all Australians, and to provide 16 million Australians with a secure nation. They are honourable objectives and they are fundamental to the philosophy and the policies of the Liberal Party. This defence White Paper is fundamental to those objectives because it is about the objective of giving our nation effective security. When one is looking at providing effective security to Australians, one must have a clear sense of direction, a clear idea of what one's security goals will be and how one will achieve them. In September 1976, in speaking to the national congress of the Returned Services League, Malcolm Fraser outlined precisely what the three arms of achieving a secure nation should be. Those three objectives were, first, that we should have a realistic diplomacy. We should have a foreign policy which builds relationships with our neighbours, which builds relationships with our allies, and does all that is possible to make sure that our region remains a peaceful region. The second security objective he identified was to ensure that our defence forces had a degree of self-reliance, that in the event of a great emergency we as Australians would be able to provide effective defence. The third objective he identified was that we should have the capacity to co-operate effectively with our allies, using the concept of collective security. It is by those three objectives, by those standards, that the Government's defence White Paper and its overall defence policies should be judged. I do not think on any of those counts that the record of the Hawke Government over the past four years stands up very well. I would say of this defence White Paper that perhaps this is one of the best things that the Government has brought forward in the context of those three objectives for enhancing and guaranteeing the security of Australia. Let us start with the first of those objectives-the need to have a clear and coherent foreign policy. This is one of the fundamental criticisms I have of the report of the Dibb Review of Australia's Defence Capabilities. Although much good work went into the Dibb report-and I congratulate Paul Dibb on the good job to some extent that he did-there is no question that it left as a vacuum the whole concept of having a clear and coherent foreign policy. Perhaps he did not feel that it fell sufficiently within his terms of reference. When one looks at the Government's foreign policy, frankly, one would have to say that the direction of that foreign policy is nothing short of obscure. It is obscure at a time when there is growing regional instability for all Australians. There has been much discussion recently about the instability of the Pacific region. We have had over the last few years the collapse of the ANZUS alliance and the move by New Zealand effectively to Finlandise itself and tear apart that important alliance with the United States of America. We have seen instability in the Philippines. We should still be concerned about the Philippines because instability there could lead to the expulsion of the Americans from Subic Bay and the Clark Field air base. There is a growing move towards non-alignment amongst many of the South Pacific island nations. That move exists in Vanuatu. We have seen signs of it in the Solomon Islands and since the recent election in Fiji, where the labor party was successful, there have also been expressions of support for bringing Fiji into the non-aligned movement and away from the Western alliance. We have reason to be concerned, as the Opposition has been pointing out for four years now, about the Soviet presence in the Pacific. In the middle of last year, Secretary General Gorbachev, in a speech in Vladivostok, outlined Soviet ambitions to become more involved in the Pacific region-and he has been true to his word. The Soviet Union has signed fishing agreements with countries such as Vanuatu and has tried to negotiate fishing agreements with islands such as Kiribati. The Soviets' largest base outside the Soviet Union is at Cam Ranh Bay in Vietnam and nobody doubts that the Soviet Union has the capacity to strike even as far as Australia from its base there. More recently, apart from the Soviet Union, we have seen the growing spectre of the extraordinary and quixotic Colonel Gaddafi also becoming involved in the affairs of our region. That is of particular concern in both Vanuatu and New Caledonia. The situation in New Caledonia is extremely tense and delicate. There is a conflict fundamentally between two communities which will be extraordinarily difficult to resolve. That island is close to Australia. The difficulty of that resolution will bear heavily on Australia and will have some impact, let us face it, on Australia's security concerns. So the whole problem of ensuring a secure region is growing for Australia. It makes a mockery of the projections made during the period of the Whitlam Government that we could be sure there would be no security problems for Australia over a certain period-I think the figure was 15 years. It also makes a mockery of the same sort of analysis made in the report by Dibb who said that Australia could be sure of complete security over the next 10 years. Who even six months ago would have expected the Libyan problem to emerge in our region? Who would have expected the sudden Soviet encroachment into our region when, three or four years ago, the ANZUS alliance was strong and the Western alliance-Western nations generally-in co-operation with its Pacific and island allies could pursue a policy of strategic denial? Who would have thought that our region would be a major matter of concern in the way it is today, only four years ago when the Hawke Government assumed office? It has to be admitted that even in South East Asia Australia's relations are not as close as they could be. We have the enduring problem of Indo-China, with Vietnamese domination of Cambodia and the Australian Government attempting to play some sort of honest broker role between the Government in exile of Cambodia and the Government of occupation, the Vietnamese Government. That honest broker role was ill-advised and led to a breakdown in the relationship between the Association of South East Asian Nations as a group, and Australia. The Fraser Government, over its seven and a half years in office, had built up an extraordinarily strong and close relationship which has been weakened primarily by this quixotic move by the Government to become involved in the affairs of Cambodia. So when we look at Australia's foreign policy we see clearly that we are confronted with difficulties and with a government without a clear sense of direction which is flailing around, wondering what to do, now that our region has become more insecure. When it comes to self-reliance, the second objective in building our security, it has to be said that in the defence White Paper the Government strongly addresses that and the Opposition supports much of what the Government has said as far as the building up of our defence forces is concerned. Australia must have a proper defence capacity. We must continue to acquire new, modern and up to date equipment. We must have properly trained troops to use that equipment and to have the mobility and expertise to deal with any contingency which could arise at any time. Certainly this was part of the philosophy of the Fraser Government which invested a great deal of money and time in acquiring effective modern equipment. It acquired the FFG frigates, the Leopard tanks, the new generation of Orion aircraft and made the decisions to acquire the FA18 tactical fighter aircraft-and it did more than that. That Government recognised the need for Australian defence to concentrate more on the northern part of our country. For example, it created the now operating Tindal air base in the Northern Territory and established the northern task force. This Government has carried on the work of the Fraser Government. My only concern is that in the mini-Budget coming up next week, defence and defence procurement will be one of the major victims. I read today in a newspaper that the Government has decided to cut $1 billion out of the defence budget. I hope that that does not happen, particularly at a time when our foreign policy is incoherent and our regional concerns, rightly, are growing every day. The third aspect of security policy must be to have strong co-operation with allies. It is on this point that the Government, since it came to power, has always been lacking. This defence White Paper still does not emphasise this objective strongly enough. We are a small country by the standards of the world. We have a relatively small economy by world standards and that means that we have a limited economic and human capacity to provide ourselves with the strongest Defence Force that money can buy. We therefore must involve ourselves in collective security. This is well recognised by comparable countries in Europe which have worked together so effectively within the North Atlantic Treaty Organisation alliance since the end of the 1940s. We have worked effectively in the ANZUS alliance since a very few years after the creation of NATO. It is the ANZUS alliance which created for so many years strategic denial in our region and the security, particularly in the Pacific, which we enjoyed. We have also been fortunate to have the Five-Power Defence Arrangement, one of the unsung heroes of Australian security, which was built on by the Fraser Government. It still exists and still contributes to the concept of collective security. Australia is part of the Western security effort. We should be proud to be part of it and should promote our participation in the Western security effort. That, of course, means maintaining close ties with the United States of America. Some people on the other side of the House and in the so-called peace movement who promote what is called moral equivalence say that the Soviet Union is bad and that the United States is equally bad. That is a dangerous concept that undermines Australia's security because it reduces community support for the concept of collective security with the United States. We in Australia do need to support the United States and to play our part in the Western security effort. We need the joint facilities at North-West Cape and Pine Gap to help the United States with its verification procedures to make disarmament agreements meaningful and constructive. We need to help the United States with joint facilities so that the United States in particular can communicate with its defence forces in this part of the world. Otherwise, the effectiveness of its defence forces will only be weakened and we will be the losers if that happens. In other words, we have to recognise that we are part of an alliance, part of a co-operative effort. That means that we must readily accept visits by American ships, and by British ships as well; not concern ourselves with what armaments those ships have, but recognise the enormous advantage of having visits by those countries and the involvement, particularly of the United States, in the security of this region. It is these visits by ships and these joint facilities which are threatened by the proponents of moral equivalence and by what is sometimes described, I believe quite euphemistically, as the peace movement. The peace movement threatens to unravel our security by unravelling that third part of security-co-operation with allies and collective security. It is important that the Government stand up to the so-called peace movement and emphasise that it does not support the arguments of moral equivalence. In conclusion, the Government has three targets if it is to ensure a proper security policy. That is only partially addressed in the White Paper. It must have a clearer foreign policy, it must have a proper capacity for effective self-reliance