Wednesday, 21 October 1987 Madam SPEAKER (Hon. Joan Child) took the chair at 10 a.m., and read prayers. Motion (by Mr Young)-by leave - agreed to: That, in accordance with the provisions of the Australian Institute of Aboriginal Studies Act 1964, this House appoint Mr Gayler and Mr Miles to be members of the Council of the Australian Institute of Aboriginal Studies and to continue as members until the dissolution of the Thirty-fifth Parliament. Debate resumed from 20 October, on motion by Mr Holding: That the Bill be now read a second time. Madam SPEAKER — Before the debate is resumed, I remind the House that it has been agreed that a general debate be allowed covering the States Grants (General Revenue) Amendment Bill 1987 and the States (Works and Housing) Assistance Amendment Bill 1987. Mr PORTER(Barker)(10.01) —The States (Works and Housing) Assistance Amendment Bill seeks to amend the States (Works and Housing) Assistance Act 1985 to give effect to decisions taken at the 25 May 1987 Loan Council meeting. Those decisions included: first, the allocation of $176m in interest free capital grants to the States as part of the 1987-88 State governments' Loan Council program; secondly, an agreement by the Loan Council that the States and the Northern Territory could use all of the balance of the Loan Council program for housing if they so desired-this year that will be around $386m; and thirdly, the prepayment of half the capital grant, that is, $88m in the first half of 1988-89 pending passage of similar legislation next year. This legislation comes before the House at a time when there are more people than ever on public housing waiting lists, when rents have skyrocketed, and when there are tens of thousands of people seeking to buy houses who are both unable to afford them and unlikely to be able to afford them under the current policies. For that reason I foreshadow that, in relation to the second Bill, I will move this amendment: That all words after `that' be omitted with a view to substituting the following words: whilst not opposing the provisions of the Bill, the House condemns the Government for the delay in the reinstitution of negative gearing and for the pursuit of economic policies which have: (a) forced a record number of over 161,000 Australians on to public housing lists, (b) resulted in a long period of record high interest rates, and (c) resulted last year in the lowest number of housing starts for the last 20 years excepting the drought year of 1982-83. The economic policies of this Government over the last four years have had a devastating impact on the housing aspirations of young Australians. No other industry in Australia is more reliant on stable and consistent government economic policy making than is the housing industry. Instead of the stability, consistency and predictability required for sustainable growth, we have had instability, inconsistency and lack of certainty in policy making. Under the Hawke Government the housing industry has suffered firstly from rapidly expansionary economic policies and then, secondly, that was reversed and we had more contractionary Budgets. Along with this we have had Government-inspired record high interest rates and on again off again tax policies such as negative gearing. This economic instability together with conflicting tax policies has resulted in the housing industry being subjected to four years of exaggerated booms and busts, reflecting the stop-start policies of this Government. Treasurer Keating's first four big spending Budgets accumulated $23 billion in deficits, with borrowings to match. The Commonwealth's interest bill on government debt for this financial year will be almost $8,000m-more than the Government spends on defence and education and about six times the amount that it will spend on housing this year. This massive program of debt, borrowing and interest repayment has put upward pressure on interest rates, and it is these record high interest rates which have put the purchase of a private home beyond the reach of tens of thousands of Australian families. Home builders and home buyers are extremely sensitive to changes in interest rates, and this Government has presided over the highest interest rates in our nation's history. It is no wonder that the housing industry has experienced such a decline under the Hawke Labor Government. Recent studies on home loan affordability by the Real Estate Institute of Australia indicate that mortgage repayments are taking more and more of the average income earner's wage. Home owners, on average, are paying up to 17 per cent more of their income on mortgage repayments than they did a decade ago. That is still the case even though recent marginal falls in interest rates have been of some slight-and only slight-assistance. Regrettably, the future is not bright, with little prospect for sustained reduction in interest rates under this Government's current policies, and in fact the latest news suggests that increases in interest rates are in the offing. In Sydney, home owners are paying 45 per cent of average earnings on an average home loan. Ten years ago they were paying 28 per cent. All of our major population centres are showing an increase in the proportion of income going on mortgage repayments. In Melbourne the increase is 14 per cent; in Brisbane, 9 per cent; in Canberra, 10 per cent; in Perth, 3 per cent; and in Adelaide, 15 per cent. In addition to the increase in interest rates and the decline in home loan affordability, under this big spending Government taxes have risen to record levels. Research by the Legislative Research Service of the Parliamentary Library indicates that for a taxpayer with a dependent spouse and two children who is on average weekly earnings, the proportion of earnings paid in income tax today is treble that paid in 1961-62. This increase in taxation means that families have less disposable income to spend on items such as housing. No wonder housing starts have declined to record lows with this double squeeze being applied to families: less money to spend because of higher taxes, and housing repayments more unaffordable because of record high interest rates. The year 1986-87 was one of the worst years on record for housing starts. In a year in which the former Department of Housing and Construction's Indicative Planning Council for the Housing Industry said there was a need for 147,000 new houses, there were in fact only 117,000 starts-a shortfall of 30,000 new homes. Whilst some recovery is expected this year from last year's record low number of starts, the unmet demand for new houses, that is, the gap between the number of new houses needed and the number of new houses actually built, continues to increase. This year the Indicative Planning Council estimates that there will be a demand for between 160,000 and 170,000 new houses, but that there will be only 128,000 new housing starts. The gap of 30,000 of last year has now gone up to between 32,000 and 42,000. Instead of new houses being built to meet the demand, the cost of borrowing has been so high that families cannot afford to buy. The high cost of finance has kept buyers out of the market, depressing demand and serving to keep increases in home prices constrained. In fact in the last 12 months in Canberra and Adelaide there was actually a fall in the median house price. When there was an easing in interest rates the rush of buyers, especially in Sydney, forced up prices, in many instances leaving the young home buyers no better off. As interest rates eased marginally, more and more home buyers started to enter the market in such numbers that this Government's generated pent up demand resulted in house prices skyrocketing. Not content with pricing many families out of the home market, government policy in the rental accommodation market has compounded its effect in the open housing market. Two years ago, the Treasurer, against the advice of the Opposition, the housing industry and many economic and financial commentators, disallowed negative gearing for investment in rental accommodation. This Federal Government action was further exacerbated by State governments, such as the New South Wales Government, which introduced new tenant laws which scared even more investors out of the market. For two years we have watched the rental accommodation market dry up as a result of Commonwealth and State Government action. Rents have risen, availability of affordable accommodation has declined and more Australian families have been forced to become clients of the Government and seek government assistance through public housing or rental assistance programs. Public housing waiting lists have soared. The States have been unable to keep pace with the demand for public housing. By the end of June this year a record 161,857 applicants were on the waiting list for public rental accommodation, an increase of 20,000 since the elimination of negative gearing, and the numbers continue to grow. In his typically stop-start fashion the Treasurer has finally restored negative gearing, but after what damage? What he has done is to give the green light to the real estate investors at the same time as first home buyers were starting to re-enter the market following the slight decline in interest rates. The result, of course, has been a surge in the price of private housing. The Treasurer has engineered a situation creating an intolerable level of demand which, in Sydney in particular, is seeing a sudden increase in housing prices. The Commonwealth Government and the New South Wales Government have generated a short term overheated market which has led to gazumping and all the other side effects of yet another round of this boom and bust policy. Earlier this month the Treasurer, in a knee jerk reaction to spiralling housing costs in Sydney, tried to shift the blame to overseas purchasers. He tried to place a ban on foreign investment in Australia's established urban housing stock. Apparently it took Hong Kong investors a whole four hours to find enough holes in the proposal to drive the latest Mercedes through. Apart from being cosmetic and ineffective, the Treasurer's announcement was years late. If he really wanted to do anything he should have moved a couple of years ago when there was some Japanese buying, but there was not a New South Wales election around the corner then so he did nothing. Last week in London, after four years of erratic and inconsistent economic policy-making, this same Treasurer had the gall to blame volatility in world trade and foreign exchange markets on the slow pace of economic policy adjustment by the United States, Japan and West Germany. The blame for the chaotic state of the housing market does not lie overseas. It is the Hawke-Keating Government's irresponsible economic policy which has resulted in the abysmal housing situation today. The Government, through its inept economic policies of big Budget deficits, massive borrowing, high inflation, record interest rates and record taxation, has created a crisis in housing in Australia. In the housing area we do not need the diversion of a wealth inquiry. The disastrous Hawke-Keating record is clear: a record number of 161,857 applicants waiting for public housing; a record number of more than 64,000 applicants waiting for home purchase assistance under State schemes; a cut of $468m to public housing funding in this, the International Year of Shelter for the Homeless. In addition, 1986-87 was the year in which we saw record high interest rates. Also 1986-87 gave us one of the lowest number of housing starts on record, with the number of starts falling 30,000 below predicted demand. In 1987-88 housing starts are expected to fall by up to 42,000 houses short of demand. Home owners are paying up to 17 per cent more of their income on mortgage repayments than they were a decade ago. What a disastrous record! Some might say, `Ah! But the Government has seen the light. It has seen the error of its ways and after three years of extravagant over-spending it is starting to rein it in. It has listened to what the Opposition has been saying and it has reintroduced negative gearing. Surely the worst must be over'. Regrettably that is not the case. For example, Government policy has resulted in the buildup of tens of thousands of Australian home buyers wanting to buy a house as soon as the interest rates come down sufficiently to enable them to afford a house. Hence, recently when they did come down a fraction there was a stampede. This stampede of young home seekers was joined by the real estate investors who were again offered negative gearing. The combination of this demand, especially in Sydney, has meant that house prices have sky-rocketed-again sidelining many first home buyers. In addition, in order to cut its previous extravagant expenditure, the Government has looked around for scapegoats and chosen public housing. At a time of unprecedentedly long queues of families seeking housing, the Government has cut $468m from its public housing program. Last year the effect of the States (Works and Housing) Assistance Amendment Bill was to provide the States with $585m in Loan Council programs funds for public housing and capital grants of $476m. The Bill we are considering today provides for $386m in Loan Council programs funds for public housing and $207m in capital grants. These figures represent a decrease of almost $468m in Commonwealth funds available to the States for housing and capital programs. At a time when, instead of fostering private housing activity, its irresponsible and irrational economic policies have put more on public housing queues than ever, the Government has decided to cut funds for various housing programs with the result that the assistance going to those in need of housing will be drastically cut. What are the Government's estimates of the impact of its action on the hundreds of thousands of Australians currently waiting for housing assistance? At last year's level of funding, the States were able to accommodate 48,000 applicants for public rental accommodation. Does the new level of funding mean that in the coming year only 27,000 will be able to be accommodated? If it does, it means that the public housing queues will blow out to a staggering 190,000. That is not 190,000 individuals; it is 190,000 applicants, with their spouses and children. Honourable members will recall that the Prime Minister (Mr Hawke), in one of his expansive election moods earlier this year, promised the nation that no child would live in poverty by the year 1990. Yet the public housing waiting lists of this country continue to be a scandal and the Bill before us will aggravate the situation. What will this $468m cut in Commonwealth funding mean to the numbers on the waiting lists of the States' various home purchase assistance programs? This year started with 64,000 people waiting for home purchase assistance. Will we end the year with 80,000 families waiting for home purchase assistance? The New South Wales Government, acting in concert with the Commonwealth, has increased the interest rate on their State-subsidised home mortgages by as much as 6 or 7 per cent. These are low income earners who had joined the program because of the low interest mortgages offered by the State. This increase in interest rates, together with new repayment schedules, means that many low income home buyers under the New South Wales Government's supposedly affordable home loans scheme will, in effect, just be paying rent with no chance of ever owning their own homes. For example, one home buyer under this scheme today owes more than $44,000 on a $46,000 loan. As a result of the changes, by the year 2000 he will owe $8,000 more on his home loan than he does today. The Labor Government's record, both in relation to its housing policy and its general economic policy, has undermined the housing industry, has undermined the confidence of home buyers, has put housing beyond the reach of tens of thousands of Australians, has put more people on public housing queues than ever before, and in concert with Labor States such as New South Wales, has forced up the cost of housing for those most in need. Having caused this awful mess, the Government has now decided to cut $468m from public housing and capital funding to the States, further aggravating an already intolerable position. The housing problem is of the Government's own making. It is causing despair to those families seeking housing. Until the Government gets its economic policies right, the calamitous housing situation will continue. Mr CLEELAND(McEwen)(10.21) —We have heard a litany of part truth, half-truths and the wolf's cry from the honourable member for Barker (Mr Porter). Last night the shadow Treasurer, the honourable member for Kooyong (Mr Peacock), speaking on these Bills, the States Grants (General Revenue) Amendment Bill and the States (Works and Housing) Assistance Amendment Bill, called for an increase in road funding. The honourable member for Barker now calls for an increase in State grants. We heard the honourable member for Gippsland (Mr McGauran) last night calling for an increase in Commonwealth expenditure. They seem to ignore the headlines in today's newspapers, which tell us `One Billion Dollars Wiped from Share Values Around the World' and `United States Economy in Tatters'. These gentlemen criticise the Government for restraint. They criticise the Government for recognising the very tenuous position of Australia in the world economy today. They ignore the reality. They ignore their stated position on expenditure during the last election. They stand condemned from their own mouths. What, in the last election, did they offer the Australian public? What did they suggest they would do should they be elected? They were going to slash taxes. They were going to increase consumer spending and suck in further imports as a direct result of their shallow call for decreased taxes. But that was not the only thing they were going to do. They were going to slash 16 per cent from Commonwealth programs-a minor cut, just 16 per cent across the board. Professor Porter of Monash University was going to go further. He wanted cuts of over 20 per cent to Commonwealth expenditure. Among the Opposition's right wing allies is Mr McLachlan of the National Farmers Federation. He was going to cut $11 billion in one quick, massive cut: $240m from defence; $1,000m from education; $150m from school funding; $5,800m from health; $500m from family allowances; $500m from unemployment benefits; $100m from discount benefits; $125m from supporting parents and $140m from pensions. But Mr McLachlan wanted more. From the Australian Broadcasting Corporation-Special Broadcasting Service he was going to slash $577m; from employment schemes, job training, $530m; and from culture, $80m and recreation, $46m. But from the States what was he intending to do? He wanted to slash a mere $1,006m, from local government a mere $47m, and from roads, $128m. We did not see members of the National Party of Australia wandering around the countryside telling their local councils that they, with their friends, the National Farmers Federation, wanted