and it must continue to build and work on strong alliances, particularly with the United States of America. Mr PRICE(Chifley)(9.40) —Some might argue that the honourable member for Mayo (Mr Downer) is very expert on defence matters, given his witnessing HMS Pinafore on a number of occasions. I rise in the debate on the defence White Paper not so much to speak on matters directly in the White Paper but to offer some personal observations about defence procurement, particularly about automatic data processing matters. In the 254th report of the Joint Committee on Public Accounts we tabled a report about Project DESINE-Defence EDP Systems Integrated Network Environment-and the Minister for Defence (Mr Beazley) responded to that at a later date. I wish to make a few observations about his statement, which was brief in the extreme. I was disappointed by its lack of detail and about his failure to comment on the Committee's report in that statement. Project DESINE, which involves three quite separate proposals, is a decentralisation and standardisation strategy for administrative computing systems in the Department of Defence. The first proposal involves purchases of supply and manpower systems redevelopment equipment worth about $60m. A separate procurement for office computing of about $6m is proposed. It is fair enough to say that the Minister has accepted some of the recommendations. In his statement he said that the Committee had recommended that the computer requirements of the Office of Defence Production should be tendered for separately from those of the rest of the Department. He said: This is accepted and action is in hand. I must say that I am pleased to see that he accepted that recommendation. He went on: It is also recommended that a separate contract for small systems be not proceeded with. That recommendation too is accepted. I should point out the reasons why the Committee suggested that this should not be proceeded with. That Defence Department proposal constituted a sop to Australian industry. I am sure my learned colleague, the honourable member for Hinkler (Mr Conquest), who was a very active member of the Public Accounts Committee, would agree with me. It was very disappointing when the Minister suggested that he would accept the recommendation but did not go on to elaborate the detail of it. I am pleased to see, however, that he recognised the veracity of the Committee's decision in that respect. He went on to say that he accepted the concern for providing Australian industry with opportunities and that he accepted the recommendation-that the prime contractor for Project DESINE could be an Australian company. I note that when the computer Press was writing up the tender for the new Parliament House computer contracts, it heralded as a major breakthrough the fact that for the first time an Australian company was to be the prime contractor. That project was worth some $25m. I am sure the House will understand that this defence contract is worth considerably more and I certainly hope that in the tendering process an Australian company is given that opportunity. Perhaps the most major aspect of the Committee's recommendations was that the tenders for DESINE should be staged. This recommendation was rejected. I regret that in the Minister's statement he suggested no reason why that recommendation should be rejected. However, he pointed to a concern that he shared with the Committee about Australian industry participation and suggested that, within the liaison between himself, the Minister for Industry, Technology and Commerce (Senator Button) and the Minister for Local Government and Administrative Services (Mr Uren), these concerns could be met. The Committee's recommendation was made for a couple of reasons. First, it is true that there is a slight degree of risk in the way the Department is approaching this contract. I concede that it is a minimal risk, but the Committee was concerned about it. If one looks at the history of defence computing in the 1960s one sees that the Defence Department selected FACT as a fact compiler. At the time it was a very good technical choice, but tragically COBOL became the more widely used program. The Department of Defence was stuck with maintaining a system which had little use and a very small user data base. Consequently, it was prohibitive. The Committee's recommendation about staging addressed the issue of risk and the issue of Defence Department history. Secondly, it was felt that, by staging the project and proving up the system, we could minimise the risk and dramatically increase the possibilities of Australian industry participation in the hardware particularly as well as in software, terminals and other such equipment. Given the fact that the Government, through the Minister for Industry, Technology and Commerce, will shortly bring down a paper on the information industry, the fact that the Public Accounts Committee itself has brought down a significant report about offsets and the fact that the Government is looking at government purchasing through the Inglis committee which, incidentally, seems to have picked up the thrust of our Committee's report and has recommended a more generalised approach to two-stage tendering, it is a pity that the Minister's statement is so brief. I am sure that other members would agree with me. I want to allay the fears of honourable members and those of members of the Committee who may share my concern by pointing out that the Committee will have an opportunity to respond formally to the Minister's statement. (Quorum formed). I thank the honourable member for Indi (Mr Ewen Cameron) for providing such a distinguished audience of my colleagues and peers. I was advising the House that, at a time when the Government is about to release a paper on the information industry, when the Government has received a report on the Inglis inquiry that is looking at high technology purchases by the Government and when, indeed, the Public Accounts Committee has presented a report on offsets, I find it disappointing that the Minister has rejected, with so little explanation, a major recommendation of the Committee. It clearly affects Australian industry and its ability to compete successfully for this tender. I was saying to the House that when the opportunity arises we will respond to the statement made by the Minister and the Government's response to our report. I look forward to that opportunity. I look forward to discussing with the Minister's officers from the Defence Department some of the reasoning behind the statement that has been made and to obtaining in evidence further information to assist the Committee to come to agreement with the Minister in his rejection of the recommendation. I certainly thank the House for the opportunity to make these personal comments. I congratulate the Minister for Defence on his successful handling of his portfolio. I am sure that, when we look at the overall sweep and breadth of the Minister's contribution to our nation's future and its defence, he will be remembered as being one of the most successful Labor Defence Ministers that this country has ever had. Mr CONQUEST(Hinkler)(9.52) —No matter how much might be said in this debate in regard to the rumoured cuts in national defence expenditure, I think that we would all recognise that, ultimately, it will be the electorate which will make the final decision in this matter. It is therefore of paramount importance for the Government-all governments in fact-to educate Australians about defence strategy. The Dibb report, this White Paper, and the accompanying debate provide an ideal opportunity to highlight defence issues in a very useful and practicable way. In World War I and World War II we had sufficient time to mobilise and train our armed forces for war. Notwithstanding my tender years at that time, I know that many of our servicemen were training at the Brisbane Showground in the suits that they were wearing when they enlisted and in fact using broomsticks in that training. However, I do not think that we will see such things occurring again. Nevertheless, many ill-informed and uninformed people still imagine that while there is no obvious threat the Government should spend only a little amount on defence. Those people believe that when a need arises an instant Defence Force can be raised. Of course, that is nonsense, and it is up to us elected representatives of the people to inform the nation of the need to be prepared. An appropriate strategy is necessary to ensure peace in our neighbourhood. It should be remembered that there is a big difference between being a peaceful nation and being a pacifist nation. Our ability to predict a threat of invasion with sufficient confidence for a 10-year period has been accepted as holy writ. This is a mistake, as it assumes a stable rate of change in any potential sequence of events. However, this can be upset by revolutionary and unpredictable change. One has only to recall the near success of the Communist Party of Indonesia or to imagine the overthrow of the Marcos regime by the New People's Army-and that was not beyond the realms of probability. A new regime, armed by the Soviet Union, could well make the 10-year buffer look highly optimistic. In fact, it might be more realistic to plan on a warning time of half that period. The sin of `situating the appreciation'-making facts fit conclusions-was a major criticism of Dibb's review. The Minister for Defence (Mr Beazley) is yet to receive total absolution, though he has moved away from Dibb in important areas. The period since the end of the Vietnam War has been traumatic for defence policy makers. The political convulsions of some of our leaders have left a sour taste in the mouths of many, which is manifested in a variety of ways, all inimical to re-establishing a sense of national purpose. This has been further compounded by the anti-nuclear campaign, which has attracted an amorphous lot of supporters. This collective group is basically anti-American and promotes the idea of moral equivalence between the United States and the Union of Soviet Socialist Republics, which is enunciated in order to bring about a unilaterally neutralist Australia. It may be true to say that, while war has become obsolete as an instrument of policy, the tools of war must continue to play a role in keeping the peace. When each side holds an equally good hand, a potential aggressor is likely to keep both his hands on the table. Short of changing human nature, the only way to achieve a practical, livable peace in a world of competing nations is to take the profit out of war. There are those who impede the peacemakers. A few, with their allegiances and their motives clear, do so intentionally. However, those who do so inadvertently are far more dangerous. Lenin-may I quote him-contemptuously called them `the useful idiots'. More out of ignorance than by design `the useful idiots' earnestly propose ridiculously simplistic answers to our most complex problems. It is our responsibility to ensure that we avoid simplistic solutions that are not in our own best interest. We must come up with a defence policy which is appropriate to the needs of Australia. The efforts of the Defence Minister in this regard must be applauded. Now is not the time to attempt to score political points on such an important issue as this. It is a time for political leadership and time to consider seriously the issues of national security. National security responsibilities and challenges are awesome and it is essential that our limited resources are utilised efficiently and effectively. Strategic realities are forced to fit political needs and the chance of implementing the proposals contained in the White Paper are dependent on adequate funding. Unfortunately, defence spending can be tailored towards the need for economising