to cut $128m from local government. Nor did we hear the National Farmers Federation or its spokesmen, National Party members in this House, tell the local councils in their electorates that they were supporting cuts to road funding. But we hear them bleat like little lambs in this House, as we heard them last night, that they oppose any restrained or proper cuts that this Government puts into effect. And the Liberal Party of Australia in the last election did not detail what the effect of its cuts would be on the Australian community. It took the Treasurer (Mr Keating)-I refer to the Australian Financial Review of 29 June 1987-to detail the effect of those massive cuts in expenditure. According to the Treasurer, the cuts would mean an increase in nursing home charges of $46 a week; a $173m cut to home and community care; cuts in pharmaceutical benefits would mean an increase of $1 for each prescription to pensioners; school class sizes would need to increase to cut $275m from education; 60,000 tertiary places would be abolished; education allowances would be cut; and there would be a cut of $112m in public housing assistance. I did not hear the honourable member for Barker speak about that, but as usual the Liberal Party members and their colleagues in the National Party will stand in this House day after day criticising the Government. Their own program, which they have not yet resiled from, is never mentioned by them. It is interesting when one looks at the world today and particularly at the market in the United States of America to realise that the supply side economics they still espouse was adopted by President Reagan. But the massive cuts to the American taxpayer that Reagan put into effect some four years ago have achieved precisely nothing. The theory of supply side economists that if taxation is cut massively there will be an automatic increase in production, a surge in the internal markets of production, has not eventuated in America. Instead, the United States has become the biggest international debtor in the world, with the largest current account deficit in its history and the largest internal deficit in its history, teetering on the brink, and partly responsible for the many problems facing world financial markets today. Opposition spokesmen since the election have had a chance to explain what they meant in the campaign. They have had a chance on every one of the Bills we have debated so far to explain to the Australian people where they stand and to detail how they would make their economic changes. The speech of the honourable member for Barker was 20 minutes of criticism. As shadow spokesman, he did not make one positive contribution or offer one suggestion as to what the Opposition would do if it were in government and had the carriage and responsibility in the dreadfully difficult economic times in which we live. Last night the shadow Treasurer, speaking on these Bills, spent 20 minutes criticising the Government, criticising the level of debt, and criticising the macromanagement. But not once in that speech did he have the courage, indeed the fortitude, even to suggest an alternative program. What would the Opposition do? He did not answer. He did not make a suggestion. It is a sort of mindless approach, the coward's approach, that the Opposition continually runs in this House, for it has no capacity to make reasonable alternative suggestions. Indeed, it has no capacity to debate the Government on economic management. The Opposition can only criticise. We will hear other speakers today who will just criticise. They will pick and pick and pick. They will point to everything that the Government, they say, is doing wrong in economic management. But anyone who listens to the daily carping of Opposition members never hears from them a solution that they would run with. We only know that they would cut expenditure massively. Or do we know that? Within a week of the shadow Treasurer being appointed-was he elected or was he forced?-he was reported in the Australian Financial Review as suggesting, as though not game enough to say what he really thought, that maybe the supply side economic theory espoused by his Leader was not quite the way to go. But since that one, almost brave, statement, he has been very quiet on alternative economic management policies. Where does the National Party of Australia stand? My friend the honourable member for Groom (Mr McVeigh) is sitting right behind me. Does the National Party support the National Farmers Federation proposals to slash expenditure on rural councils, on road funding and on social service programs which affect the aged in country towns? It has never said it does not, and in fact by implication it supports the supply side economic approach of the Leader of the Opposition (Mr Howard). Not one Opposition spokesman will say, `That is nonsense'. I challenge the next Opposition speaker to detail, for once-if, indeed, he has a view on it-where he stands on such nonsense. If we are to spend the next three years in government, it is no use there continually being a lack of rational debate on economic management. Why should the Government come into this place every day and listen to the criticism and negativism of the Opposition when it is not prepared to put its proposals forward? Do honourable members remember the Opposition's tax policy? For two years we attempted to glean from the Opposition what its tax policy would be. Remember its Leader standing up on his little soap-box saying, `We will tell you when we are ready. When we are ready, we will tell the Australian people what our tax policy is going to be'. It took an election before we finally made any sense out of the Opposition-and then we found that the Opposition's policy was one unmitigated disaster economically. We tried to debate the Opposition's health policy. We asked where it stood on Medicare. We could not have a debate on that. Year after year during the last Government we asked where its policy on Medicare was. Mr McVeigh —What was our policy on the Australia Card? Mr CLEELAND —I am happy that the honourable gentleman interjected. The Opposition's policy on the Australia Card is like its policy on all tax cheats and welfare frauds. It supports anyone who rips off the system. But it will not have a decent debate on macroeconomic management. It will support the tax cheats and the tax frauds, and it will look after its mates who rip off the system. It will support its big National Party friends. We know who they are in Queensland. A few inquiries are going on up there now. We know where the National Party's friends are. The inquiry that Mr Fitzgerald is chairing is telling us exactly who the National Party's friends are. We would also like to see an inquiry into the Bjelke-Petersen Foundation. We would like to know the truth about where the money that goes into that fund comes from and where it goes to. We would like to know what favourites get paid out of what funds. While on this matter, we would also like to know the facts about planning. We would like to know how the Minister, Mr Hinze, has doubled his family fortune by his planning proposals. That was the honourable gentleman's approach. When we want to talk seriously about macro-economic management and about really serious policy matters in this House, the best we can get from the honourable gentleman is, `What about the Australia Card?'. That is the concept of serious debate coming from members of the Opposition. They have a long way to go before they can better this Government, or even humble backbenchers like me, in discussing any of these serious matters. But it was not a bad attempt. Mr McVeigh —Have a drink of water. Mr CLEELAND —It is not Queensland water, so I can drink it. In conclusion, I just want to say that there are no external economic forces at work which threaten the very fabric of this nation. They are not to be joked about or to be sneezed at. Since first being elected, this Government has taken some very serious decisions to change the fabric of the Australian economy. They have not been easy decisions. Indeed, they have caused a diminution in the living standards of all Australians. No one on this side of the House runs away from that fact. In fact we are proud of what we did because we knew, and we know now, that the economic forces at work in the world threaten this country. If we needed proof of that, the last two days have put it right on the front page. Yet the Opposition opposes even a Bill of this nature, which reduces responsibly the ability of State governments to enter into consumer spending arrangements, which is designed to reduce the demand of the Government on the available capital of this country and to enable an increase in the export potential of secondary industry in this country. Members of the Opposition still oppose such a simple economic proposal. They will never say that they would have cut more themselves. But they would have cut without reason. They would have cut without a policy framework to counter where their proposals would cause the most damage. They would have cut simply to gain the vote from the Australian public. This is a shallow Opposition. Its spokesmen reveal their lack of concern. Its spokesmen reveal their lack of ability to debate the serious issues in this country. I suggest that its spokesman today gave the same speech as he gave in the last Parliament, without one word changed-and this on a morning when billions of dollars have been cut from the value of trading in shares throughout the world. He has not changed his view even on such a day. He still opposes responsible economic management. For that this shallow Opposition stands condemned. Mr McVEIGH(Groom)(10.38) —I can understand the contribution of the honourable member for McEwen (Mr Cleeland) but I remind him that the States Grants (General Revenue) Amendment Bill and the States (Works and Housing) Assistance Amendment Bill are part and parcel of the legislative program for the Parliament on a yearly basis and that there was no reason for him to castigate the Opposition as much as he did. I want to pass the initial remark that one realises that these Bills are essential for the functioning of the government process. But there does appear to be some conflict of interest insofar as the Commonwealth Government has reserved for itself the right to be the big spender but is requiring the States to take up the slack and put up with the pitfalls when there is a cost cutting mechanism in place. I will comment briefly on the situation from an Australia-wide basis. I note that the honourable member for McEwen used some of his time to comment on the Queensland situation so, as a Queenslander and being a quick learner, I will take the cue from him and comment on the situation as it particularly affects Queensland. The States Grants (General Revenue) Amendment Bill seeks to fix the actual dollar amount of financial assistance grants and identified health grants and to limit the contribution to State higher education superannuation schemes, thereby, I submit, operating on an emerging cost basis. This is probably fair. I understand from the contribution by the honourable member for McEwen that Australia is in a fairly difficult climate at present, and that, of course, the Commonwealth cannot be expected to be the only one bearing the burden. There needs to be a fair distribution of the tax revenue between the States and the Commonwealth. The States (Works and Housing) Assistance Amendment Bill, on a superficial examination, given those parameters, would appear to be particularly generous, but when one looks at it, it is not. It seeks to bestow upon the States capital grants that are free of interest or conditions attaching to the manner in which they are applied by the States. This grant is then coupled with an additional grant allocated for the purpose of public housing. This, of course, is designed to be an incentive for the States, thereby encouraging them to increase their own housing expenditures. It is expected that the effects of the grants will be to relieve the States of debt charges, specifically those encompassing interest payments and sinking fund contributions. In reality these Bills represent the Government's decision to renege on its past promise to assist States by way of subventions to their bud-gets in financing their recurrent outlays. This promise was made by the then Minister for Immigration and Ethnic Affairs and Minister Assisting the Treasurer, the honourable member for Adelaide (Mr Hurford), when he introduced the 1985 version of these Bills in Parliament on 11 September 1985. On that day the Minister announced to the Australian people that they could expect `payments to be made to the States in each of the three years 1985-86, 1986-87 and 1987-88 in the form of general revenue grants'. Now that we are in the financial year 1987-88, the Government has seen that it is necessary to amend the Bill in respect of 1987-88. In this context the word `amend' appears to mean `forget about'. The Bill also incorporates amendments relating to the decision announced in the Budget requiring States to contribute to the cost of higher education superannuation schemes. We now see evidence that the Government has attempted to camouflage the real issue by focusing on the positive aspects of the original Bill and, with the use of pious rhetoric, justifying its actions. According to the Government, this decision constitutes part of the Government's policy of reducing the calls made by all levels of government on the nation's savings. We see, therefore, the image of a person giving with one hand yet taking back with the other. Clearly the good that is done through the States (Works and Housing) Assistance Amendment Bill is offset by the burden that has been placed on the States by the States Grants (General Revenue) Amendment Bill. In the light of the recent Budget wherein the Government failed to go far enough to cut expenditure-and all commentators now agree with that-in order to reduce its astronomical foreign debt, one cannot help wondering whether the Government is expecting the States to compensate for its failure at the Commonwealth level to make these cuts. It is a matter of great concern that the Government is now looking to the States to bail it out of trouble. In the Budget Speech the Treasurer (Mr Keating) tried to restore confidence in the economy by talking it up. But as we see now, talk is no substitute for action, and it is on actions such as this that the Government should be judged. As I said previously, these Bills look good on paper, but in practice the amendments in these Bills serve only to put the States in a more precarious position in comparison with the Commonwealth. Let us turn our minds back to 11 September 1985 when the Government, through the Minister at the time, sought to introduce the 1985 version of the States Grants (General Revenue) Amendment Bill. We are afforded the opportunity of recalling a premise on which the Bill was originally sold. We were told that the Bill provided for-I am referring to page 763 of Hansard of 11 September 1985-a pre-determined real level of financial assistance grants which were designed to be a more certain basis for assisting the States, as opposed to year to year variations in grants under tax sharing arrangements. The Government has also reneged on its previous promise of allowing for a 2 per cent growth in its payments. Instead, the payments to the State remain static at a fixed rate. According to the honourable member for Mackellar (Mr Carlton), the then shadow Treasurer, who responded for the Opposition in the second reading debate on the Bill on 21 November 1985, and I quote from page 3371 of Hansard: The three-year financial assistance grants represent a move away from the Fraser federalism concept of tax sharing, providing instead a predetermined real level of financial assistance grants in each of the years. In the light of the current amendments this move now has even more serious implications, as the honourable member actively predicted. He said: We are, in fact, going back to the Napoleonic postures of the Whitlam Government by having the Government determine exactly how much the States will get- or in this case, not get- in terms of general purpose grants. As I said, the Government has reneged on its previous promise to make payments to the States in the form of general revenue grants by deciding to treat 1988 as a year outside the normal triennial funding process. In the sphere of higher education this effectively means that the Government has reduced its support of State higher education superannuation schemes. The Federal Government will limit its contributions to State higher education schemes operated on an emerging cost basis. Moreover, it obliges States to make payments to the Commonwealth covering their share of higher education superannuation costs. It does so by making the payment of financial assistance under the Act conditional on such a payment being received by the Commonwealth by 31 May 1988. These are obviously very important matters in the area of education, particularly in these difficult days when people do not have the skills or education to allow them to have meaningful employment. The Federal Government wants others, namely the States, to practise what it preaches but cannot put into practice itself. I said initially that I wanted to talk a little about the situation in Queensland. Queensland has always practised spending restraint. In terms of total expenditure, Queensland stands out as the low spending State, spending 15 per cent less than the six-State average. Queensland has chosen to have a low spending, low taxing, fiscal regime relative to other States. In light of this fact, Queensland has led the way with its responsible financial management, low taxes, no petrol or other such taxes, and a willingness to place firm limits on expenditure so that year after year the Budget is balanced. However, contrary to Queensland's efforts to curb public expenditure, the Federal Government has increased its expenditure between 1982-83 and 1986-87 to the tune of 22 per cent which, incidentally, matches the very significant increase in revenues in the same period. During this same period when the Commonwealth Government's revenue and expenditure went up by 22 per cent, payments to the States grew by only 6 per cent. One therefore wonders how the honourable member for McEwen can talk in this House about responsible economic management when we have the big spending Commonwealth Government and low spending State governments such as the Queensland Government. It is not a fair spread of the burden of lowering taxation and expenditure restraint. Quite obviously, the Queensland Government stands ready to play its part in supporting the right policies to solve our national economic problems. But, as has been stated before in the forum of the Queensland Parliament, if it is only the State governments that are playing their parts this will have only a limited effect on the nation's economic ills when the real villain in the piece, the Federal Government, actually increases its expenditure outlays at the same time as it forces the States to reduce theirs. The Federal Government, through these Bills, is in effect merely reinforcing its tactic of passing the buck to the States. I want to talk briefly about the States (Works and Housing) Assistance Amendment Bill, particularly insofar as it affects the housing industry in my State of Queensland. The Bill is designed to provide a portion of the borrowing component of the State governments' Loan Council programs as concessional loans for public housing which it is envisaged will provide an incentive for the States and the Northern Territory to increase the amounts they direct to public housing. In monetary terms, this effectively means that the Bill authorises payments of $176m as a capital grant to the States and it has the effect of allowing payments of up to a maximum of $414m to the States and Northern Territory as loans for public housing on concessional terms under the principal Act. The actual amount paid in 1987-88 under the principal Act depends on the proportion that each State and the Northern Territory nominates for the purpose of public housing. Therein lies the incentive. Let me now explain why such a program is imperative to relieving a deteriorating housing situation not only in Queensland but Australia- wide. On a national scale, June 1987 saw a rise of some 12.6 per cent in lending for housing. Additionally, there was a median decrease of a quarter of one per cent in the rate of interest set in July over that set in June. On the basis of these figures, consequently for the whole of Australia, the underlying requirement for new housing is projected to increase from 138,000 dwellings in 1985-86 to nearly 160,000 for 1987-88, representing an average growth of almost 6 per cent a year. Clearly then, the national trend of lower interest rates and an increased availability of funds for housing has stimulated demand for household formation. The Queensland situation, of course, reflects this trend. The value of loans approved to individuals for the construction or purchase of dwellings in Queensland over the first 11 months of 1986-87 was $1,521.2m. This represents a 5.5 per cent increase in the value of loan approvals for the same period in 1985-86. Within Queensland alone at least $140m is available for expenditure under three types of home ownership schemes in the year 1987-88. They are: firstly, the interest subsidy scheme; secondly, the second loan scheme; and thirdly, commercial schemes. Furthermore, up to 4,000 Queensland families are expected to obtain finance through one of these schemes during the year. By virtue of the fact that the subtle increase in the availability of finance is conducive to an increase in home purchasing, pressure is obviously then redirected on to the supply of new houses. The number of new dwellings approved in Queensland during 1986-87 was 22,540, compared with 26,696 for the previous year. This substantial downturn in the number of new dwelling approvals was mainly the result of tight monetary conditions. Although some slowing in new production was expected during this 1986-87 period, activity fell well short of the underlying requirement for new housing. Unfortunately there has been significant tightening in the Brisbane rental market, with vacancy rates at one per cent for all but overpriced below standard properties. Currently, on a national scale, housing still remains relatively affordable. I note that in yesterday's Press some authorities indicated that housing is now more affordable on an Australia-wide basis than it was 12 months ago. I think there are still great difficulties out there, particularly for single income families, in affording their own homes. However, with any appreciable improvement in demand higher prices can be expected. That will just exacerbate the position. This will tend to offset the advantages of lower interest rates. Of course, many of us are not convinced that with the macroeconomic and microeconomic policies of the Hawke-Keating Government, interest rates will remain at their present level. They will probably increase because of the inability of the Government to control its expenditure and to decrease the ever-ballooning overseas debt. In addition to lower interest rates creating a greater demand for housing, which in turn forces housing prices up, the situation is further exacerbated by the sheer numbers of people actually on the housing market. Predictably, a bigger flow of people on the public housing market then forces people to be placed on a waiting list before becoming eligible to purchase a house. In a seller's market such as is the current situation, the buyers merely become the abject pawns. Public dwelling commencements are clearly dependent on both Federal and State funding programs. To be fair, these have been maintained at reasonably high levels following a substantial lift in 1982 which, of course, was in the period of the Fraser-Anthony coalition Government. Contrary to what the honourable member for McEwen said, we in the Opposition do not oppose merely for the sake of opposing. When the Government appears to be making the right decisions, we acknowledge that. I acknowledge those contributions to the States, particularly in the works and housing area. I just make the observation again that it appears to me that the Commonwealth has itself wanted to be the big spender while it has put the belt tighteners on the State governments. Year after year we debate Bills which appear to be of a machinery nature. I understand that they are important in themselves, but we are now in the modern era of communications and it appears to me that the legislative program of the Government could be improved by including a lot of these Bills in the one debate. There are some very important wider areas of debate which should be canvassed in the Parliament. We saw also that at Question Time yesterday some Ministers were obviously floundering. The new Minister for Land Transport and Infrastructure Support (Mr Duncan) did not really know anything about his department in the early days. Even yesterday, having been a Minister for four months, he had to take on notice what seemed to me to be a fairly innocent type of question. We would like to see more time devoted to questioning the Government, so we can bring it under close scrutiny, analyse its decisions and seek further information. We need a tightening of the process so that a question honestly asked receives an honest answer. That is certainly not the norm in this Parliament under the Keating-Hawke Administration. More time should be devoted to the critical analysis of matters under debate and there should be more time for things such as matters of public importance when the Government would have to be accountable, and be seen to be accountable, rather than indulging in a litany of legislative debates which, because they have been the norm ever since the Commonwealth Parliament has been part and parcel of the government of Australia, we continue with. Now we are moving to a new Parliament House, maybe it is time to encapsulate various matters into a tighter administrative arrangement and bring the Parliament more up to date by looking at some of the practices of the past. These are important pieces of legislation; I just ask why we have to spend so much time debating what I believe is but machinery legislation. Mr KERR(Denison)(10.57) —One of the two Bills being debated is the States Grants (General Revenue) Amendment Bill. We have heard in the debate the suggestion that the States are being unfairly asked to tighten their belts. But I want to reflect briefly on what I believe to be one of the great mysteries of the recent Federal election, because it impacts directly on what has been a quite distorted and perhaps even hypocritical response by Opposition speakers to this legislation. The fact is that in the recent Federal election campaign spokesmen for the Opposition parties were counselling 16 per cent cuts across the board to programs which they now say require additional expenditure. One of the great ironies of the Tasmanian election campaign was the performance of the State Premier, Robin Gray. There is a famous book about the great detective Sherlock Holmes, who solved the riddle of one important case by looking at the dog that did not bark. The clue in that detective novel was that a dog failed to bark in circumstances where one might reasonably have expected it to bark very loudly indeed. In the context of the Tasmanian election, the dog that did not bark was Robin Gray. The Premier of Tasmania wanted a Liberal Party win like he wanted terminal cancer. That was because spokesmen for the Liberal Party, for the Opposition, were on record as saying that State grants would be cut. The present Liberal shadow Treasurer came to Tasmania and went on record as saying that State funds would be cut. Even he refused to specify the amount, but a 16 per cent across the board cut would have amounted to something in the order of $145m being slashed from State expenditures. In Tasmania, where Commonwealth expenditure constitutes 52 per cent of total Budget funds and all loan funds, such a threat to the fundamentals of Tasmania's economy was obviously something that terrified the Premier. The clue to the reason why Labor was so successful in the last election lies in the fact that the State Premier was silent throughout the election campaign, failing entirely to support the Liberal coalition. But now, after the election, Premier Gray becomes rather more vocal. He continues the tradition of Tasmanian governments of a Liberal persuasion of blaming the Commonwealth whenever the State Government seeks to set aside its own election commitments whilst seeking credit for projects into which it has put no funding whatsoever. A very interesting double, if I may say so, is the twin examples of the Claremont senior secondary college-on which the Tasmanian Government has sought to blame the Commonwealth for its failure to proceed with its own election commitments-and the opening of the Davey Street extensions, a project which involved a commitment of some $7m of Commonwealth funds and a pittance of State funds. Those two examples reveal something about the reason Tasmania finds it so difficult to have a credible and respected voice that is listened to by the Commonwealth Government. I have already raised the matter of the Claremont senior secondary college by asking questions of the Minister for Employment, Education and Training (Mr Dawkins). Following the recent Federal election, the State Minister for Education and the Premier took the opportunistic approach of seeking from the Commonwealth Government special funding for a project which had been a leading promise of the State Government in its 1985 election campaign. Indeed, the State Government had gone to the extent of bringing in bulldozers, levelling the site and putting up signs saying that a new Claremont senior secondary college would be built on the site, courtesy of the State Government. Of course, the State Government never intended to proceed with such a construction, and although it made a number of commitments and reasserted those commitments at all stages during the Federal campaign, immediately after the election we found that the project had disappeared from the Tasmanian Government's program entirely. The Premier and Treasurer of Tasmania says in his Budget Speech that his Government has not proceeded with this college because of a shortfall in Commonwealth funding. As the Minister for Employment, Education and Training has responded, very properly, priorities for educational funding are entirely a matter for State governments. The fact is that the Tasmanian Government has been allocated $4.6m in this year for capital funding for schools, and not one dollar of that has been used either in planning or in the first stage construction of a school that the State Government at the time of its election had suggested to the people of Denison was its first priority. Contrast that irresponsibility shown to a sector of the community in very great need with the manner in which the State Government has dealt with road funding. As part of the bicentennial road development program, the Commonwealth Government made available to the State over $6m to upgrade a very difficult section of road leading from the eastern shore to the city, which caused traffic jams and problems for commuters. Although almost all of the funding for that project was provided by the Commonwealth, the State Government decided to usurp any recognition of that contribution by holding its own private opening ceremony before the joint ceremony. Two months ago the State Government sent two of its Ministers to press a button to operate a set of lights and get the traffic flow moving. That was done without any recognition of the Federal contribution. Subsequently, last week, the Federal Minister was in Hobart to launch that road project formally. It was not just the Federal Minister who was snubbed by the State Government but also the Lord Mayor of Hobart, who expressed her view that it was somewhat disquieting that although she was on the platform for the official opening she was surprised that she had not been present at the earlier purported opening. Hypocrisy of this kind makes it very difficult for spokesmen such as I who seek to speak out for the real problems in Tasmania because the legitimate concerns of Tasmania are often clouded by the distortions that are built into practices of that kind: practices that seek to blame the Commonwealth when the State fails to accept its responsibilities, practices when the State seeks to accept the entirety of the credit for projects that are substantially funded by the Commonwealth. It is important in the context of discussing the funds made available to the States to recall that the object of the reduction in demand for the government sector was agreed to by all of the Premiers at the Premiers Conference. There was a national agreement that it was important for the Commonwealth and the State governments to reduce their claims on the financial resources of the country in order to sustain the lowering of interest rates that has occurred in recent times. But today we have heard a suggestion that the burden has unfairly fallen on the States, that they have been unfairly asked to take too great a share of the financial burden. The reality is, however, that the States have been increasing State taxation at a very substantial rate. Let us look at the picture in Tasmania. The Tasmanian Treasurer has increased taxes by 37 per cent over two years. This year there has been a 15 per cent increase in taxation. It is most severe and is certainly well above any taxation increase imposed by any other State. I note in this regard that my colleague the honourable member for Franklin (Mr Goodluck), who continually bewails the price of petrol, should pause to reflect on the fact that the reason why Tasmania's petrol is significantly more highly priced than petrol in certain mainland States is a State duty on petrol of 7c a litre. In Tasmania, Commonwealth revenue has declined. It has declined in a way that the Premier acknowledged to be fair; in a way that the Opposition said at the most recent Federal election was insufficient. In practice $42m has been lost to general revenue in Tasmania but, by contrast, tax receipts by the Tasmanian Government have gone up by $80m. In other words, having lost $42m in general revenue for two reasons-the general Commonwealth reduction and the effects of the Commonwealth Grants Commission on bringing about fairer relativities between the States-the Treasurer and Premier of Tasmania has remedied that deficiency by taking twice that amount in taxation. He has not just brought revenues up to what they would have been otherwise but to twice the amount. That has occurred in a circumstance in which, clearly, the State Government is now seeking to set aside hidden funds, hidden reserves, to cushion itself against future election commitments that it may intend to make. I invite those who are interested in looking at the details to look at page 114 of the Budget documents of the Tasmanian Parliament and to consider the hidden figure of $29m which has been plainly set aside, outside any disclosure by the Tasmanian Government. It is obviously intended for political purposes. The brutal reality is that the Tasmanian Go-vernment is one of the most political governments in Australia. It is crudely discriminating against the south of the State in favour of the north. Over two-thirds of funds allocated in capital works for education and health services have gone to the north, rather than the south, of the State. This reflects the clear political priorities of the Premier and his concession, in a political sense, that he has lost support in the south of the State and will do anything to shore up his support in the north. I regard it as a real tragedy that those who went to the last election on a program of slashing social expenditures-16 per cent cuts across the board-have to this date failed to condescend to give any particulars. They have totally failed to detail to this Parliament the cuts they would now make or the measures they would take. We continue to hear the simplistic nostrums of the New Right-slashing taxes, slashing social services-and the failed rhetoric of those who would seek to expose Australia even further to the rigors of the free market. We have heard a lot about exposing ourselves to what is said to be the discipline of the free market. But surely after the experiences of the last couple of days, even the most ardent free market supporters are grateful that the mechanisms which were put in place by State intervention following the 1930s are still here. Compulsory State intervention has made certain that the banks must have adequate arrangements to protect depositors, arrangements that make sure that networks of social services are in place so that the processes that might otherwise have been unleashed on this country and on the international sphere are ameliorated and mitigated. We still have the crude nonsense of the Leader of the Opposition (Mr Howard) who, in his first response following the Wall Street crash, sought to raise the spectre of wage reductions in a context where plainly the further cutback of domestic demand would only plunge the eco-nomy into recession and would move us to a prolongation of whatever effects are likely to arise from the recent disturbing events in the stock markets. Certainly, no one would pretend that we now have sufficient information before us to know whether the events of recent days have blown themselves out, whether they have stabilised or whether the market will recover. One can only hope that there will be a substantial recovery in the market place as soon as possible because one of the significant effects of a substantially reduced market would be that investment in the kind of processes we need to revitalise our economy would be less likely. Reduced prices of equity capital would tend to mean that investors inclined to make investment decisions would choose to buy existing equity rather than the new plant and new equipment