resources rather than the basis of a national security policy. I hope that the Expenditure Review Committee recognises this. This strategy depends on acquisitions for the force multiplier effect to work. If we don't go ahead with in-flight refuelling, our FA18s are limited to punching holes in the sky within a limited radius of their base. On the question of fitting out the 707s with a conversion pack of the probe drogue type to suit the Hornets, we do so at the expense of providing our F111s with a similar capability because of their requirement for the boom type facility. If we are to participate in regional exercises, it would appear that the latter arrangement, suited to our F111 requirements, would also be suitable for the replacement F16s that some of our regional neighbours are acquiring and it could be a considered option. I do, however, recognise that the strike role of our aircraft could be a sensitive issue in the region and make such a course of action less preferable. Also, if we do not obtain an airborne early warning platform to complement the over the horizon radar, the effectiveness of a layered defence strategy would be impaired, given the threat imposed by airborne launched cruise missiles. The force multiplier effect must be utilised if we are to gain the maximum benefits from the Minister's defence plan. The White Paper acknowledges that the co-operation of Australia and the United States is important to basic elements of an effective and efficient system of Australian defence. Its co-operation appears to be presumed on the basis of our provision of facilities. However, the reluctance of this Government to meet American requests for co-operation, whether for training facilities, MX missile trials or participation in strategic defence initiative research, must make the spirit of co-operation appear somewhat skewed in our favour. The co-operation spin-offs-access to technology, logistic support and intelligence-underpin the affordability of our proposed self-reliant defence capability. My concern is that our level of co-operation may become so one sided that the United States may regard us as less than reliable and withdraw some or all of the benefits we receive from it. The concept of defence in depth, of layers, on which an aggressor would founder, is an approach which seems to accept the inevitability of attack and sets about dealing with it after it occurs. Is there a real sense of commitment to keeping potential attackers at a distance? Do we sit and wait for the attack and, while it is being planned, contest nothing? The first layer is designed to provide us with the intelligence-the information of the potential aggressor's intentions-and a variety of surveillance capabilities to detect and track the hostile intruders in our maritime and air approaches. We also have proposals to develop a national system of air defence and airspace control. In other words, we can find out what they are going to do and know when they are coming. The second layer is a naval air capability to destroy attacking forces in our approaches. For higher levels of conflicts, it means having forces able to strike at an adversary's bases and able to interdict his lines of supply. For these higher levels of conflict, we should have 10 years of accumulated intelligence on which to base our assessments. For some reason we seem to be saying we have and will use our second layer defence to strike at bases and interdict his lines of supply when we have entered into a `higher level of conflict' phase. The question I asked before is: Do we sit and wait for the attack? Do we contest nothing during the planning phase? The best way to deter a potential aggressor is to show that we have the capability and the will to retaliate in a way that would be politically and militarily unacceptable to it. A defensive attitude could lead to a vast expenditure on such things as mine countermeasures, whereas we could outlay a small amount on mines to equip our vehicles, P3Cs and submarines and bottle up an enemy before it leaves its own shores. The mining of Haiphong Harbour towards the end of the Vietnam War perhaps provides an example of the effectiveness that this approach could have. However, the point I make is to use good intelligence to good effect and protect our national interests in the aggressor's front yard, or at least ensure that he knows that we can and will act there in any threat situation. The Israeli Air Force action in the early days of the Six-Day War provides a useful example of what I mean. Let us look at the third layer and the development of a `Highly Mobile Army' or a `flexible ground force'. Does this mean that all Army units and their equipment should be air portable? Has any assessment been carried out as to whether the Royal Australian Air Force and civil aircraft have the capability to move and supply significant forces into the north? Would armour and artillery be left behind in a rapid redeployment situation? The Minister says the five-power defence arrangements remain relevant to our defence policy objectives; yet the role of Australia as a contributor to the arrangements is diminishing. Withdrawal of forces is the order of the day, which effectively serves notice on the region that we are placing a low priority on regional defence commitments. One might ask: What support is given to Thailand or the Philippines? The Asian Defence Journal reflected on this lack of engagement in the region in an editorial in mid-1983 in the following terms: More than ever, Australia needs to be reminded that insularity does not necessarily mean complete security. Refusal to be drawn into the rough and tumble of regional geopolitics is no guarantee for total safety, now or in the future. It is fair to say that the Government has bowed to the demands of the realpolitik, to a degree, and progressed from its original thinking of supporting the concept or a fortress Australia. I would emphasise the importance that Australia is seen to be supportive of our regional allies and fully participative in our alliances. There are many Australian interests within the region and, rather than declining in importance, they are in fact expanding, especially when viewed in juxtaposition with the increasing Soviet naval presence. Given our increasing participation in the area, we are in a position to try to influence events rather than react to the efforts of others. The skeleton of rhetoric must be given muscle or the ideal of deterrence will fail, and the consequences could be much more costly in both monetary and human terms. Our leaders have told us that there is no threat to Australia in the foreseeable future. How do they view the installation of long range Soviet forces in Vietnam, or the outside interference in countries such as Vanuatu, New Caledonia and Kiribati? These developments are of concern to us and demonstrate that the prime object of our foreign policy and our defence policy is national security and that the two policies must be co-ordinated. Australia is economically committed to the region and the maintenance of our living standards is dependent on regional trade. We are a regional force, and the nations in our region are our friends and we must be seen to be their friends, powerful friends, prepared to defend ourselves and the integrity of the region. In fact, the concept of deterrence is better translated into policy if it is designated to deter threats rather than conflicts. Convincing any would-be aggressor that a resort to force can and will be resisted will make that aggressor think twice and seek other options to achieve the desired aim. Deterrence for Australia should be dynamic, not merely the flexing of muscles or baring of teeth to the outside world. It should embody the collective strength of those within our region which would surely promote a happier, friendlier, co-operative region which would signal to any outside aggressor that our region will not tolerate any lawlessness. Besides building armed forces with the appropriate force structure, strategy and policy we must base deterrence on a perception of how, whether and when those forces will be used. A regional security strategy could be conceived and set in train by government to government understandings of a bilateral and/or multilateral nature, ensuring commitments from many countries. The Minister has stated that our defence self-reliance is set firmly within the framework of our alliances and regional associations, and it is encouraging to see that the support of our regional neighbours is recognised. To encourage, obtain and maintain that support, I repeat we must have appropriate foreign policies. Whilst the overall White Paper strategy is politically defensive, the Minister has said that it is not defensive in the more specific military sense. That being the case, I believe that we need to maintain an effective offensive defence force which can respond to threats to isolated territories such as the Cocos (Keeling) Islands and Christmas Island. As such, we need to be able to provide the capability to deploy such a force by air and by sea. However, any deployment of personnel and materials is dependent on the availability of appropriate transportation. A rapid deployment force to any area, either overseas or in Australia, has an even greater transport requirement. I have echoed my concern about this in other debates in this House. Unfortunately, our force projection is limited, especially since the loss of the carrier and the Fleet Air Arm, and the fleet air defence they formerly provided. Mr DEPUTY SPEAKER(Mr Millar) —Order! The honourable member's time has expired. Ms JAKOBSEN(Cowan)(10.07) —In speaking to the defence White Paper this evening, I wish to bring a slightly different perspective to it than that that has been put by the majority of my colleagues and also, respectfully, those members of the Opposition who have spoken to it. For instance, I wish to mention briefly the ANZUS pact and the significance of New Zealand's position vis-a-vis the United States of America as a result of its continued opposition to visits by nuclear armed or powered ships. Mr Barry Jones —You should be declaring your interest. Ms JAKOBSEN —I will declare my interest. The Minister for Science has indicated that I should declare my interest. I am of New Zealand origin. Obviously I am now a naturalised Australian. Mr O'Neil —We won't hold that against you. Ms JAKOBSEN —The honourable member for Grey is very tolerant. I am extremely pleased that Australia did not undertake approaches through economic or other pressure to overturn the stand that New Zealand had taken, as I believe that our best protection at any time is that of having independent neighbours that will stand up for their own rights. Indeed, it was interesting to hear the honourable member for Groom (Mr McVeigh) comment on the comparative size of New Zealand's population and that population's awareness of defence matters relating to its region and our region, which was unexpected when he visited that country recently. I put it to him that it is precisely because of its diminutive size that New Zealanders have that awareness. They cannot afford to ignore the world around them and must remain sensitive to the policies of neighbouring countries-including, of course, Australia. It was also interesting to hear the Leader of the National Party of Australia (Mr Sinclair) earlier in this debate-some days ago-upbraiding the Minister for Defence (Mr Beazley) and the Government over its attitude to New Zealand. Perhaps he needs to know that there are people in this country also who would like Australia to follow New Zealand's lead with regard to the visits of nuclear armed and/or powered ships. Likewise, there are people in this country who question the expenditure of large amounts of money on defence, and there are others who would advocate a more non-aligned defence for Australia. Many of these people fear that Australia's relationship with the United States of America is not a positive one. They are concerned that Australia is not an equal partner in the liaison and has no real say in the cut and thrust of America's activities in this region or elsewhere in the world. In short, they believe that we are not masters of our own destiny. Unfortunately these fears are fuelled by the existence and the mystery surrounding the so-called joint facilities. While I may have a different view from the Minister on the prospect of a self-reliant defence policy leading to neutrality in the longer term-and I am sure I do have a very different view from his-I congratulate him on this honest attempt, which the White Paper is, to assess Australia's defence needs within the framework of existing relationships. I am pleased to note the decision to disperse and diversify our defence forces and equipment more meaningfully, and I acknowledge the excellent work that he has done in honing down our defence expenditure to ensure greater value for money. That change was desperately needed. As the Minister himself has said: `People and equipment must be appropriately deployed to deal with Australia's perceived defence needs'. Many people in Western Australia will be pleased and relieved by the decision to develop a two-ocean navy policy and to expand the emphasis of defence in Western Australia. But others will be sorry, particularly given the prospect of a top secret Defence Signals Directorate satellite listening station being built in Western Australia to intercept signals from Soviet, Chinese and Indonesian satellites. There is already considerable concern in Western Australia that our involvement in the joint facilities predisposes an attack on Australia in any nuclear strike, no matter how limited. I believe that the campaign to take back North West Cape-which is well and truly on its way-will be heightened as a consequence of this decision. Even so, I acknowledge the need for a properly deployed Defence Force around Australia to offer protection to population centres in the unlikely event of hostilities utilising conventional weapons. No amount of appropriately placed defence equipment could save us should a nuclear strike occur. This defence policy is not the brainchild of a paranoid administration. It represents a realistic attempt to assess the possibility of specific types of threats to Australia's security, and as such I support it. The Government has carefully analysed the defence capabilities within our region, including those of the Soviet Union. Two important assessments emerge. The first is that no regional power has the capability to mount a major attack on Australia, with such an attack being defined as one involving the seizure and occupation of a substantial portion of our territory. The second is that the capability to mount smaller scale-but still serious-military operations against us already exists in our region. The Minister calls the military strategy behind the policy layered defence, or defence in depth, and this does differ from the Dibb report proposals to some extent. This strategy dictates that we develop an Australian Defence Force capable of meeting any hostile force within our area of direct military interest with successive layers of forces capable of detecting, identifying and engaging any hostile approach. The defence in depth strategy proposes three layers of defence made up of long range radar surveillance, aerial and naval patrols, and land forces. The White Paper also foreshadows a significant shift of regular and reserve forces to the north of Australia, while emphasising that no regional power has the capability to mount a major attack on Australia in the foreseeable future. It does not mean that Australia forswears offensive military operations in defence of its territory and interests, but I am sure that, as the Minister points out-and most members of this House would agree-we are fortunate in sharing a region with peace-loving nations. Debate interrupted. Madam SPEAKER —Order! It being 10.15 p.m., I propose the question: That the House do now adjourn. Mr SLIPPER(Fisher)(10.15) —Over the last two years a great deal of concern has been expressed by local residents over the lack of nursing home accommodation on Bribie Island, within the electorate of Fisher. Recently the new Federal Minister for Community Services (Mr Hurford) visited the island to examine the situation. Unfortunately it would appear that the Minister's visit will have little or no impact on the overall problem still facing our local senior citizens. His reported comment that the area is a priority to receive more care facilities is pleasing. However, under the Federal Government's current formula for nursing home bed approval, no additional beds are likely to be made available until the year 2000. Residents should be aware that the emphasis by the Federal Government on the home and community care program leaves a shortfall of places in nursing home accommodation. Hostel type accommodation is provided through the HACC program, and this is fine. However, it must be remembered that when people enter hostels they do not remain at the same age and will ultimately need nursing home care. In my speech to the House on this issue last year I outlined that people are passing away while on the waiting list to enter the Bribie Island retirement village. Of course, that village is run by the Churches of Christ. My predecessor as the member for Fisher, the honourable member for Fairfax (Mr Adermann), played a very substantial role in assisting that village in the past. In fact, a section of that village is named after the father of the honourable member for Fairfax, Sir Charles Adermann. At the time I addressed the House last year I said I believed this was a real tragedy. The tragedy is unfortunately an ongoing one as, despite the best efforts of a wide cross-section of Bribie Island community organisations and others, no action has been forthcoming from the Federal Government to rectify the situation. At the present time Bribie has only 30 beds for a population of over 1,000 persons over the age of 70 years. Because Bribie Island is included with the region of Caboolture for the purposes of of determining a nursing home bed ratio, the Department of Community Services believes the region as a whole `has a relatively high ratio of beds to aged persons over 70 years'. With the high percentage of senior citizens of Bribie it is clear that the area needs more nursing home facilities. The fact that the Bribie Island retirement village received approval for a 17-bed extension to the hostel in September last year in no way diminishes the need for further nursing home accommodation. People currently waiting for placement cannot be expected to understand the current Federal Labor Government's reluctance to take immediate steps to ensure that Bribie Island receives the facilities it deserves and indeed is entitled to. I firmly believe the new Minister should take immediate steps to resolve the current problems being experienced. As far as the people of Bribie are concerned, the present anomaly concerning the allocation of nursing home facilities is one that must ultimately-indeed as soon as possible-be corrected. There is little doubt that this problem will simply not go away. In fact, I am sure that residents will continue their strong fight to receive a fair allocation of nursing home beds. Local people-and, I might add, people of all political views-are involved in this struggle. They may be assured that I, in my capacity as member for Fisher, will continue to give this matter my strong support. People are entitled to Government help, and unfortunately to date this help has simply not been forthcoming. Following the Minister's recent visit, I hope that he will look sympathetically at the desperate need for additional nursing home facilities on Bribie Island. The people of Bribie are now looking to the Government to take the next step. The next move is up to the Federal Government and I certainly hope that that will be forthcoming in the very near future. Mr O'NEIL(Grey)(10.20) —As I have stated in this House on many previous occasions, the population of my electorate of Grey is dispersed over a large area-approximately 848,561 square kilometres, which is 86.2 per cent of South Australia. In that area there are several highly concentrated groups of constituents which are multicultural. I believe that we have a duty to foster multiculturalism in the Australian community. I also believe that we are already doing this in a number of ways, which includes the broadcasting of the Special Broadcasting Service's multicultural television network-SBS television. We have taken the initiative to preserve multiculturalism by electronic media. In fact, SBS television is a unique organisation in the Australian media and the world generally, given its specific dedication to the needs of the country's ethnic communities. Those honourable members who have been able to view SBS television will no doubt agree that it makes a special contribution to those who have a desire to retain links with their countries of origin. SBS television also assists those people in our community who are having difficulty in making the transition from a different culture into the Australian way of life. Whyalla, the town where I reside, is also the home of almost 30,000 people of some 65 different nationalities, and I am indeed proud to say that we live together quite harmoniously. Still in my elector- ate, on the other side of the Spencer Gulf, in the smaller city of my birth, Port Pirie, there is a high Italian and Greek population with other people of different cultural backgrounds also living in harmony. It is with this in mind and for all those people and the countless others in my electorate, including those with a purely cultural interest, that I speak today in support of any possible extensions of the SBS television network to regional centres, in particular to the Iron Triangle cities of my electorate. Because of the concentration of so many nationalities in comparison to the population size and dispersion it is perhaps fitting that people in my electorate should be able to enjoy the benefits of multicultural television. I have presented petitions to this Parliament and have made numerous representations on behalf of my constituents to the Minister for Communications (Mr Duffy) with suggestions that may have made the extension of the SBS network to my electorate possible. The Minister has been extremely co-operative in all instances but my representations have so far been unsuccessful. Budgetary constraints, which all sectors of the community must bear, make it impossible for any extensions in the near future. However, I wish to place on record on behalf of the people of Grey a request for high priority consideration should there be any forward projections for extending this television service to regional centres. We must bear in mind that this request is most definitely not selfish, as SBS television is not just for people of ethnic origin. This network caters for people of many origins. It has fulfilled, and continues to fulfil, extremely important educational functions, not only for the ethnic communities themselves but also for the Australian-born community which has learnt much from SBS programs about the rich cultural backgrounds and traditions of the more recently arrived Australians. The programs open a window to the rest of the world for all Australians. If each of us in this House were to assess individually his or her own viewing history there most certainly would be a consensus of opinion that we had been brought up on a diet of American and British offerings. It is interesting to note that SBS television current affairs programs