which is necessary to restructure our economy and to continue the process of bringing it into a competitive edge with the rest of the world. I conclude my remarks by saying that I find it extraordinarily disappointing that this debate has been conducted in such broad generalities in a context in which the Opposition appears to be ostrich-like, unable to realise that its failed nostrums have been rejected by the Australian public. It has not come to terms with the impact that the discredited rhetoric and nostrums of the New Right would have had on the Australian domestic economy. Even the Tasmanian Premier, the Liberal Party's only State Premier, failed to support the Opposition because of those very policies. I return to where I started in this debate and the point that I made: there is only one side in this House playing the game and that is the Australian Labor Party which is seeking to place the economy in an ordered way so that it can face up to the rigors and disciplines of our new investment environment. Mr CADMAN(Mitchell)(11.16) —We have just heard an interesting speech from the temporary honorary member for Denison (Mr Kerr), who is keeping the seat warm until Michael Hodgman gets back here. This House awaits the day of Michael's return so that the State of Tasmania will have full, effective and proper representation. We have in the chamber the honourable member for Franklin (Mr Goodluck), a man who is dedicated to the real interests of Tasmania. I suggest that if the honourable member for Denison were really committed to Tasmania, as he claims to be, he would have nothing to do but support Robin Gray. The Tasmanian Premier has done more for that State than any Premier in its history and the way in which this Labor Government in Canberra has tramped over the State's rights of Tasmania is disgraceful. The economic problems that may be present in that State have all been caused by the gross uncertainty and unfairness-the victimisation of that State-created here in Canberra. I see that the honourable member for Bass (Mr Smith) is in the chamber and he is nodding in agreement. I know that these two fine members from Tasmania-the honourable members for Franklin and Bass-are right behind Robin Gray and what he has achieved despite victimisation from Canberra. It is a real record of effective and efficient economic management by a State government. If those same principles that are being exercised in Tasmania were to be exercised by the Labor States in Australia we would see quite a different scene. The honourable member for Denison spoke about hollow logs. The hollow log in New South Wales contains more than $2,000m. That money has been tucked away by Barrie Unsworth and his mob to bring out at any time they wish to do so. That is a disgraceful way of managing a State. In order to look at States grants and the management of the economy one needs to spend a brief time looking at the Federal scene and then seeing how that is related to the finances of the States of Australia. The Federal Government has had a difficult time and continues in a difficult time because it has failed to take notice of the advice that it has been given by a wide range of people. For instance, its own bank, the Commonwealth Bank of Australia, in its economic newsletter of August this year states: Due to the magnitude and intractability of the problems Australia faces, this two-pronged approach, at both the macro and micro level, is essential if the necessary structural adjustments are to occur. Even with this comprehensive policy approach, turning around the current account deficit (which was $13.6 billion in 1986-87) and bringing the foreign debt position into balance (net foreign debt was $84.5 billion in March 1987) will take a considerable time. The Commonwealth Bank is saying to the Government that its management technique has to be very careful and restrained. That publication came out prior to the last Budget. It is interesting to note that the comments of the Commonwealth Bank are endorsed by Westpac Banking Corporation in its newsletter of August 1987 when it said: To ignore the opportunity to reduce the deficit further would be a mistake. Another summary says: . . . a radical attack needs to be made on all aspects of business life which retard economic performance. Westpac has also issued a warning to the Commonwealth Government which was ignored in the opportunity of the Budget. Westpac said: An essential for longer-term economic performance will be a revival of investment spending. In the year to March 1987, spending on new plant and equipment fell by over 3 per cent in real terms and a further real decline could eventuate in 1987-88. That is the framework of the Budget. What did the Commonwealth Government do in response to the warnings it was receiving right across the board from all sectors of the community as to how it should manage the then forthcoming Federal Budget? What it did, of course, was to increase its own outlays and cut the outlays to the States. One could say that that was a political approach that would retain the popularity of the Federal Government. That is not so. A government in its first term of office has a one-off opportunity to take serious and proper decisions. Those opportunities have been missed and they are lost. The occurrences of the last couple of days in the stock markets of the world underline the significance of a Federal Budget of the type suggested by economic advisers. That chance has been lost and the poor circumstances in which Australia finds itself have been exacerbated by the failure of this Government to apply itself rigorously to economic management and its own expenditure. For instance, in the Budget outlays for this year the Commonwealth Government expenditure is up by a total of 4.3 per cent to a total figure estimated at roughly $78 billion. The areas in which the Government chose to increase its own expenditure are interesting. Basically, it increased its expenditure in the Department of the Prime Minister and Cabinet. The Prime Minister (Mr Hawke) is running the Bicentenary and keeping an eye on everybody else. The Parliament received some increase but the economic areas that were necessary for the Government to pursue, in order to provide a dynamic approach to an economy which was failing and uncompetitive, can be summarised by the failure of the Government to inject funds into productive areas such as transport, communications and defence. Those areas were the real losers in the Federal Budget. The real winners were areas that were not really significant for economic sustenance, output and growth. The Government's Budget produced a phoney deficit. The real deficit of $1.5 billion is the right figure. On top of that, the Government increased its outlays into areas that are not of economic significance for the future of Australia. The House would be aware that in that same Budget comparisons were made between total Government outlays over a period. I draw to the attention of the House the fact that in the last 20 years total government expenditure has increased more than 15-fold from about $7 billion in 1966-67 to a massive figure in 1986-87. If one looks at this expenditure in constant terms one will see that over the last 10 years Commonwealth expenditure has increased by 30 per cent above inflation. So we have had inflationary increases in government expenditure plus an additional 30 per cent increase. That is profligate spending by the Commonwealth Government. I refer the House to table 3 of Budget Paper No. 1, which clearly sets out the massive 30 per cent increase in constant terms in government expenditure over inflation over the 10-year period. What has the Government done to the States? This legislation is connected with the funds provided by the Commonwealth for State government expenditure in the current year. Budget Paper No. 4 provides some of the details. The total increase in expenditure for State governments, that is, by borrowings and by way of grants, is 2.4 per cent, half of the increase the Government has allocated for itself. I have no problem with the smaller increase in the allocation to State governments. Great concern has been expressed at the Commonwealth level about the accountability of State governments for their use of the funds they get from the Commonwealth and for the way in which those funds can be siphoned off or allocated in a notional way. All the Commonwealth requires is an Auditor-General's certificate. I have no problem with the 2.4 per cent increase to State governments this year. What I have a problem with is the fact that the Commonwealth was prepared to cut State government expenditure but was not prepared to do anything about its own expenditure. An analysis of expenditure by the Commonwealth in the form of specific purpose grants to the States indicates that again in areas of economic importance the State governments have had their allocation reduced. There is a 16 per cent real reduction in the allocation for housing and community amenities and a 0.3 per cent increase in the allocation for transport and communication, a line ball situation. In real terms it is a decrease. There is a decrease of 24 per cent in the allocation for industry and development, a 26 per cent reduction in the allocation for labour and employment, and a reduction of 42 per cent in the allocation for other economic services. So the Commonwealth Government is screwing down the States in areas of economic productivity and economic importance, blowing out its own Budget and claiming more tax from pay as you earn taxpayers and small business but failing to cut its own outlays. One must note the favouritism that is reflected in these allocations-in the massive reduction of assistance to the Northern Territory, which is deplorable. On the same political basis, Tasmania has been selected by the Commonwealth Government for damaging cuts. But the Northern Territory and Tasmania have capable managers. They will live with the cuts that have been made. States such as New South Wales scream and claim that they cannot live with the reductions that have been made. State and local public authorities currently constitute about 40 per cent of the public sector and account for about 22 per cent of the gross domestic product. They are also responsible for about 40 per cent of the national public sector debt and about 60 per cent of overseas borrowings. They are big business and they need to be accountable. The Government has reined in expenditure to those States mainly in economic areas where there would be some economic flow on. State governments obtain about half of their revenue from the Federal Government. The rest they raise themselves. The lack of accountability State governments have to the Commonwealth is a matter of some concern. It has been estimated by the Australian Chamber of Commerce that in New South Wales the total hollow log, the largest holdings by any State government available for use but tucked away in reserve, is probably about $2,096m. The total of the hollow logs around the States is about $5,230m. That is a lot of money to be lying at the beck and call of State governments. The accountability process for State governments needs to be improved. It has been a constant problem for the Commonwealth. The Commonwealth must either make the States responsible for their own revenue raising or have a better accountability process. The reduction in the Budget of the allocation to State governments comes on top of the lavish spending programs of some State governments. Instead of concentrating their effort on economic output, governments such as the New South Wales Government choose to provide entertainment centres and lavish and expensive projects such as the Darling Harbour project. The state of roads and hospitals in New South Wales is deplorable. In our own western Sydney area there are empty beds in Westmead Hospital. Ward after ward has been closed in Westmead. This is the Yes, Minister concept: if one does not open a hospital it is cheaper than opening it. So there are empty beds with patients clamouring for attention but nobody to provide the care that is needed. In the Mount Druitt Hospital, right in the centre of a massive and growing area, there is not even a maternity ward. The planning of the New South Wales State Government for health services in the State is absolutely dreadful. Mr Price —That was planned by the Liberal Government. Mr CADMAN —That is an interesting interjection. When the Liberal Party claims the planning and development of Westmead the Labor Party says, `That was all Labor Party'. It is wrong on both counts. The health services of western Sydney, in that fast growing area, are deplorable, as are the conditions of roads. Yet the State Government of New South Wales, pandering to its mates, to those people who selectively support and donate to the Labor Party in New South Wales, has chosen to deny opportunity to the people of western Sydney, to deny essential services and to roll all their money into the circuses it is providing in central Sydney, such as entertainment centres and the Darling Harbour project. It is an incredible way of managing a State. The Government of New South Wales will certainly get the result it deserves at the next election. It will lose, and lose massively, mainly because it will be voted out of office by ordinary tax paying citizens paying who want to see some return for it in the community where they live and not see it floated off into grandiose projects which support the ego of the Premier of the day but which are of benefit to few people. The Commonwealth has reduced expenditure to the States but has not reduced its own expenditure. This is a serious situation. The Government would do well to take note of the need for immediate economic adjustment. It needs to rein in its own expenditure. It needs to look at where it is putting money. Australians are paying far too much in taxation for what they are getting back. This year every Australian worked from 1 January to 9 June just to pay the Commonwealth bill. The rest of the year they had to themselves. So for almost half the year total government expenditure was provided by Australians working. That is not the way to run Australia, with the difficulties we face at the moment. The average family is paying heaps more in taxation. I remind the Government of the election campaign in which it was clearly indicated-it was never denied by a single Government spokesman-that every family in Australia paid $37 a week more in tax after the Labor Party was elected in 1983. That is the way to destroy the will and the commitment of Australians. I call on the Government to change radically its process of evaluation of State programs or give the States their own revenue raising processes, and to reduce its own expenditure. The Hawke Government made heaps of promises and has broken nearly all of them. The Hawke Government said that it would not have early elections, that there would be no capital gains tax, that interest rates would fall after the 1984 election, and that the one per cent levy would be sufficient for Medicare. It is grab, grab, grab all the time by this Government. It is prepared to put restrictions on State and local authorities, but none on itself. I appeal to members of the Australian Labor Party: now is the time for a bit of discipline among your ranks so that you can bring this nation under effective management. The Labor Government has not endeavoured to do that. It is prepared to allow the Prime Minister-whose name, from what I read in the Press, is O'Hawke rather than Hawke-merely to be popular, and it is time Labor members disciplined him. He wants popularity for the sake of it and has no sense of responsibility. Mr Tuckey —They cheer him at football over there. That is why he likes it. Mr CADMAN —Yes, they cheer him at football, but he has to go to Ireland to get a cheer because he would get only raspberries in Australia today. I cannot find a person who voted for the Prime Minister because people are sick and tired of the populist approach instead of a responsible approach. It is time that this Government became rigorous, dedicated and efficient in its management. Mr DEPUTY SPEAKER(Mr Blanchard) —Order! The honourable member's time has expired. Mr PETER MORRIS(Shortland-Minister for Resources)(11.37) —It was fascinating to hear the remarks of the honourable member for Mitchell (Mr Cadman). He was a member of the Government of the day that gave this country the worst unemployment, the highest inflation, the highest interest rates ever in the history of this country. But this morning the honourable member said in the earlier part of his speech, `Why should not this Government be providing more for Tasmania and more for the Northern Territory?'. Mr Tuckey —Mr Deputy Speaker, I raise a point of order on the matter of relevance. The Minister is not talking about this subject, but he is the bloke who did the deal with Amann Aviation. He has no credibility at all-none. Mr DEPUTY SPEAKER —Order! There is no point of order. Mr PETER MORRIS —Mr Deputy Speaker, I do not propose to grace the honourable member by responding to that kind of comment. The facts stand for themselves and one has only to refer to the Hansard. This morning the Opposition complains as to why more money is not being provided by this Government for the State of Tasmania and for the Northern Territory. This afternoon Opposition members will be complaining that too much is being spent. By tomorrow morning we will be told that the deficit is too high and should be lower. But what Opposition members seem to forget is that only weeks ago their proposals were put to the community and rejected. Mr Cadman —We got more votes than you did. Mr DEPUTY SPEAKER —Order! Mr PETER MORRIS —That is the test and the assessment-the ballot box. Mr Cadman —More Australians agreed with us than agreed with you. Mr DEPUTY SPEAKER —Order! The honourable member for Mitchell has had his opportunity to debate the issue. Mr PETER MORRIS —The honourable member for Mitchell is sitting where the people of Australia put him; that is their judgment. I note that the Opposition does not oppose the legislation before the chamber. I thank those members who have participated in the debate and for the manner in which they have facilitated the passage of this Bill. I suggest that the question be decided. Question resolved in the affirmative. Bill read a second time. Message from the Administrator recommending appropriation announced. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Peter Morris) read a third time. Debate resumed from 15 September, on motion by Mr Holding: That the Bill be now read a second time. Mr PORTER(Barker)(11.41) —I move: That all words after `That' be omitted with a view to substituting the following words: `whilst not opposing the provisions of the Bill, the House condemns the Government for the delay in the re-institution of negative gearing and for the pursuit of economic policies which have: (a) forced a record number of over 161,000 Australians on to public housing lists. (b) resulted in a long period of record high interest rates, and (c) resulted last year in the lowest number of housing starts for the last 20 years excepting the drought year of 1982-83'. This amendment has been circulated and I look forward to hearing the Government's response to the comments I raised in the cognate debate. There is a crisis in housing in this nation at the moment. There is a record number of people on public housing waiting lists, a record number of people waiting for home purchase assistance under State schemes, yet the Government is now cutting public housing and capital funding by $468m. There have been record high interest rates, the lowest number of housing starts last year for 20 years, bar the drought year of 1982-83, and according to the Indicative Planning Council for the Housing Industry the number of housing starts this year is expected to fall between 32,000 and 42,000 houses short of the expected demand. We know that home owners are now paying up to 17 per cent more of their income on mortgage repayments than they were a decade ago. This Government's record on housing is a disgrace. Much needs to be done, and I look forward to a response from the Government as to the changes in economic policy that it will make to address the drastic needs facing home buyers, especially young home buyers, in this nation. Mr DEPUTY SPEAKER —Is the amendment seconded? Mr Tuckey —I second the amendment. Question put: That the words proposed to be omitted (Mr Porter's amendment) stand part of the question. The House divided. (Mr Deputy Speaker-Mr C. A. Blanchard) Ayes . . . . . . . . . . . 64 Noes . . . . . . . . . . . 52 —— Majority . . . . . . . . . 12 —— Baldwin, P. J. Kerr, D. J. C.Beddall, D. P. Klugman, R. E.Blewett, N. Lamb, A. H. (Teller)Brown, Robert Langmore, J. V.Charles, D. E. Lavarch, M. H.Chynoweth, R. L. Lee, M. J.Cleeland, P. R. Lindsay, E. J.Courtice, B. W. McHugh, J.Crawford, M. C. McLeay, LeoCunningham, B. T. (Teller) Martin, S. P.Darling, E. E. Milton, P.Dawkins, J. S. Morris, AllanDubois, S. C. Morris, PeterDuncan, P. Mountford, J. G.Fatin, W. F. O'Keefe, N. P.Fitzgibbon, E. J. O'Neil, L. R. T.Free, R. V. Price, L. R. S.Gayler, J. Punch, G. F.Gear, G. Saunderson, J.Gorman, R. N. J. Scholes, G. G. D.Grace, E. L. Sciacca, C.Griffiths, A. G. Scott, J. L.Hand, G. L. Snow, J. H.Harvey, E. R. Snowdon, W. E.Hayden, W. G. Staples, P. R.Holding, A. C. Theophanous, A. C.Hollis, C. Tickner, R. E.Howe, B. L. Uren, T.Jacobsen, C. A. West, S. J.Jenkins, H. A. Willis, R.Johns, G. T. Wright, K. W.Kent, L. Young, M. J. Adermann, A. E. Katter, R. C.Aldred, K. J. Lloyd, B.Andrew, J. N. (Teller) McArthur, F. S.Beale, J. H. MacKellar, M. J. R.Blunt, C. W. McVeigh, D. T.Braithwaite, R. A. Macphee, I. M.Brown, N. A. Millar, P. C.Burr, M. A. Moore, J. C.Cadman, A. G. Nehl, G. B.Cameron, Donald Peacock, A. S.Carlton, J. J. Porter, J. R.Cobb, M. R. Prosser, G. D.Connolly, D. M. Reith, P. K.Cowan, D. B. Robinson, IanDobie, J. D. M. Rocher, A. C.Downer, A. J. G. Ruddock, P. M.Edwards, Harry Shack, P. D.Fife, W. C. Sharp, J. R.Fisher, Peter Sinclair, I. McC.Goodluck, B. J. Smith, W. L.Hall, Steele Spender, J. M.Halverson, R. G. Tuckey, C. W.Hawker, D. P. M. White, P. N. D.Hewson, J. R. Wilson, I. B. C.Hicks, N. J. (Teller) Woods, R. L.Jull, D. F. Wooldridge, M. R. L. Jones, Barry Shipton, R. F.Duffy, M. J. Fischer, TimCharlesworth, R. I. Cameron, EwenBeazley, K. C. McGauran, P. J.Edwards, Ronald Hunt, R. J. D. Question so resolved in the affirmative. Original question resolved in the affirmative. Bill read a second time. Message from the Administrator recommending appropriation announced. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Peter Morris) read a third time. Debate resumed from 23 September, on motion by Mr Kerin: That the Bill be now read a second time. Mr SMITH(Bass)(11.53) —The Petroleum (Submerged Lands) Legislation Amendment Bill proposes a number of amendments to the Petroleum (Submerged Lands) Act and related Acts. This is almost a matter of `Here we go again', because this is the legislation that seeks to change the cash bidding legislation. This saga began in 1985. With the support of the Australian Democrats, an amendment was put through then to provide that there be a two-year trial period in highly prospective territory of the Ashmore and Cartier Islands adjacent areas with regard to the cash bidding legislation. Clause 19 of this Bill seeks to remove that sunset clause. It is interesting to reflect that the Democrats were originally against the whole concept of cash bidding-which I shall talk about shortly-but at the last moment they put forward the sunset clause, which got through the Senate. Although we will have to wait and see what happens in the Senate, I understand that the Democrats will now join with the Government to allow this legislation to go through. It is my view, and the view of the coalition, that this is a black day for oil exploration in Australia, because it will become a thing of the past if this legislation goes through. I hope that the Democrats will reconsider their position. The arguments outlined by the coalition back in 1985, when the Government introduced the Petroleum (Submerged Lands) (Cash Bidding) Amendment Bill, have changed little. In fact, the continuing downturn of off-shore oil exploration and development since then further strengthen our arguments. When that Bill came in in 1985 the coalition parties rejected the notion of cash bidding for oil exploration. We argued then, as we do now, some major points and, if anything, those points have greater credence today. Cash bidding is an upfront impost dressed up as an auction system for the right to undertake the risk of exploration. The work program which applies to the bulk of applications for oil exploration permits has successfully operated for years and is the most equitable means of allocating off-shore exploration permits. Smaller companies, of which there are a great number involved in exploration in Australia, will not be able to finance their offers or their payments at a cost equivalent to that of larger companies. Cash bidding, in combination with the resource rent tax, which interestingly is being introduced into the House this afternoon, in legislation which is also coming back again after being previously rejected, would be a disincentive to oil exploration. It was argued then, and is now, that both seek to capture the same economic rent-the resource rent tax from the production phase where the end value is known, and cash bidding from the exploration phase where the end value is unknown. Unlike the Government, we recognise that Australia can ill afford the diversion of high cost risk capital from exploration budgets. The coalition also believes that the revenue raised from cash bidding is likely to be far less than that from taxes on production. The cash bid concept is linked to high prospectivity. However, it is widely recognised that Australia is not prospective enough to warrant cash bidding. The coalition argues that the Government's paramount objective is to raise revenue and not, as is claimed, to assist off-shore activity. Indeed, it is interesting to look at some international experience with cash bidding and to see what was said as long ago as 1985 in the Oil and Gas Journal, an international journal. It talked about Senator Evans, who originally proposed this legislation, and about what had happened in the United States of America, the United Kingdom and Canada. It stated: The U.K. nearly squeezed the life out of all but the biggest North Sea fields until it eased its tax loads on operators. Canada's industry was all but shut down until recently by an onerous energy program that kept offshore activity alive only by virtue of frontier subsidies. And U.S. cash bidding is such a triumph that the U.S. has managed to lease all of 20% of its federally owned offshore in 30 years, has tried for the last decade to find some other leasing method, and has shut industry out of some of the most promising acreage on the whole Outer Continental Shelf. Tellingly it then stated this: Governments get into trouble with offshore programs when they forget that the reason for granting exploration rights is to accommodate exploration-not to enrich national treasuries or to cater to antidevelopment interest groups. It is quite clear that the reason for this legislation is to raise revenue. It ignores the real need to ensure that exploration in this country continues. Interestingly, I will seek leave of the Minister for Resources (Mr Peter Morris), who is at the table, to incorporate a graph in my speech later. Perhaps the Minister can have a look at it in the meantime. Since the introduction of cash bidding exploration we have seen the number of exploration wells decline. Only 44 wildcat wells have been drilled in the past 30 months, compared with 47 in 1983 alone and 32 in 1985. While part of this fall can be attributed to a decline in oil prices, the application of cash bidding will not, the industry warns, help to overcome this clearly undesirable trend, and will in fact accentuate it. The inability of the Government to accept that there is a relationship between tax levels, especially those imposed before exploration has begun, and exploration activity and discovery is of particular concern, given the rapid decline in the ability of domestic crude oil supplies to meet domestic demand. No one denies the community the right to a return from the development of community owned natural resources. But this particular well is running dry as a source of government revenue. This legislation demonstrates the Government's ignorance of oil exploration financing mechanisms in its grasp for revenue. Indeed, referring again to international experience, the Government seems to have ignored that as well. The Government seems determined to kill the goose but not before it has extracted its pound of flesh. We as a nation will regret this legislation if it goes through. The coalition opposes the whole concept of cash bidding. The industry, represented by the Australian Petroleum Exploration Association Ltd and the Australian Institute of Petroleum Ltd, opposes it also. The Northern Territory Government opposes it. The West Australian Labor Government opposed it in 1985. It is most interesting that we have not heard from Premier Burke about this legislation. It is very puzzling to know why. With regard to one of the other amendments in this legislation, Western Australia has a special arrangement existing at present, and that will be changed. It is surprising that we have not heard from Premier Burke. The Western Australian Liberal Government in 1980 agreed to it only on the basis of special arrangements which applied to Western Australia and the Northern Territory; this Bill seeks to remove those special arrangements. The present Liberal Party of Australia in Western Australia is totally opposed to the removal of the special arrangements. Indeed, its Deputy Leader, Mr Richard Court, has made that perfectly clear on many occasions. But, as I have said, we have not heard a word from Premier Burke. Under the arrangements relating to the joint authority set in place to determine a lot of the issues involved with off-shore exploration, any problems were to be resolved on a Premier-Prime Minister basis. That has now been removed. One may well speculate that that is because Mr Burke no longer gets on well with the Prime Minister (Mr Hawke). As I have said, the Democrats initially opposed the whole concept of cash bidding and proposed the sunset clause which this Bill also seeks to remove. Where is the general support claimed by the Minister for Primary Industries and Energy (Mr Kerin)? It is regrettable that he is not here today. I know that the Minister for Resources is here; he has some joint responsibility in some of these areas. But this is a very significant and important Bill. The amount to which we in this country rely on petroleum duties for revenue is excessive. I know that the honourable member for Franklin (Mr Goodluck), who will be speaking in this debate, will allude to that. I add, by way of information to the House and to those people who will read the Hansard, that the honourable member for Franklin has been a tireless fighter on the whole issue of petrol prices, trying to protect the little people, who will be the ones who will suffer if we have to import oil in the future. I know that many people have heard the honourable member for Franklin speak previously-indeed he spoke most eloquently yesterday-on the whole issue of petrol prices. I am sure that those who take the time to listen to him will learn a bit more about the very detailed and complex issue of petrol prices. That in itself is one reason why the Minister for Primary Industries and Energy ought to be here. These issues are complex; they are detailed; they are not matters that ought to be just slipped through the House without his presence and without his contribution to the debate. Where is that general support? It does not seem to be there. The Government says that it has reviewed the effectiveness of cash bidding. It says that it rejects the concerns expressed by the oil exploration industries, the States and the Northern Territory. One wonders what kind of review could be achieved in the short time that cash bidding has been operating. The review, done only one year after cash bid permits were granted, could hardly pretend to examine adequately the effect of cash bidding on exploration activity, or indeed be sufficient for the system to be well understood by the bidders themselves. If anything, what the Government ought to be doing is extending the sunset clause. I asked the Minister in a letter whether I could look at the review upon which he has relied and to which he referred in his second reading speech. It is really a rather pathetic document. It goes for about four or five pages and does not tell us anything. It relates the arguments that were put originally against cash bidding; that is about all it does. It makes assertions that we ought to have cash bidding because in effect we need the revenue. As I said earlier, what will happen is that this Government will get into trouble because what is important in the oil industry is that we facilitate exploration, not look at oil exploration activity as a mechanism to enrich national treasuries. The Government, in introducing this Bill, appears to miss the very real crisis that will soon face Australia in the form of massively increasing oil import bills. I do not know whether Australians are aware of the crisis that awaits us a little further down the track. We all know what is happening today. But any government is entrusted not only to look after the issues of today but also to think about what will happen tomorrow. This Government does not appear to be thinking clearly or strategically about the very difficulties that we will face in the oil industry in the years ahead. World oil prices are low and uncertain. Australia's known petroleum reserves are declining, and petroleum exploration is severely cut back. In this environment it is particularly important to ensure that the tax system does not continue to make petroleum exploration and development projects unattractive relative to other investment opportunities in Australia, or relative to petroleum exploration development in other countries. The latter is already happening. A recent report in the Australian had an interesting headline `Oil groups pump up to $180m offshore'. Australian companies are going off-shore. They are going to other countries, rather than to Australian territorial waters, to explore. I quote from the article: Among the companies recently announcing the acquisition of US gas or oil interests are Lennard Oil NL, Lakes Oil Ltd, Peko Oil Ltd, Stirling Petroleum NL, Bligh Oil and Minerals NL, BHP Petroleum Pty Ltd, Barcoo Petroleum NL, Orca Petroleum NL and Bridge Oil Ltd. The article goes on: One of the biggest overseas commitments has been made by Peko Oil Ltd which, according to the group executive . . . is hoping its US base of oil reserves can be doubled or tripled in the next six months. So we have $180m of Australian equity being spent in the United States-not here-looking for oil. That money is lost to us. We have to make sure that we can make it attractive for them to be spending those exploration dollars here wherever we possibly can. I know that the issue is complex and all of us would accept that, but it is intriguing to see what is happening. I would like to quote from another interesting article in the Australian Financial Review today because it indicates the thinking of some of the Australian companies. Mr Jamieson of Orca Petroleum, one of those companies that are going off-shore, is quoted as saying: Access to international acreage is much more attractive in highly prospective areas compared with Australia, chances of discovery are better and exploration costs-particularly in the US-are much lower. It is also going to be active in Colombia in South America. The problems of the lack of prospectivity in this country, the costs of exploration and the very large distances that are involved in getting any finds to markets have to be taken into account and be factored into possible activities by companies when they are assessing the financial viability of a search. If we put in place a taxation regime that works against the activities of Australian companies we are working against our own best interests. In time, when the Bass Strait oil fields, which are declining, finally dry up we will end up having to import oil. I will make some remarks about what that will do to our economy if that trend continues. We are denying Australia the capital necessary to find those additional reserves of oil. This outflow of funds does considerable damage to our balance of payments. The Government also appears to ignore the fact that off-shore exploration has failed to find an oil field in excess of 50 million barrels and that Australia needs to find the equivalent of two to three such fields each year if it is to maintain liquid fuel self-sufficiency at 50 per cent by the year 2000. We have not found a field of 50 million barrels and we need to find that equivalent of two to three a year if we are to maintain self-sufficiency given that the Bass Strait fields are declining. I do not know whether the cash bidding legislation and the RRT legislation, which I understand is coming in this afternoon, have changed in form from what was originally proposed-I suspect that they have-but I would like the Minister for Primary Industries and Energy to tell me how this legislation is going to enhance the opportunity for us to find those 50 million barrels when we have Australian companies going elsewhere to look for oil. One must accept that we do have a degree of prospectivity. I seek leave to have a graph incorporated in Hansard. Mr DEPUTY SPEAKER(Mr Ruddock) —I understand that the document depicts a graph and not a table. Graphs cannot be incorporated. The honourable member could seek leave to table it. Mr SMITH —I seek leave to table the graph. Leave granted. Mr SMITH —If we look at the exploration levels that have been taking place in Australia in terms of dollars invested, we will see that