often focus on topics that are ignored by other networks. Most importantly, it has been discovered that SBS television gives the most comprehensive world news coverage of any of the news services. Is it any wonder that my constituents are relentless in their attempts to obtain the broadcasting of this station to the electorate of Grey? They have my full support. The determining factors as to where we live-for example, employment-are not always considerate of our environment. This is apparent in my electorate. It is most obvious in the instance I am discussing, concerning people being able to view SBS television. The advantage of working and consequently living in metropolitan cities and the disadvantage of living in regional cities have become more pronounced for my constituents. In my electorate of Grey we need a far greater range of television viewing. With the takeovers of television stations which have been undertaken on a regular basis lately I hope that very soon we will be able to see Adelaide Channels 7, 9 and 10 clearly along with the SBS. I urge my colleagues to support me in my en- deavours to obtain this goal. Mr HODGMAN(Denison)(10.25) —At 5.20 a.m. on 25 April last I drove to my father's residence and picked him up, and together we drove to the Cenotaph in Hobart for the seventy-second commemoration of Anzac. In the cool morning with the dawn rising I looked around at the diggers, their wives and their families and thought about what Australia owed them and about their situation today. As my colleague the honourable member for Franklin (Mr Goodluck) will know, I thought later in the morning, during the Anzac march in which I was honoured to march with the Royal Australian Naval Reserve and the RANR cadets, about HMAS Huon and the various ex-service gatherings. I came home that evening saddened by the fact that we have failed to honour the pledge that we made to those then young men when they went away to defend this country in World War II. That great Prime Minister, John Curtin, and his equally great successor, Ben Chifley, cautioned the people of Australia never to forget the sacrifices that had been made that we might live in freedom. In the 1950s two great Australians on different sides of politics in this Parliament combined to see included in the repatriation legislation a burden of proof provision which was just and fair. Those two great Australians were Sir John Spicer and the late Dr H. V. Evatt. The burden of proof provision that between them they worked for and finally got inserted into the legislation stated that a veteran's entitlement would be accepted unless and until it was proved beyond reasonable doubt that there was no causal link between his or her service and the disability claimed. Following the Law case and the O'Brien case a fear was generated in the hearts of the people of the Department of the Treasury that the repatriation bill was going to explode out of all proportion, this Government moved to legislate to limit the opportunity for ex-service men and women to claim. It took away the burden of proof provision and reversed it and it has now, by virtue of the Veterans' Entitlements Act 1986, virtually abolished the totally and permanently incapacitated pension in this country for any man or woman who has now passed the age of 65. I have said on other occasions that the Hawke socialist Government has betrayed over 650,000 Australian ex-service men and women. Tonight let me say in charity that if what has been done to them was an accident now is the time for the Government to correct it. I have appeared as counsel, in an honorary capacity, for ex-service men and women, for their widows and for their dependants in over 30 Administrative Appeals Tribunal matters. As my colleague the honour- able member for Franklin will tell honourable members, on only two occasions have they been successful. The tragedy is that those who went in early and got the TPI benefit are all right but the ones who battled on despite their war wounds and said `We will keep going' have now been cut off cruelly. I urge the Government not to treat this as a laughing matter; It is a very serious matter. I have seen injustice after injustice. Honourable members opposite should look at the judgments in cases before the Administrative Appeals Tribunal. This Government has effectively cut out the TPI pension for any person over the age of 65. Honourable members opposite should look at section 24 of the Act and see how unjust it is. They should look at section 21 and see what they have done to the burden of proof provision. When the opposite stand and say `Lest we forget', I put it to them that this Government should look again and repeal the wrong that has been inflicted on the ex-service men and women of Australia. Madam SPEAKER —Order! The honourable member's time has expired. Mrs DARLING(Lilley)(10.30) —As Queensland is celebrating Labour Day today, I would like to speak about important developments which will seriously affect the Labor movement and which require the full attention of those with a commitment to Labor's cause. However, before I do so I wish briefly to comment on the plaint of the honourable member for Fisher (Mr Slipper) regarding constituents on Bribie Island whom he claims are being neglected by the Federal Government. I was very surprised to hear that because although we are all aware that there is a problem for any government as we come to the turn of the century because of the increasing ratio of aged people to younger and working people; yet in conditions of economic restraint the Hawke Government granted $376,000 for an extension to the aged hostel on Bribie Island at the end of last year. Further, the Government has established a special office for the aged. I believe that at 2 p.m. tomorrow at the Bribie Island markets restaurant there will be a public meeting to discuss the problems of pensioners on Bribie Island. The honourable member for Fisher should be made aware of the fact that under the Hawke Government rent assistance for pensioners has been increased by 50 per cent. The Government has extended the range of aged hostel subsidies to better assist the care needs of the elderly and has indexed increases in this funding. Nursing home bed subsidies are increased annually under this Government with $1,072m being spent on this in 1986-87, and by 1989 the Labor Government will have doubled the number of hostel places. This is the sort of information that the honourable member for Fisher should be giving to his constituent on Bribie Island. I would like to thank my friend Bill Osborne from Bribie Island who, when I visited him at that beautiful spot yesterday in preparation for the Labour Day celebrations, gave me the information regarding the special meeting tomorrow on Bribie Islands. In particular, in the last couple of minutes available to me in this debate, I would like to speak about the role of the Federal Labor Government in the development, because as a member of that Government I can see first hand the important links between our Government and the achievement of those objectives which lie at the heart of the labor movement. It is indeed timely to reflect on these links because today we are faced with a serious challenge by conservative forces to hold on to all the reforms and improvements that Labor Governments and the unions have struggled so hard to achieve for working people. However difficult the economic or political times, we must always recognise our Federal Government as a central part of the struggle to maintain and improve the living standards of working people and welfare recipients in our community. It is for this reason that I would like to speak about elements of Federal Labor policy in comparison with what is offered by the opponents of social reform, the New Right and other forces of reaction. This comparison becomes absolutely crucial as the important differences between our objectives and those of our conservative opponents are quite often underscored by inaccurate data contained in statement given to the media. We must therefore clearly state what our policies are and contrast those with the damaging, inequitable and divisive alternatives of the-- Mr Hollis —Forces of darkness. Mrs DARLING —As the honourable member for Throsby points out, the forces of darkness, the conservative parties. I would like to touch briefly on the area of education. Under Labor the number of school-children staying on to grade 12 has increased from 36 per cent under the Fraser Liberal Government to 46 per cent today. The Government has set itself a target of 65 per cent retention to provide young people with the greatest possible qualifications for the labour market and higher education. Mr Cunningham —A 58 per cent retention rate in Victoria. Mrs DARLING —As the honourable member for McMillan says, a 58 per cent retention rate in Victoria under the Labor Government. The Government has also created over 36,000 extra places in universities and colleges of advanced education since 1983. There has been a 10 per cent increase in the number of yearly housing commencements under Labor. Funds available for public housing have increased by 42 per cent. Madam SPEAKER —Order! The honourable member's time has expired. Mr HAWKER(Wannon)(10.35) —I want to bring to the attention of the House tonight a matter that is becoming of grave concern to people in the country. I am referring, of course, to the funding of local roads. Ever since this Labor Government came to power, we have seen a continual reduction in the real allocation of funds by the Commonwealth Government. Every year, in real terms, the allocation to road funding from this Federal Government has been cut. The effect this is having on local roads is becoming very serious. Tonight I will read from some letters I have received from a few shires in my electorate which might be of interest to honourable members to reinforce the seriousness of this matter. I will start off with a letter that is written to the Minister so that honourable members cannot say that I am being too selective. It states: The Council, at its last meeting, resolved that you be advised of its concern that road funding under the Australian Land Transport Program be maintained in real terms. . . . . Council is disturbed by the practice of tampering with road funding commitments to achieve short term financial benefits, and is apprehensive that such practice will be repeated in the future in the light of budgetary considerations of the day. This ad hoc approach to road funding is disruptive to long term planning by road authorities, and is detrimental to their roadworks programs and to the employment prospects of the work forces concerned. On every count it is a matter of extreme importance that road funding should not be overlooked by this Government, particularly, when it is being considered in the mini-Budget. The letter continues: For some years now, the Council has concentrated on bringing its Main Roads up to a reasonable standard- so it is trying to pull its weight- but with the increasing impact of heavy stock transports, milk tankers, bulk superphosphate trucks and other heavy vehicles, these roads are smashing up quicker than the Council can reconstruct them. Clearly funding has not kept pace with either roadmaking costs or increased vehicle weights, and any further reductions in funding would be catastrophic for the future of our road networks. Council strongly urges the Federal Government . . . Let us look at another letter. I will pick bits and pieces out. It states: This Council, like most other rural Councils, is very concerned about the declining road grants and the bleak future for continued funding at realistic levels. There must be no doubt that road conditions must deteriorate at an alarming rate over the next few years, unless there is a significant injection of additional funds. The warning is there. If members of the Government do not heed this warning, they stand condemned for what will happen to the roads, particularly those in rural Australia. The letter continues: Australia's network of roads and streets does far more than just carry traffic. Maybe honourable members opposite forget that. The letter continues: It plays a vital commercial and social role in the local economy, and has a major influence on employment, business, investment and safety. Realistic spending on roads creates jobs and economic prosperity now. But above all, it creates and maintains an enduring national asset which will enhance the economic efficiency and lifestyle of the nations residents for generations to come. I could not put it better myself. Mr Hollis —You wrote it. Mr HAWKER —The letter is addressed to me, I did not write it. It continues: It has been demonstrated that there are very real benefits to the community in increased road funding. A Federal Government study report by the Bureau of Transport Economics reveals that road spending generates a return to the community of more than three times its value in overall benefits. These benefits include increased productivity, investment, developments, retail sales, employment and income distribution; reduced fuel use, freight cost, delivered prices of materials and goods, travel time, delays and road accidents, enhanced or creative opportunities for local economies, efficient or enjoyable land use and recreation, travel conditions and quality of life. It has everything there. Honourable members can understand how concerned we are when we hear about the Victorian Minister of Transport foreshadowing a $40m cut in Federal grants to the State in the coming mini-Budget. Mr Hodgman —Shame. Mr HAWKER —It is indeed shameful. Time is running short. I will not get to the letters from the rest of the shires, but I will read them to honourable members in the next adjournment debate. I am horrified to find a letter from the Minister for Transport (Mr Peter Morris) written only last month. In conclusion he states: Thank you for your interest in this important matter. Great! He continues: I am confident that the Federal Government's road funding programs will continue to contribute to a major improvement in the quality and safety of roads throughout Australia. We see road funding being cut and the State Minister is talking about a further cut and yet the Federal Minister cannot even see what is happening. Madam SPEAKER —Order! The honourable member's time has expired. Mr BRUMBY(Bendigo)(10.40) —Tonight I was going to talk about some comments which I had the misfortune to hear today on the radio as I was driving to Tullamarine Airport. They were made by the Victorian Leader of the Opposition, Mr Jeffrey Kennett, who is a noted friend and confidant of the Leader of the Liberal Party of Australia, the honourable member of Bennelong (Mr Howard)-- Mr Robert Brown —Was he on the telephone? Mr BRUMBY —He was not on the telephone; I heard him on the car radio. Before I comment on some of the statements Mr Kennett made, I want to pick up the contribution that has just been made by the honourable member for Wannon (Mr Hawker) because, in a general sense, I can relate the two statements. Under this Government Federal funding for roads has increased substantially. When we came to government in 1983-- Mr Hawker —Madam Speaker, I raise a point of order. If the honourable member checked his facts he would find that that is incorrect. Madam SPEAKER —Order! That is not a point of order and the honourable member well knows it. Mr BRUMBY —Thank you for your protection, Madam Speaker. When we came to government slightly more than $800m a year was being provided by the Commonwealth towards roads in Australia. The figure from this Government's last Budget was $1,245m. There has been an increase of 70 per cent in money terms in Federal Government road funding. To say that there has been a reduction in funding each year or that there has been a funding reduction in real terms is simply untrue and it is not becoming of the honourable member for Wannon, who generally has established a reputation for honesty in this place, to so distort figures which are clear in Budget Papers. There has been a 70 per cent increase in roads funding under this Government. I want to relate that matter to the statement made by the pathetic Leader of the Opposition in Victorian, Mr Kennett, because today he attacked rumours that the Federal Government may means test family allowances for families earning above $50,000 a year. Mr Kennett went on to say that far from touching family allowances this Government should be attacking sole parent beneficiaries because that was the big blow-out area of Federal Government expenditure. Let me say this: In the last 11 years the number of sole parent beneficiaries in Australia has increased by 73 per cent-from 183,000 to 316,000. Seven of those 11 years were under State and Federal Liberal governments; they were not under this Government. Seven of those 11 years in which that blow-out in numbers occurred were under governments which were led by honourable members opposite and Mr Kennett's associates in the State Parliament-Mr Lindsay Thompson, Sir Rupert Hamer and Sir Henry Bolte. That is when the increases occurred. The Liberal Party had seven years in which to correct that situation but, of course, it did nothing about it, and that says a lot about its quality in Opposition and its quality in government. It is prepared to wax lyrical; it is prepared to make great statements about things it would like to do or things it thinks should be done but, in reality, it is the great pretender. The Liberal Party's record in government-it knows this and is shamed by it-was pathetic. The big increase in the number of sole parent beneficiaries occurred during the seven out of the 11 years in which it was in government and it knows that it did not do a single thing to address that fundamental issue. It is this Government which has established child maintenance reforms; it is this Government which this year is implementing the first stage of those reforms; it is this Government which next year will be implementing the second stage of those reforms. Those reforms will place more of the burden back on the individuals who are responsible for the sole parent family and the maintenance of children. I make the point that the Liberal Party did nothing. Members of the Liberal Party are great pretenders. They come into this place and talk about the need for fiscal restraint but when it comes to roads funding, sole parent beneficiaries or any other item of Federal government spending, they are incapable-either in government or in opposition-of making a single change or a single cut which would put effect to the philosophy which they espouse. When we come to family allowance, what about the great statement by the Liberal Party treasurer, Mr Elliott, who must be on an income of more than $200,000 a year, who claims family allowance and says in the next breath, `I don't think I should'? If Liberal Party members do not think he should be getting the allowance and believe that family allowance should be means tested, why do they not for once, in their short Parliamentary careers, have the gumption to stand up and support it? Madam SPEAKER —Order! The honourable member's time has expired. Mr McGAURAN(Gippsland)(10.45) —Far too often members of the public have a perception of members of parliament sitting on these benches for far too long, having outlived their usefulness and collecting a huge superannuation cheque, whereas the actual figures shown that this place has a very high turnover of members and that very few ever reach the stage of acquiring a pension or a gold pass. Sadly, the honourable member for Bendigo (Mr Brumby) falls into that all too often category. When the honourable member goes at the next election, as surely he must with a bare 2 per cent majority, I will feel-admittedly momentarily-a tinge of sadness. There are some qualities about the honourable member for Bendigo that are admirable, and his mother would tell us that no doubt. But he has some qualities that I find absolutely repulsive. The major one-- Madam SPEAKER —Order! I suggest that the honourable member for Gippsland withdraws that comment and that he does not cast imputations upon other members of this House. Mr McGAURAN —Madam Speaker, I find a number of his attitudes offensive. Madam SPEAKER —The honourable member will first withdraw. Mr McGAURAN —Of course, Madam Speaker; I withdraw. Let us rejoin our examination of the contribution to this place by the honourable member for Bendigo. It is a chequered contribution at best and at times has bordered on the unsatisfactory. Tonight is another example of that, as the honourable member for Denison (Mr Hodgman) would know, he being a long serving member of this place and a good observer of those who will remain here and of those who will not. The honourable member for Bendigo falls into the category of those who will not. Mr Hodgman —But you have a long career ahead of you. Mr McGAURAN —It is very good of the honourable member for Denison to say so. The point I wish to make is that the honourable member for Bendigo has become distinguished in this place for uncritically parroting government policy and, in the process, betraying the true interest of his constituents. It does not matter whether the subject be interest rates, fuel prices, rural reconstruction, communications, or transportation, the honourable member for Bendigo, in a very slick fashion, very erudite fashion, has an answer for everything if it means defending the Government. Forget his constituents; they do not matter so much as his determination to defend the Government. I believe his contribution tonight was part of that unfair, unbalanced approach he brings to this House. But I am being distracted from my major concern this evening. Like all other members here I have received yet another glossy publication emanating from the Government. This one deals with young people. It is called `Options'. It is a newsletter of the Office of Youth Affairs. Mr Brumby —I raise a point of order, Madam Speaker. The honourable member for Gippsland, during his contribution, had his foot up on the couch. That situation is not covered in the Standing Orders, and I believe that he should be asked to take his foot off the couch. Madam SPEAKER —There is no standing order relevant to that matter. I suppose people observe their own standards within the House. Mr McGAURAN —If anybody needed convincing as to the depths to which the honourable member for Bendigo has sunk, that frivolous point of order is such evidence. Madam SPEAKER —The Chair will decide whether a point of order is frivolous. Mr McGAURAN —Like everybody else, I have received a glossy, expensive publication which seeks to highlight, supposedly, this Government's assistance to young people. The Government has been too clever by half because of the front page it has the headline `Young people give OK to youth policies'. The document states: A national survey has confirmed that the thrust of the Commonwealth Government's youth strategy is right and is supported by young people. It does not matter in what way we examine the results of the Australian Nationwide Opinion Polls, we will find that young people absolutely condemn the Government's failed Priority One campaign and all of the frustrations being experienced by Austudy. A mere 12 per cent of people between the ages of 15 and 24 cited the Priority One program when asked to nominate Federal Government programs or policies that have helped people. In fact around 41 per cent of that same age group did not even know that Priority One existed. Seventy per cent of those aged over 25 were not aware of Priority One. Moreover, over half thought