in 1983, $520m was spent; in 1987 it is estimated that only $137m will be spent. If we look at this table graphically-I can see the Minister for Defence Science and Personnel (Mrs Kelly), who is at the table, looking at it in a very puzzled way-we can see that we really have a major problem in front of us. With known reserves of crude oil now around 1.9 billion barrels, at current annual rates of consumption of some 170 million barrels, the demonstrated economic reserves here in Australia will last only another 11 years. So a little further down the track we face a window of crisis in this country in terms of self-sufficiency in oil. We must be thinking about that today when we are putting into place taxation mechanisms that apply to the oil industry. Exploration is the very basic and fundamental requirement to determine whether we are going to be able to be self-sufficient. We must not do anything that is in any way going to act as a deterrent to Australian companies or investors, even though some of them are international companies, to put forward risk capital-and it is risk capital-to find oil. There is no prospect of establishing quickly enough an alternative to oil in the time frame we face to cover the crisis. We must be thinking far more deeply than we are at present. Without further oil discoveries, net import costs would rise to $3.2 billion per year by 1992. The year 1992 is not a long way away. By the year 2000, Australia could be dependent on foreign sources for up to 60 per cent of its oil supply. Currently we have 80 per cent self-sufficiency. So that equation will turn around dramatically. The predicted decline in oil self-sufficiency will only be accentuated by a continuation of cash bidding and consequent suppression of off-shore drilling activity, which seems to be the area where we have the greatest prospectivity. The Minister argued in his second reading speech in September that cash bidding is a more efficient and equitable system than the work program system, especially in areas where the competition is expected to be intense. By contrast, the industry argues that the work program, which applies to the bulk of applications for oil exploration permits, has operated satisfactorily for some years. Companies have participated in cash bidding as this was the only way they could obtain interest in highly prospective acreages. Santos Ltd, for example, says that it would have been committed to an active exploration program in the territory of Ashmore and Cartier Islands and adjacent areas under the work program alternative. Although the work program bidding system is more regulatory, it is superior to the cash bidding alternative. The Minister claims that exploration risks and costs are reduced by cash bidding because the cash bidding system is more flexible. He instances the fact that 39 per cent of work program permits sought deferments after the fall in oil prices. However, under the cash bidding system, successful bidders need to give no undertakings of what work will be done or when it will be done. This is hardly the way to provide the systems and incentives to encourage the pace of exploration in the face of declining reserves. The work program requires such a commitment. There seems little reason why the present work program system cannot be flexibly administered to take into account oil price rises and falls. The Government's claim that administration costs are lower and the award of permits is faster under the cash bidding system belies the fact that companies face increased costs before a drop of oil is found. The oil industry has argued strongly that money siphoned off as cash bids cannot be spent on seismic acquisition and drilling, a fact that is lost on the Minister. It is estimated that $30m paid recently in the cash bid for the Ashmore and Cartier permit could have been directed to another five or six wildcat wells. If one looks at the graph I have tabled one can see the massive decline in the number of wildcat wells that have been undertaken in Australia in recent years. The prospectivity of the Timor Sea is now in question. The cash bid concept was introduced in the belief that because prospectivity was high the Government stood to collect substantial income. Subsequent drilling in the Timor Sea has delineated reserves of less than 20 million barrels at Jabiru and possibly 40 million at Challis. It now appears that this area is more likely to contain a number of relatively small fields, and extensive exploration will be required to discover its potential. We will recall that cash bidding was originally proposed in 1985, a completely different climate of the understanding of the level of prospectivity in the Ashmore-Cartier-Timor Sea area. We now know that it is not as rich as we thought it was, but still the Government persists in coming back with this legislation. It really is economic lunacy. Under the cash bidding arrangements an offer may be rejected if the Government deems it `inadequate' in relation to the assessed prospectivity of the area, or because of insufficient competition. Cash bidding is meant to be based on allowing companies to indicate their assessment of the economic merit of an area. One would think that the Minister would understand that the lack of competition in itself indicated the lack of worth of an area-and hence a low cash bid. In addition, the fact that cash bids may not be accepted if inadequate introduces an arbitrary element into decision making. That the Government rejects such bids in indicative of its real purpose-a disguised form of taxation, despite all Government claims to the contrary. When the Minister responds he should answer that charge. The Minister also argued in his second reading speech that the two-year sunset clause was to check the possible negative effects on exploration and on the ability of small companies to participate. The Government points to the successful bidding round in 1986. However, this was essentially prior to the collapse in oil prices. Again I say: we were looking at a totally different environment. Subsequent to the price fall, exploration activity was lower in both work program and cash bid areas. However, the activity in the cash bid areas has almost come to a standstill. To date not a single well has been drilled on any permit awarded on a cash bidding basis and very limited seismic work has been carried out in one permit only. While it is acknowledged that this lack of activity in itself says nothing about the deficiencies or otherwise of cash bidding, it clearly demonstrates that any review is premature and any conclusion based on such a review must be viewed accordingly. The Minister claims that Australian companies have not been discriminated against and that Australian equity in oil exploration in the cash bid permit areas is high at 62.7 per cent. However, if the Broken Hill Proprietary Co. Ltd is excluded, the equity is only 25 per cent, versus 47.8 per cent for work program blocks. Although some small companies are included in the Australian consortia, the danger that small companies will find in the United States a more attractive investment climate is already being demonstrated, as I illustrated earlier. While the Government views cash bidding and the resource rent tax as complementary measures-a view which it admits is a philosophical judgment-a more pragmatic view is possible: that both forms of taxation seek to capture the same rent; that oil companies can ill afford a diversion of high cost risk capital from exploration budgets; and that taxes which seek a take from the exploration phase, where the end value is unknown, act as a disincentive to exploration. I quote from a letter that I received from one of Australia's primary explorers, Santos Ltd: What does not seem to be understood is that the funds Santos need to direct to a successful cash bid means that we will be carrying out less exploration work than otherwise. Equally philosophical might be the view that the Government, like the oil companies, should be willing to wait for its revenue rewards. The community is likely to benefit far more from the industry being able to expend fully its exploration budgets on acquisition of seismic data and on drilling than by diverting much needed capital to cash bids for off-shore acreage that is very high risk. There are some other elements in the legislation that are of concern to the oil companies and the States. Again, I am at a loss to know why Western Australia's Premier has not put up his hand to be heard on this issue. The legislation removes the special arrangement with Western Australia, making the Act uniform to all parties. Western Australia has been very successful in oil and gas exploration and production under the current arrangements. The Liberal Opposition views as a complete breach of trust the removal of the very practical and realistic recognition which Western Australia enjoyed under the submerged lands legislation. The Joint Authority is not constrained as to how it makes a judgment about whether a petroleum pool extends under one or more blocks. This can be seen in clause 9. Previously this was not an issue in that the location was automatically granted over a certain configuration of blocks depending upon the actual location of the nominated block in relation to permit boundaries. This amendment could cause problems with the size and definition of a location and could lead to disagreement between the permittee and the Joint Authority. That locations are to be defined by reference to petroleum pools is surely putting the cart before the horse. Currently the declaration of locations is a technique to allow the grant of a licence large enough to contain an as yet undefined pool. In other words, one of the purposes of declaring a location was to allow the size of the pool to be determined. Also in question is the effect of clause 8, which relates to royalties payable on secondary licences. Although the Government states that, except for the repeal of the cash bidding sunset clause, the amendments are not expected to have any financial impact, this amendment is most likely to increase the amount of royalty payable, with the increase going to the relevant State government. As a large part of Australia's remaining undiscovered oil reserves are believed to be located off-shore, the Government should be doing all in its power to encourage off-shore exploration. While cash bidding is only one factor influencing investment in the off-shore oil search, it is a real deterrent to activity, as I have already demonstrated today. No convincing evidence has been put forward by the Government to support the continuation of this experiment. The review that was given to me by the Minister for Primary Industries and Energy certainly does not make out a case for the removal of the sunset clause and the retention of the cash bidding system currently in place. Indeed, if that is the only review that he undertook, I am led to the view that he has been very badly advised. Perhaps he ought to go back and ask a few more questions. It is interesting that he seems to have rejected totally all the information that has been given to him by the industry at all levels-both international companies and local companies. We are seeing local companies start to vote with their feet; they are starting to go. The effect of continuing this experiment would be to increase government revenue derived from the petroleum industry-a fact which, of course, is not lost on the Minister-at a time when it is becoming increasingly difficult to attract capital for exploration projects. After what has happened in the last two days, how do honourable members opposite think companies in Australia will go trying to raise risk capital in one of the riskiest businesses in the world to explore for oil in Australia? Why does not the Minister stand up and tell us how he will answer that question? He just cannot answer it. But here is the Government putting in place a tax today. This is government gone mad, acting on inopportune and short term advice. Mr Chynoweth —It is not a tax. Mr SMITH —Where will the honourable member be in 1992 when we have to pay out $3.2 billion to import 60 per cent of our oil requirements? Mr Chynoweth —I will be on this side of the House. Mr SMITH —I will tell the honourable member: when the honourable member for Franklin (Mr Goodluck) gets up he will tell us about what will happen. Mrs Kelly —Oh, we have heard his speech so many times. Mr SMITH —There is nothing in the legislation to indicate that the ambit of cash bidding will in future be limited to the existing areas. That is an important point. Cash bidding originally was for off-shore exploration. As I understand this legislation-and I would like the Minister to respond to this-cash bidding will now be able to be applied to any exploration in Australia. Should the legislation pass, what is to stop the Government extending the process of cash bidding to all areas of exploration around Australia? The coalition parties plead with the Government to reconsider, especially in light of the events of the last few days. We plead with the Australian Democrats to be sensible and to stand up as they did in 1985 and say that they reject cash bidding as inappropriate. We ask them to take account of what has happened in the United Kingdom, the United States of America and Canada with regard to cash bidding regimes. They do not work; they act as a disincentive to exploration. We in this country will face a very fundamental problem in about 1992 with a lack of self-sufficiency, a need to import and a consequent cost to our balance of payments. If ever there was a time for us to ensure that we do not add any further burdens to our current account and balance of payments it must be now. Decisions in the oil industry are long term decisions. We must make sensible decisions now. When this legislation was first proposed in 1985 it was a very different climate from the present one. Things have changed. We oppose this legislation and we hope that the Government will see the sense of our arguments and those of the industry. Mr CHYNOWETH(Dunkley)(12.23) —It is with great pleasure that I rise to speak on the Petroleum (Submerged Lands) Legislation Amendment Bill. I always welcome an opportunity to probe the latest developments in the mystery and intrigue that surround the petroleum industry. The honourable member for Bass (Mr Smith) spoke fairly extensively about the cash bidding clause. Cash bidding is one way that the Australian people can receive some compensation for the resources that belong to all Australians. These resources do not belong just to the petrol companies. They do not belong to the multinational oil cartel. They belong to all of us, and why should we not get some money back for them? From the way that members of the Opposition have spoken so far in this debate today one would think that Australia was already owned by Esso Australia Ltd or BP Australia Ltd or any other company in the multinational cartel. It is wrong that we just give away our resources to overseas companies for them to plunder and exploit. Those resources belong to all of us here, and we all should share in the wealth of Australia. It is unfortunate that the prospector that mines the black gold that is so vital to our day to day existence is able to operate beyond the glare of public scrutiny for so much of the time. A very recent occurrence in Frankston has hardened my resolve to protest once again at the insanity of the industry's crazed pricing structure and the absurd marketing practices that it continues to inflict upon the Australian people. A BMW car was parked in a street in Frankston, and it had on its bumper bar a small sticker which said, `I own the car. Still paying for the petrol'. At the time I chuckled to myself, but clearly the obnoxious policies of the avaricious petroleum industry cartel are no laughing matter. Moreover, the fact that BMWs do not run on the smell of an oily rag is even less amusing. I suspect that the car's owner had placed this succinct adhesive label just above the car's exhaust pipe only a few days after the price of petrol in Melbourne rose overnight by almost 12c a litre. I also believe that the wealthy owner was seeking to show that each and every member of the community is a hostage in the hands of the multinational companies, who care only for the bottom line of their annual reports to their shareholders. It is my purpose today to ask again: why is the speechless, powerless, abused, inadequate and naive motorist the butt of the oil companies' wheeling and dealing? It is my duty today to ask again: why is the honest, battling and hard-working site owner on the receiving end of the oil companies' taunts and threats? Finally, it is my task to ask again: why is the Government's oil industry policy labelled by the cartel as deficient and one which stunts economic growth? The very fact that the price of a product can rise by 23 per cent overnight is an indictment of an industry that is seriously burdened with inequities and racked with problems. Of course, the Australian oil industry has gone through an intense period of rationalisation in the last few years, and no sector of the industry has been left unscathed in the wake of a profound economic change. However, I do not accept that the appalling plight of the motorist or the many service station operators forced out of business is the result of fair competition. The process of slimming down the number of participants in the industry mirrors more closely the wasting of Mafia mechanics than the healthy run-down of an overpopulated industry. The rules of the game played by the oil companies are simple: there are none. Australians must humbly scrape and bow to the petrol bowser and its supplier in the increasingly forlorn hope that they will be seen in a benevolent light and granted an affordable tank of petrol. However, before most Australian motorists can reach below their belt to the wallet in their hip pocket, the price of petrol will have skyrocketed to such an extent that cash must usually take a back seat to the credit card, and to the interest rates charged by our banks. I am enraged to hear the explanations of oil industry representatives as to why these price variations occur. Its spokespersons wrongly categorise all motorists as mugs when they orate the industry's usual fairy tale of a market so competitive that once price variations occur anywhere, the word spreads very rapidly. Their well-worn fantasy that price variations take place because of the interplay of market forces, competition amongst dealers and competition amongst wholesalers is about as monotonous as a worn- out revolving fan belt, or a speech from the Leader of the Opposition (Mr Howard). `Collusion' may be a dirty word, but I wonder whether an arrangement exists among the oil companies to allow prices to increase uniformly overnight throughout a city of 3 1/2 million people. Virtually every other commodity in our shops sometimes sells at a discounted price. Invariably one store will sell a product at a much lower price than the other stores. As the market forces come into play, the price of items rises and