that the Government was doing a poor or very poor job. This is a misrepresentation of the Government's own survey-- Madam SPEAKER —Order! The honourable member's time has expired. Mr CUNNINGHAM(McMillan)(10.50) —I rise again to follow the honourable member for Gippsland (Mr McGauran) who, during two adjournment debates in a row, has put in a very poor performance for a protege of the right honourable member for New England (Mr Sinclair), someone who is seen as the disgraced leader of the present National Party whose riding orders are now coming from Queensland. We have also noticed that whilst the right honourable member for New England has now taken over as spokesperson-I would not say the shadow position-for the National Party on trade, the honourable member for Gippsland has been made his deputy. No doubt somewhere down the line the Party sees possibilities for the honourable member for Gippsland, but he will want to improve a lot on his last couple of performances. We have heard tonight a couple of strange speeches in relation to road funding. The honourable member for Wannon (Mr Hawker) made allegations that this Government was responsible for cuts in national road funding. Let me give him the actual facts-instead of quoting from letters from local government-on funding for the different road categories. In 1981-82, the last full year of the Fraser Government, $302.7m was spent on grants for national roads. In this last year, 1986-87, this Government has spent $564m, an increase of 86.3 per cent. Mr Downer —Your figures are way out. Madam SPEAKER —Order! The honourable member for Mayo now occupies a place on the front bench. He should not interject from a seat on the back bench which is not his own. I do not think it shows great courtesy to the House. Mr CUNNINGHAM —I refer to the arterial road program. When the previous Government was thrown out of office it had spent $220.7m. Last year we spent $422.3m, an increase of 91.3 per cent. That is hardly a cut in funding. With regard to local roads, $161.6m was spent in the last year of the previous Government. In the last year we returned money to the taxpayers-I would not say the Government spent it; the taxpayers' money was returned to them-to the tune of $258.7m, a 60.1 per cent increase. The total figures are $685m for 1981-82 and $1,245m, as stated by the honourable member for Bendigo (Mr Brumby), for 1986-87. That represents an 81.8 per cent increase, which is not a bad effort. Yet the honourable member for Wannon, who has taken over the electorate of the former Prime Minister, tried to tell us that funds have been cut. The other issue that I wish to cover very quickly tonight in the last couple of minutes remaining to me is petrol prices. That is causing a lot of concern in country areas. I am not afraid to stand up in this House and say that we as a government will certainly have to do something about it. We have a system in Australia in which the wholesale price is set by the authorities established to look after that matter. Yet in my electorate in the last week we have seen a performance by the petrol companies and the retailers which has really astounded me. I refer to the span of prices in just one electorate. I think we will certainly have to do something about the discounting by the petrol companies in the wholesale area. Some people are getting cheap petrol and others are missing out, even in the country. I would like to bring to the attention of the House the disparity in those prices. In the La-trobe Valley area of my electorate, these are the prices that are being charged today: Traralgon 58.9c; Morwell 59.9c; Moe 59.9c; Trafalgar 56.6c; and Warragul 59.9c. I turn to places a little closer to Melbourne. The price charged in Garfield is 47.8c; Officer, 48.3c; and Nar Nar Goon, my old home town, 48.3c. So there is an 11c difference in price in one country electorate. I raise this matter tonight to bring to the Government's attention the fact that we will have to look seriously at how these figures are being set. An 11c discount is being given to one section of one electorate, which is not being fed through to other sectors. Madam SPEAKER —Order! The honourable member's time has expired. Mr ANDREW(Wakefield)(10.55) —Madam Speaker, I rise tonight conscious that recently in the House I have risen in adjournment debates to discuss what may seem to be rather frivolous issues but issues which I know are appreciated from your point of view. Tonight I turn to a rather more philosophic matter. I am prompted to rise because of the comments made by the honourable member for Denison (Mr Hodgman) when he reflected on something of our national history and the pride that Australians should feel in participating in world events. His remarks reminded me that next year Australia will be 200 years old. Too often in this place we have too short a perspective of our national history. Too often we are placed in a position where we feel more apologetic than we should about the various philosophies that we embrace because of the short history and the short perspective that is given to them. Instead a more realistic and long term perspective is appropriate. I make those comments because I have been reading a book by Michael Novak entitled The Spirit of Democratic Capitalism. I will briefly quote a particular part of the book because it is a useful overview of the 200 years that Australia has been in place. Mr Brumby —In European history. Mr ANDREW —I accept graciously the interjection from the honourable member and I concede that it is European history. I am grateful for the interjection. Novak writes: Consider the world at the beginning of the democratic capitalist era. The watershed year- I think this is significant in view of our own history- was 1776. Almost simultaneously, Adam Smith published An Inquiry into the Nature and Causes of the Wealth of Nations and the first democratic capitalist republic came into existence in the United States. Until that time, the classical pattern of political economy was mercantilist. Famines ravaged the civilised world on the average once a generation. Plagues seized scores of thousands. In the 1780s, four-fifths of French families devoted 90 per cent of their incomes simply to buying bread-only bread-to stay alive. Life expectancy in 1795 in France was 27.3 years for women and 23.4 for men. In the year 1800, in the whole of Germany fewer than a thousand people had incomes as high as $1,000. Michael Novak goes on to say: In most places, elementary hygiene seemed unknown. In Africa, the wheel had never been invented. Medical practice in vast stretches of the world was incantatory. Illiteracy was virtually universal. Most of the planet was unmapped. Hardly any of the world's cities had plumbing systems. Potable water was mostly unavailable. Ignorance was so extreme that most humans did not know that unclean water spreads disease. In 1800, popular self-government was uncommon. Democracies (notably Great Britain and the United States) were few. Nearly all states were authoritarian. In most regions, economic enterprises stagnated. In 1800, there were more private business corporations in the infant United States (population: four million) than in all of Europe combined. The invention of the market economy in Great Britain and the United States more profoundly revolutionised the world between 1800 and the present than any other single force. After five millennia of blundering, human beings finally figured out how wealth may be produced in a sustained, systematic way. In Great Britain, real wages doubled between 1800 and 1850, and doubled again between 1850 and 1900. Since the population of Great Britain quadrupled in size, this represented a 1600 per cent increase within one century. The gains in liberty of personal choice-in a more varied diet, new beverages, new skills, new vocations-increased accordingly. I quote that statement because in the 200-year period that Europeans have occupied this nation there has been a dramatic change in the wealth and opportunities that this globe and its people have been able to embrace. It is that whole process-the concept of the market economy-that this side of the House wholeheartedly embraces and puts as a more than viable alternative to the Australian electorate. Question resolved in the affirmative. House adjourned at 11 p.m. The following papers were deemed to have been presented on 4 May 1987: Australian Capital Territory Supreme Court Act-Rules of Court-Statutory Rules 1987, No. 67. Broadcasting and Television Amendment Act-Regulations-Statutory Rules 1987, No. 57. First Home Owners Act-Regulation-Statutory Rules 1987, No. 68. Lands Acquisition Act-Statement of lands acquired by agreement authorised under subsection 7 (1). Papua New Guinea (Staffing Assistance) Act-Regulations-Statutory Rules 1987, No. 63. Radiocommunications Act-Regulations-Statutory Rules 1987, No. 61. Radiocommunications (Receiver Licence Tax) Act-Regulation-Statutory Rules 1987, No. 59. Radiocommunications (Temporary Permit Tax) Act-Regulation-Statutory Rules 1987, No. 60. Radiocommunications (Transmitter Licence Tax) Act-Regulation-Statutory Rules 1987, No. 58. Seat of Government (Administration) Act- Ordinances-1987- No. 13-Magistrates Court (Civil Jurisdiction) (Amendment). No. 14-Small Claims (Amendment). No. 15-Testamentary Guardianship (Amendment). Regulations-1987-No. 3 (Juries Ordinance). Sex Discrimination Act-Regulation-Statutory Rules 1987, No. 56. Superannuation Act-Regulation-Statutory Rules 1987, No. 62. Therapeutic Goods Act-Regulations-Statutory Rules 1987, No. 64. The following answers to questions were circulated: (Question No. 4874) Mr Langmore asked the Minister for Foreign Affairs, upon notice, on 12 November 1986: (1) Is he able to say what was the net effect of Australia's development assistance on the nation's balance of payments in the most recent year for which the information is available. (2) What are the components of that effect on the balance of payments. Mr Hayden —The answer to the honourable member's question is as follows: (1) About 78 per cent of aid expenditure in 1985-86, excluding the untied Grant-in-Aid to Papua New Guinea, was on goods and services procured in Australia or was returned to Australia to purchase goods and services. Such aid totalled $728 million and had the direct net effect of increasing Australia's balance of payments deficit by around $160 million. As I indicated in my answer to a previous question to the honourable member, it is difficult to estimate with precision the impact of the Grant-in-Aid to Papua New Guinea on the Australian economy. Nevertheless, it seems likely that a high proportion if not all the Grant-in-Aid returns to Australia to purchase goods and services. In 1985-86, Australia's exports to Papua New Guinea totalled $564 million; the Grant-in-Aid was $303 million. Exports at this level would not have been sustainable without the Grant-in-Aid's contribution to Papua New Guinea's economic growth, budget and balance of payments. Uncertainty about what proportion of the Grant-in-Aid returns to Australia prohibits the calculation of a simple, reliable net figure on the direct effect of Australia's total overseas aid program on our balance of payments. If it is assumed the full Grant-in-Aid returns to Australia, the share of total aid expenditure spent directly on Australian-sourced goods and services increases to 84%. If, more conservatively, it is assumed that 75% of the Grant-in-Aid returns, it is still the case that 77% of total aid expenditures are spent on Australian-sourced goods and services. Under the assumption that between 75% and 100% of the PNG Grant-in-Aid returned to Australia, Australia's $1031 million aid expenditure in 1985-86 had the direct net effect of increasing the balance of payments deficit by around $160 million to $240 million. It should be noted however that there are major methodological difficulties in assessing the net effect of Australia's development assistance on the nation's balance of payments. Not least among these is the impact of `second round' effects. An example of such an effect is the expenditure of aid funds in Australia but on products which are partly or fully imported. A further example is, the effect of Australian aid on assisting recipient countries economic growth and therefore their overall capacity and propensity to import from Australia. In answering this question, such indirect effects have not been calculated, but their impact is likely to be substantial. (2) The major components of Australia's aid program (as presented in budget format) and their estimated effects on the balance of payments are outlined below. (a) Aid to Papua New Guinea in 1985-86 accounted for $320 million, the majority of which was in the form of a Grant-in-Aid of almost $303 million. As indicated above, while it is difficult to estimate what proportion of the Grant-in-Aid returns to Australia to purchase goods and services, it is likely to be high. The remaining assistance to Papua New Guinea of over $17 million was almost fully expended on Australian-sourced goods and services. (b) Bilateral aid projects, excluding Papua New Guinea, accounted for $143 million. Approximately 91% or almost $130 million was spent on Australian-sourced goods or services. (c) Education and training activities, are principally conducted in Australia. Some 99% of the $131 million for education and training in 1985-86 (excluding Papua New Guinea) was expended in Australia. (d) Food aid accounted for $119 million of the aid budget. Approximately $88 million or 74% was spent on Australian produce, foodstuffs or services. (e) Australian subscriptions to International Financial Institutions totalled $106 million in 1985-86. Some 65% or $69 million returned to Australia through the purchase of goods and services for use in these Institution's projects. About 35% of the $65 million contributed to other international bodies returned to Australia in the same manner. (f) Of the remaining $148 million spent on other development assistance, about $114 million or 77% was expended in Australia. (Question No. 5061) Mr Coleman asked the Minister for Foreign Affairs, upon notice, on 18 February 1987: (1) How many official visits to Australia have been made by delegations of Soviet and Eastern Bloc academics, journalists and artists in 1985 and 1986? (2) What was the nature of the visit in each case? Mr Hayden —The answer to the honourable member's question is as follows: (1) (a) Academics, 4; (b) Journalists, nil; (c) Artists, nil. (2) A two person delegation from the Institute of Oriental Studies of the USSR Academy of Sciences undertook a study visit to a number of Australian Universities in October 1985. A three person Education delegation visited Australia in June 1985 to study education in Australia. An academic taught Russian language at Melbourne and Monash Universities during 1986. An acacemic taught Russian language at the ANU and Queensland universities during 1986. (Question No. 5063) Mr Coleman asked the Minister for Foreign Affairs, upon notice, on 18 February 1987: Is he able to say who will select, and what criteria will be used to select, Soviet television programs to be shown in Australia by the ABC on the occasion of the 70th Anniversary of the October Revolution under the Program of Cultural Co-operation between Australia and the USSR. Mr Hayden —The answer to the honourable member's question is as follows: The ABC will select programs in accordance with its normal programming criteria and an agreement between the ABC and Gostelradio which states that both sides will facilitate the provision to each other of news material on key events in Soviet and Australian life. (Question No. 5064) Mr Coleman asked the Minister for Foreign Affairs, upon notice, on 18 February 1987: Is he able to say what criteria will be used in the selection of Australian youth and student organisations to participate in an exchange with Soviet youth and student organisations as part of the Program of Cultural Co-operation between Australia and the USSR for the years 1987 and 1988. Mr Hayden —The answer to the honourable member's question is as follows: Any Australian organisation which is interested in youth exchanges with Soviet organisations may make a proposal. If desired my Department would be prepared to assist in transmitting the proposal to the Soviet authorities. The details of exchanges would then be worked out directly between the interested organisations on both sides. So far as I am aware no exchange has taken place as yet. (Question No. 5076) Mr Coleman asked the Minister for Foreign Affairs, upon notice, on 18 February 1987: Is he able to say whether the 2 main Nicaraguan resistance groups, the United Nicaraguan Opposition (UNO) and the Southern Opposition Bloc (BOS), signed an agreement on joint political goals in January 1987. If so, what were the principles outlined in the agreement. Mr Hayden —The answer to the honourable member's question is as follows: The United Nicaraguan Opposition (UNO) and the Southern Opposition Bloc (BOS) signed a ``Declaration of Democratic Commitment'' (Acta de Compromiso Democratica de la Resistencia Nicaragunse) in San Jose on 10 January 1987. The principles and objectives outlined in the agreement were as follows: political pluralism; a participatory democratic system based on free elections (to be supervised by the OAS); the separation and independence of the powers of the state; respect for fundamental liberties and human rights; respect for private property; recognition of the historic rights of the indigenous peoples of the Atlantic Coast. The current status of this agreement is uncertain in the light of the recent virtual disintegration of UNO. (Question No. 5218) Mr Beddall asked the Minister for Sport, Recreation and Tourism, upon notice, on 20 March 1987: (1) Which company was chosen as the major contractor to build the Brisbane Expo 88 site. (2) Have all contracts awarded to companies been the subject of correct tendering procedures, if not, why not. (3) Which company has been awarded the majority of contracts. (4) Is he satisfied with the Queensland Government's handling of the tendering procedures, if not, why not. Mr John Brown —The answer to the honourable member's question is as follows: The Queensland legislation established the Brisbane and South Bank Redevelopment Authority to acquire and develop the site, market and organise Expo 88 and dispose of the site afterwards. Responsibility for contracts rest with the Authority. The tendering procedures are therefore not within the Commonwealth's responsibility. (Question No. 5229) Mr Coleman asked the Minister for Arts, Heritage and Environment, upon notice, on 23 March 1987: When will he answer my Question No. 3299 placed on notice on 11 March 1986. Mr Cohen —The answer to the honourable member's question is as follows: My response to Question No. 3299 was sent to the Table Office on 27 April 1987. (Question No. 5232) Mr Lloyd asked the Minister for Transport, upon notice, on 24 March 1987: Is he able to say whether there is a problem in New Zealand over waterfront work allocation rules applying to less than container load trans-Tasman cargoes; if so, what is (a) the cost of the problem to Australian exporters and (b) being done to overcome the problem. Mr Peter Morris —The answer to the honourable member's question is as follows: In New Zealand less than container load trans-Tasman cargoes in ISO Containers are presently packed or unpacked by New Zealand waterside workers at on-wharf facilities. The New Zealand Ministry of Transport has advised the Federal Department of Transport that this arrangement is generally held to be considerably more expensive than for the equivalent work to be done off wharf at a consolidator or shipper depot, as is the case with full container loads and the special collapsable seafreighter units. However I am advised that the present practice with respect to LCL ISO traffic is now recognised in the New Zealand Waterfront Industry Act. (a) No up to date analysis of the cost is available. (b) These are arrangements internal to New Zealand. However a review of trans-Tasman shipping arrangements is being conducted jointly by the Australian Federal Bureau of Transport Economics and the New Zealand Ministry of Transport. Issues relating to the efficient handling of cargoes are encompassed by that Review which is expected to document the costs of this and other customary practices. The New Zealand Ministry of Transport has advised the Federal Department of Transport that it is also intended that this matter be more fully examined during Phase II of the New Zealand Government's on-shore costs exercise in a study of waterfront practices. (Question No. 5240) Mr Ruddock asked the Minister for Foreign Affairs, upon notice, on 25 March 1987: (1) Did Budget Paper No. 9, which sets out Australia's Overseas Development Assistance Program for 1986-87, state (a) on page 12 that the estimated contribution to the International Fund for Agricultural Development (IFAD) was $2.9m and (b) on page 13 that provision has been made for $2.9m to be drawn down in 1986-87. (2) Did he in his answer to question No. 4993 (Hansard, 17 March 1987, page 990) advise that payments totalling $1.7m are expected to be made in 1986-87 to IFAD; if so, what is the reason for the reduction. (3) Are the payments to be made in 1986-87 only relevant to the first replenishment of IFAD committed for 1981-83. (4) Did IFAD agree that a second replenishment for the period 1985-87 would be raised from constituent members. (5) Did Australia pledge $US5.934m to the second replenishment. (6) Do any of the funds committed or paid in 1986-87 constitute a part payment of the pledged second replenishment; if not, has Australia sought any extension of time to fund its commitment to IFAD or does it intend to dishonour the pledge. Mr Hayden —The answer to the honourable member's question is as follows: (1) (a) Yes. (b) Yes. (2) Yes. Payment of $A1.7m has been made to IFAD for 1986-87. Australia's contributions to IFAD are made in the form of promissory notes which are drawn-down by IFAD to meet Australia's share of the Fund's disbursement costs. Before the end of each financial year, IFAD provides Australia with its estimates of the amount of money it expects to draw-down in the next financial year. These estimates appear in Budget Paper No. 9. Actual draw-downs are based on actual disbursements. The discrepancy between IFAD's estimated draw-downs and actual draw-downs in 1986-87 results from the fact that IFAD experienced a lower rate of disbursement during this period than it had previously estimated. IFAD has notified us that exchange rate fluctuations have also contributed to the lower than expected draw-down of Australia's promissory notes. (3) Yes. (4) Yes. (5) Yes. Australia pledged $A8.48m to the second replenishment, which at the agreed exchange rate is equivalent to $US5.934m. (6) No, none of the funds paid in 1986-87 constitute payment of the pledged second replenishment and Australia has not sought any extension of time to fund its pledge to IFAD. IFAD estimates that the first call on any Australian contribution to the second replenishment will not take place until the 1989-90 financial year. As the honourable member is aware from my answer to his previous question, a comparative assessment of the value of Australia's participation in international financial institutions and IFAD has been initiated as a basis for determining future contributions. This process is nearing completion and the Government will be considering the question of Australia's participation in IFAD's second replenishment in the context of the recommendations of this review.