falls, reflecting the basic independence of shopkeepers and their ability to draw customers. However, it would be ludicrous if all prices rose overnight, at the same time. It appears that our benevolent oil company executives all happen to raise their prices at exactly the same time. Maybe this comes about when business clones are produced by an oil cartel. So if motorists are the victims of the oil companies' profit assault, spare a thought for the service station proprietors who are the fodder in the big petrol war. The lessees of service stations were once the stalwarts of the petrol retailing industry. Now they are desperate and battered victims who operate Claytons businesses and have their livelihoods manipulated by forces beyond their control. The situation has been particularly torrid during this last winter in Victoria. I know that many more lessees expect to be out of business by Christmas. Tragically, it appears that reindeer will have to pull their sleigh again on Christmas Eve, because these honest and hard-toiling Australians will not have access to the fuel tanks from which they derive their livelihood. The operators make no bones about where the blame lies. They highlight the unreasonable oil company practice of dumping petrol as the cause of their plight. In some instances oil companies are selling discount petrol to independent operators, thereby forcing their lessees to sacrifice their margins to fight discount wars. A spokesman for the Victorian Automobile Chamber of Commerce recently said: The oil industry is obliging the retail sector to carry the cost of the manufacturers' fight for the market share. Of course, the lessees and commission agents, to use the words of one advertising campaign, do more than sell petrol-they also go to the wall. At the same time, the oil companies remain unperturbed and continue to report healthy profit results. Caltex Australia Ltd, for example, recently turned a $28.2m loss into a 1986 $22.1m net profit. Likewise, Shell Australia Ltd, whose business has been so successful, reported a 1986 profit of $45.8m. So the oil industry continues to perpetuate the myth that price competition exists in the market-place. However, this bitter and unfair competition is really greed by another name. The fact that Melbourne service station owners recently voted to picket petroleum refineries if oil companies did not agree to hold negotiations on higher profit margins within a month is a blatant sign that the industry is facing a terrible fate. No individual service station operator has a say; only the multinationals run the petroleum industry. They have taken over the whole lot. Of course, it is suggested that the vast size of Australia means that ensuring that each and every motorist pays the same price for petrol is a complicated business. I could find this explanation palatable if the price of petrol in Frankston were cheaper than the price in Broome, but it is not. Moreover, I could even accept the protestations that discounting wars are of no benefit to anyone if the share of profit for the service station owners was not becoming smaller, or non-existent. I believe that the multinational oil companies are happy to foster the consumer misconception that service station proprietors are penny pinchers and are pocketing the rewards when petrol prices increase. Sadly, such a stance is not only irresponsible but also it encourages desperation in an industry where common sense, conciliation and calm are urgently needed. Furthermore, the unfeeling and heavy-handed tactics of the oil companies in painting the service station lessees as the inefficient operators in a free market competition serve to deflect attention from their substantial profits. A recent publication of the Australian Institute of Petroleum entitled Petroleum Gazette and circulated as `an aid to public understanding of the oil industry' attempts to paint the oil industry as the poor cousin of other industries in general. It is a tear jerking journal that vividly describes, no doubt to attract the sympathy of motorists and the faint-hearted, the open wounds that oil companies receive in price wars. The knot in one's gut is wrenched even tighter as the journal goes on to describe how the oil cartel must lick its wounds and assist dealers to maintain a reasonable income. If only I could believe that the sincerity of its words would be matched in its deeds. Perhaps the production of all the tears was intended to fuel the water-powered car that appeared in Brisbane and captured the attention of the Queensland Premier a couple of years ago. The Petroleum (Submerged Lands) Legislation Amendment Bill proposes a number of amendments that are essential to the effective and efficient administration of the Commonwealth's off-shore petroleum legislation. Clearly, this Bill will not directly alleviate the dire problems facing the motorist and the service station operators within the industry. I suppose it is a little like calling the Royal Automobile Club for assistance when one's car has just been written off around a tree or a pole. The symptoms of the petroleum industry's disorder require a fundamental and much greater solution. However, before a proper prescription for reparation may be written, a proper diagnosis of the ills must be made. Unfortunately, the oil companies litany of misinformation and inappropriate self-image are a major barrier to the petroleum industry attaining a new and better elevated pedestal. In conclusion, it is possible to make a precis of the hostile and forbidding environment of the oil industry. The retail market-place is all but totally controlled by the major oil companies and the consequences of this are disastrous. Today's motorists face wildly fluctuating prices which are discreetly manipulated by the oil companies. It is not reasonable to expect service station lessees to exist on a shoestring margin of 1.8c a litre during a discount war. It is even more outrageous to believe that oil company rebates during a price war are anything but manifestly inadequate. Truly the glorious age of motoring is in danger of being left in the garage because motorists cannot afford to speculate on the roller-coaster price of petrol. Service station owners have locked their doors because of bankruptcy. While speaking on this Bill I would like to mention the situation in Iran which will have enormous repercussions on the oil industry if the conflict there escalates any more. I can start in 1979 with the deposing of the Shah of Iran. Slowly but surely since then the heat has been turned up. The United States was involved in selling weapons to Iran as late as 1986 and possibly it is still selling it arms even though Iran is now looked upon as the enemy. Some of the wars the West has fought in the Middle East were to look after the interests of the oil companies-large, privately owned companies, companies that were not owned by the United States, British, French or Dutch governments but by private investors. Of course we all recognise that our economy needs oil but why should taxpayers' money, in the form of the defence forces and equipment, be used to protect the interests of private companies? These companies are not owned by all the people of the United States, all the people of the British Isles or all the people of Holland. The power these companies have over government is beyond the understanding of the average citizen. As a hypothetical situation, imagine the power one would have if one could stop 60 per cent of Australia's oil production by refusing to put a card into the computer that controlled the valves and the flow of oil from Bass Strait. I am certain one would have the ear of any Australian government. With the collapse of the share market, and if the world goes into a recession or depression, one of the traditional ways some governments get their economy moving again is to be involved in a conflict somewhere. I trust that the oil fields of Iran will not be the trigger or an excuse to stimulate our world-wide economy. One can only hope that the leaders of the major nations of the Western world will think long and hard about this major concern and reach an amicable solution for all. Mr GOODLUCK(Franklin)(12.40) —Today the honourable member for Dunkley (Mr Chynoweth) mentioned many matters for which I have some sympathy. In particular, he referred to the problems associated with service station proprietors. The Minister for Defence Science and Personnel, the honourable member for Canberra (Mrs Kelly), said that she has heard Bruce John Goodluck speak before on the petroleum industry. She may have because I have spoken on this industry on many occasions. There are many points which I continually bring out because they need to be heard and we, as parliamentarians, need to take them up. In the lovely city of Canberra the roads are better than the footpaths in Tasmania. Mr Wright —Very well represented. Mr GOODLUCK —Canberra is a beautiful place. The Minister represents Canberra and I assume that she is doing a good job because she would not be re-elected if she were not. Canberra has called for an inquiry by the Prices Surveillance Authority (PSA) into the price of petrol. As far as I am concerned, the PSA is one of the real problem areas, the root of the problem. For example, in Canberra in 1983 the price of petrol was 46.3c a litre. In about December 1986, when I did my survey, the price of petrol in Canberra was 55.4c a litre; so it has gone up by about 9c a litre since the Hawke Government came to power. Across the board in Australia it has gone up by an average of 13c a litre in every capital city. The honourable member for Dunkley will say that that figure is fictitious because all of a sudden one can purchase petrol for 51c a litre or 45c a litre. At the moment the supposed retail price in Hobart is between 64c and 67c a litre but one can buy it there for 52c a litre. We spend a lot of money on the PSA. I do not want to criticise or knock its Chairman because the PSA always takes it personally when one says something about it. Its job is to fix a maximum wholesale price for petrol in Australia. That is what it is paid to do and that is what it does. We hear about injecting finance into the PSA so that it can look into the prices of commodities, such as a packet of sugar. Great play is made of the fact that it will look into such prices. It fixes a maximum wholesale price for petrol in every capital city. In March 1983 the maximum wholesale price of petrol in Hobart, for example, was 43.85c a litre. Today across the board in Australia it is roughly 50.17c a litre in every capital city. We pay the Prices Surveillance Authority to fix a maximum wholesale price for petrol, but what do we see? We find that in some heavily populated areas of Australia petrol is sold below that price. The honourable member for Dunkley made a very pertinent point. The dealer, the poor service station proprietor, is the pawn in the game because he is the one who gets all of the blame. When people buy petrol they say, `You have put the price up; you have put the price down'. They are not interested in governments; they are not interested in the PSA; they are not interested in this Parliament. At the point of sale they say to themselves, `Why?'. Somebody in Hobart who is paying 67c a litre for petrol will get the Melbourne Herald and see that the price of petrol in Melbourne is 52c or 53c a litre. Of course he gets upset because his motor vehicle is probably one of his biggest investments. Mr Cunningham —Same speech. Mr GOODLUCK —The Whip remarks that I am saying the same sorts of things. They are hurting his Government because it has not been able to do something. The Prime Minister (Mr Hawke) said that when he came to government he would reduce the price of petrol by 3c a litre. He has put it up by 13c a litre. The Treasurer (Mr Keating) said that it was taxation by stealth at the petrol pump, but what has he done? He has not been able to contain prices. We are now seeing crocodile tears about what is happening to the price of petrol. If the honourable member for Denison (Mr Kerr) wants a serve, he will always get one from me. He is the new member from Hobart-I am from Hobart-and he will last about five minutes. He interrupted me and said, `You have been talking about the price of petrol for 12 years. What have you done about it?'. That is the sort of thing that gets my Irish up-not the Irish blood that the Prime Minister has. I have real Irish blood in me. Mr DEPUTY SPEAKER(Mr Ruddock) —Order! It being after 12.45 p.m., the debate is interrupted in accordance with sessional order 101a. The debate may be resumed at a later hour. The honourable member will have an opportunity to continue his speech when the debate is resumed. Sitting suspended from 12.46 to 2 p.m. Mr HOWARD —I refer the Minister for Industrial Relations to his statement at a news conference a short time ago that nobody, including the Government, the employers or the Australian Council of Trade Unions, could know the implications for the Australian economy of the recent collapse in the world stock markets and that the Government might have to rejig its approach to wages policy. How does the Minister reconcile that eminently sensible position with claims by the Treasurer as recently as this morning that, notwithstanding the recent collapse in global stock markets, world economic growth would be stronger than forecast in the Budget, Australia's trade and net export performance would not be affected very much and no change in domestic policy settings would be necessary? Mr WILLIS —The Treasurer is more than capable of speaking for himself in this place and outside. My statement, which was made on behalf of the Government, simply says that in the light of the movements in the stock markets internationally and in Australia, it is prudent for the Government to put to the Australian Conciliation and Arbitration Commission in the national wage case today that the Commission should postpone the case so that the Government and the parties can assess and clarify as fully as possible the implications of recent developments for wages policy, if there are any such implications. That seems to me to be a prudent position for us to adopt. The Commission agreed with that. There is no problem in reconciling that statement and that action by the Government with anything that the Treasurer has said. The Treasurer was simply making the point that there is not going to be an international recession. Indeed, if the question were directed to the Treasurer, I am sure that he would explain fully why there is no conflict between the two statements. Madam SPEAKER —I have an unusual announcement to make. I inform the House that we have present in the gallery 15 young Aboriginal cricketers, some of whom will form part of a bicentennial cricket team, which will tour England in 1988 to celebrate 120 years of Aboriginal cricket in Australia. In doing so, the team will play at venues and against the same clubs which fielded teams against the original and successful Aboriginal team in 1868. On behalf of the House, I bid them welcome. Honourable members-Hear, hear! Mr BRUMBY —Is the Minister for Employment, Education and Training aware of concern expressed about the future role of the Australian Research Council (ARC)? Now that the Minister has announced new advisory structures for his Department, will he assure the House and the research community that the Government will recognise the need for independent assessment of research grants and the role of basic research? Mr DAWKINS —I thank the honourable member for Bendigo for his question. I think there has been some misunderstanding of the Government's intentions in relation to the funding of research. The first point I make is that before and during the election campaign the Government undertook to establish the Australian Research Council. We have now decided that that Research Council should be included under the general framework of the new advisory arrangements which we released last week. The establishment of the Australian Research Council flows from recommendations of the Australian Science and Technology Council (ASTEC) which, of course, has been looking in great detail at the way in which research and development activities are supported throughout Australia. ASTEC wanted the ARC to support both fundamental research and research which will directly contribute to national economic and social development, to enhance the training of research personnel and to improve the interaction between the higher education research sector and industry and other government research sectors. The Government makes a very substantial contribution to this country's research effort. One of the problems in the past has been that in Australia-unlike in many other countries-the commitment from the private sector has not been as great as it might be. Therefore, this is an attempt to ensure that the public and private dollars can lead to the best possible outcome for Australia's research activity. It would be quite wrong to suggest that in this move we were in any way denigrating or undermining the very substantial contribution that fundamental research makes both to the community generally and, more importantly perhaps, to more applied research later on. I do not think there is any essential contradiction between the idea that we should support fundamental research of the highest quality in order that Australia can keep pace with international research developments and the idea that that research effort in our higher education institutions should also be relevant to Australia's social and economic needs. I conclude on the note that in establishing the Australian Research Council, we have brought together some $67m worth of research and related funds for distribution on the advice of the ARC to ensure that we get the best result out of that very substantial expenditure. However, I point out that even though there has been a transference of some $5m from what previously went to universities through the Commonwealth Tertiary Education Commission to the Australian Research Council-and, indeed, that trend may continue-it is still the case that there is a substantial contribution made to fundamental research effort which goes to the institutions, mainly the universities, through the recurrent funding arrangements of the Commonwealth. In the future I would foresee that there would continue to be substantial support for research coming from that area. As a result of these changes, we will not only continue to support the very high quality research which is carried out in this country, but also add to that by bringing together industry and others who have an interest in these matters to maximise the results. Mr HOWARD —I ask the Treasurer whether he adheres to the view expressed yesterday and this morning that no change in domestic economic policy settings is required or will be required consequent upon last Friday's record current account deficit and recent volatile movements in world stock markets. Mr KEATING —Yesterday I answered points about the current account deficit and referred to the fact that the quarterly pattern of the current account was entirely in line with the Budget forecast for a decline in the current account deficit for the year as a whole. Yesterday and this morning I said that the implication in the questions asked of me yesterday was that because there was a sell-off in the stock exchanges of the world we, in a panic-stricken way, had to reset all the domestic macroeconomic settings. I said that we did not see a need for that-that is, we thought that the world would not move into a 1929-type depression and therefore the adjustment we made was quite adequate to shift our current account. I made the more general point that Australia is better equipped now to face whatever comes its way than it has been for a very long time. Certainly in terms of fiscal policy-- Opposition members interjecting- Mr KEATING —Let me take Opposition members through this. The last time we were this competitive was in 1970. We have had a 10 per cent decline in real unit labour costs. We have reduced the Budget deficit from the 5 per cent of gross domestic product that the Opposition left us to zero. These are three pretty good points for a start. I made the other point this morning that in respect of the wage case my colleague, the Minister for Industrial Relations, would be saying something about that today. I enjoin journalists to see what we said at the Australian Conciliation and Arbitration Commission's hearing because the Minister for Industrial Relations and I discussed this yesterday and we thought that putting the view that he put would be prudent in the circumstances. That does not mean that there will be a major change to the settings of economic policy. This idea that when we have a fall in the stock market the Cabinet sits in an emergency session and recasts fiscal policy, monetary policy, wages policy and everything else is the kind of slapdash policy that honourable members opposite used to dish up to us. Mr O'KEEFE —My question is directed to the highly successful Minister for Primary Industries and Energy and concerns the question of chemical residues in Australian export produce. Can the Minister inform the House of the steps that have been taken by the Government to ensure that further residue problems do not occur? Mr KERIN —I thank the honourable member for his question and for his close interest in this issue. I address the question in four areas: marketing, activities being undertaken, funding, and commodities other than meat. Because of the testing regime we have put in place Australian produce is moving into all our markets. In Japan and Canada all produce is moving into the market-place. In the United States post-25 May produce is moving freely. Pre-25 May produce, when we increased testing after having first become aware of the problem, is moving in the United States despite import testing, although the produce from plants with a number of violations is yet to undergo testing. We believe that the actions we have taken in Australia have brought the situation under control. Those actions include testing. We have taken some 110,000 samples so far. Some 340 properties have been identified as having problems and have been quarantined or have had movement restriction orders placed on them by the State authorities. The industry, the States and the Commonwealth, through the Australian Meat and Live-stock Industry Policy Council, should be in a position in November to recommend areas where more normal activity can resume. In other words, the drive is to get areas cleared to enable concentration of testing in those areas requiring extra surveillance to ensure that there are no problems. The Australian Meat and Live-stock Industry Policy Council is co-ordinating all policy aspects and the Standing Committee on Agriculture is co-ordinating the regulatory aspects. The State governments have played a significant role in the progress we have made. The other area we are still working on is traceback for sheep. Research is still under way. Traceback procedures for cattle and pigs are now in place. The Commonwealth has allocated significant funds to assist producers, including $1m to assist in the storage and transportation of recalled, banned chemicals, $0.5m towards testing costs in the United States and publicity in Australia, at least an additional $1m in manpower for the Australian Quarantine Inspection Service over the full year and $5.7m over the next three years for the upgraded national residue survey and the establishment of a national database. The Australian Meat and Livestock Corporation's annual general meeting will be the place and time for the industry to determine how any industry funding questions are handled. In the interim I have asked my Department to take up with the Australian Government Analytical Laboratories the cost of individual tests to ensure that the industry costs are minimised. For commodities other than meat the Government is also taking positive steps to ensure that problems do not occur. The Bureau of Rural Science has already participated in an evaluation of dried vine fruits, dairy and fish products as well as a number of other commodities. We are doing this to establish the profile of any potential residue problems. The Bureau is also in the process of evaluating what other chemical groups need to be monitored to ensure that problems do not arise in the future in this area. Mr PEACOCK —My question is directed to the Treasurer. Is it a fact that the latest forecasts of the Organisation for Economic Co-operation and Development (OECD) are for a current account deficit of 3.3 per cent of gross domestic product (GDP) in the United States compared to 4.6 per cent in Australia? Is it also a fact that the figure for Australia on a current account deficit to GDP ratio in 1987 is the second highest of all the 24 OECD countries? Mr KEATING —I do not think that makes much of a point. Opposition members interjecting- Mr KEATING —Opposition members are such an uninformed and crass lot. Let me make the point again that in 1981-82, that is, when the present Opposition was in government-we can put those two facts together-we had a current account deficit at 6 per cent of GDP. It came back temporarily to about 4 1/2 per cent under the weight of the enormous recession the previous Government gave us in 1982-83 which choked off imports. As demand-any demand-was put on the economy and as the terms of trade, in particular, started to slide, our current account exposure opened up. As I said yesterday, since 1984 Germany has had a 30 per cent improvement in its terms of trade and Australia has had a 16 per cent deterioration. It is a fact of life that the breaking of inflation in the Northern Hemisphere has broadly been accomplished by breaking the terms of trade of the primary exporting nations, including Australia. It is under that burden that this Government has had to adjust the economy. But instead of having a decent tradable goods sector and a services sector which would take up some of the running when the primary export sector slackened as commodity prices fell, where was our tradable goods sector? It was in the dustbin which the previous Government left it in. Let us recall the views at the time. I recall Mr Stone, now a senator and one of the Opposition's trusted and cherished advisers and colleagues, saying, `What we need are more imports'. Remember the thesis that was being put in the late 1970s?-`What we need is more imports to hold the exchange rate down'. We got the imports all right. They wiped out or decimated our manufacturing industry and while they were doing that they destroyed the incomes of Australian farmers. That is the legacy the previous Government left with us. It left us with double digit inflation, double digit unemployment and the worst state of competitiveness since the Depression. That has all been restored by this Government's policies. We have taken the current account deficit down from 6 per cent of GDP in 1985-86 to 5 per cent last year and to 4 per cent in prospect for the current year. In other words, the pace of our decline is marked and sharp. The United States is heading in the opposite direction. At a time when it ought to be pulling its current account down, when it is running huge domestic budget deficits and borrowing money from the rest of the world to fund current consumption, it is also running a massive and growing current account deficit. It is probably the September current account deficit number in the United States which has been part of the trigger for the sell-off in the stock markets around the world. I have never for a moment said that the United States current account deficit is larger now. Of course it is not. It is a statistical fact that it is lower. But the fact is that the policy adjustments in this country have been rapid, ambitious, large in magnitude and high in quality. We have not seen comparable adjustments in the United States. At a Press conference this morning I made the point that a domestic budget deficit of $200 billion-odd, a growing current account deficit and increasing increments to the capital values of the American stock market was an unsustainable scenario which had to be worked out either by a massive collapse in the United States dollar, by a collapse in the bond markets or by a collapse in the stock market. The collapse has come in the stock market and the United States exchange rate. In other words, the markets will finally eke their result from any administration or country that does not make the adjustments. That is what has happened to us. The markets eked the result when the previous Government never made the adjustments and left it to us. The question illustrates very clearly and succinctly my point, which is that this country has adjusted and is in better shape now to face whatever comes its way than it was in 1983. If such adjustments were occurring with the same ambition in Germany, the United States and Japan, the world would not be suffering these imbalances-- Opposition members interjecting- Mr KEATING —Opposition members must be the only people in the world who think that the imbalance in trade between Japan and the United States and between Germany and the rest of Europe is a laughing matter. So long as they hold those pre-Copernican views they will be as irrelevant as they have been in the last 4 1/2 years. Mr LANGMORE —I also direct a question to the Treasurer. Is it true that Australia has a lower proportion of public debt to gross domestic product than all but one other Organisation for Economic Co-operation and Development country? Is it true that Finland is the only Western country that has a lower proportion of public debt to gross domestic product than Australia? Is it true, therefore, that the Government's policies in reducing public debt have been very successful? Mr KEATING —The Government sought to reduce the call on Australian savings and public debt by reducing the Budget deficit, and also the rate of growth in servicing that debt by the growth in public debt interest, which has been the fastest growing component of Government budgetary outlays. I would need to check my colleague's assertion about our place in the table in terms of public debt abroad, but I am sure that he would be right in saying that the Commonwealth's debt abroad is relatively small compared with most Organisation for Economic Co-operation and Development countries. Indeed, the Commonwealth's debt abroad is far outweighed by the Commonwealth's reserves. If one takes public debt in the broader sense, including Commonwealth and State debt, our State and Commonwealth debt combined is still modestly above the general reserves which the Commonwealth enjoys. It is a fact of life that most of the debt of this country, about 60 per cent of it, is privately held, but of course it is generated by the current account deficit. The way to diminish that indebtedness is to diminish the thing that is pushing the growth of that debt, and that is the current account imbalance. That is what policy is directed towards. Mr PEACOCK —My question is directed to the Treasurer. Is it a fact that at the end of 1986 the gross foreign debt to gross domestic product (GDP) ratio in the United States of America was around 13 per cent, while in Australia the figure was around 40 per cent? Is it also a fact that even in the relatively favourable international economic environment assumed in the Budget, the Government expects Australia's debt to GDP ratio to continue to worsen in the year ahead? Mr KEATING —This is like a recital of the Commonwealth Year Book statistics. If the Deputy Leader of the Opposition wishes to pluck questions from the Commonwealth Year Book statistics and have me comment on them, I am quite happy to oblige him. Mr Moore —Just answer yes or no. Mr KEATING —I do not think the honour- able member would understand that answer. He is back over there in opposition. He is not doing too well, and is enjoying it, I hope. It is a fact of life that countries which run persistent current account deficits increase their exposure to international indebtedness abroad. The very essence of the Government's policy changes have been about diminishing that debt exposure, about pulling down the generator of that debt, which is the current account deficit. I said in the Budget Speech that the current account deficit, even at the level projected, was unsustainable and too high-let me repeat that now-and that it would take some time before we stabilise our debt to GDP ratio, let alone bring it down. I said that in the Budget Speech in Statement No. 2. I have said that in other places and, of course, in Europe since and in North America, and I am happy to repeat it here today. I am not quite sure what point the Deputy Leader of the Opposition is seeking to make. If he is saying that the smaller debt to GDP ratio in the United States is a cause of little concern and that the United States should wait until it is in the high thirties before that economy, with its massive GDP, and therefore a high proportion of that massive GDP, puts a call on the rest of the world's savings of gigantic proportions, which it is doing now even at the current debt to GDP ratio, I do not understand the point. The honourable member is saying that the United States debt to GDP ratio, which he says is 13 per cent and which I would need to check, is not much of a worry. But 13 per cent of the huge GDP of the United States as a call on the rest of the world's savings is massive. That is why the world's wealthiest nation cannot continue to be a major debtor nation borrowing from the rest of the world, calling on the savings of the rest of the world to fund its Budget deficit or its current account deficit. I should have thought that was pretty elementary. Mr HOLLIS —Is the Minister for Land Transport and Infrastructure Support aware that the Australian Institute of Criminology has recently released a report entitled Death and injury on the road? Can he say how the report relates to Federal Government road safety initiatives? Mr DUNCAN —I thank the honourable member for his question on this important topic; I know that he has had a long interest in road safety questions. I am aware of the report to which he refers, prepared by the Australian Institute of Criminology. That report, as I understand it, makes a number of proposals which are designed to reduce death and injuries on our roads. These include, I am told, novice driver proposals which are designed to introduce a graduated licensing process, an approach which has previously been supported by the Federal Government; and an extension Australia-wide of high level random breath testing, an initiative also supported by the Federal Government. They also include the targeting of enforcement to better deal with traffic offenders. The Federal Government also supports that initiative in policing practices designed to save lives on the road. Finally, the report suggests the promotion of greater community responsibility concerning the consumption of alcohol in this nation, a recommendation which we also support. Much of the report's value lies in the information it contains on research carried out in Australia and overseas, and I would recommend it to the House for that reason. There were in this country 2,883 road fatalities in 1986, a figure lower than for any year between 1964 and 1982. Road fatalities in 1987 to 30 September have fallen to 1,972, and that compares with 2,149 in 1986. I think that demonstrates the good work that is being done in this nation already in relation to road safety. This Government has been playing an important role in that regard and our strategy has consisted of three fundamental elements. The first is to provide safer roads. The second is to ensure safer vehicles, and new certification procedures have been introduced together with the new Australian design rules. The cost of this system is only $5 per vehicle for the compliance plate. The third is research and promotion designed to counter the so-called human factor. The aim of this element of the Government's strategy is to change attitudes and promote responsible road user behaviour. To this end we have implemented a number of highly successful public education campaigns and we are also in the process of preparing a road safety resource package for community groups to assist them in developing their own road safety. This is in marked contrast to what was done under the Fraser Government. This Government has spent in excess of $10m on road safety. Opposition members interjecting- Mr DUNCAN —If Opposition members think that road safety is a matter for some amusement, that is for the Australian community to judge. This Government has spent in excess of $10m on road safety, which is in marked contrast to what was done under the Fraser Government. If Opposition members had had their way, they would not have spent a cent on road safety in this nation. Our record is second to none in this matter and the statistics prove it. Mr SHARP —My question is addressed to the Treasurer. Did he receive $19,760 in travelling allowances for the 1986-87 financial year for residing principally in Canberra? Does he still claim travelling allowances on the basis that his home base is Sydney? Does he actually reside with his family in Canberra? What possible justification can he provide for his ongoing rorting of the travel allowance system? Mr KEATING —There is one thing about the Opposition in this country: its members can never get out of the gutter. Even when the big issues are on, they never get out of the gutter. Even supposedly the youngest and freshest of them is taking up the mantle. I only say to the honourable member that he should have just checked with his former Leader, Mr Anthony, and with Mr Nixon, and with his current Leader, old Sinkers over there, and asked Sinkers what his travelling allowance is and where he lives. Mr Sinclair —You check where I live. Mr KEATING —We know where the right honourable member lives-around here in Deakin, where he has always lived. Or where he says he lives; not where he gets off the plane every Friday night. Mr Sinclair —You check where I live. Madam SPEAKER —Order! I call the Leader of the National Party to order. Mr KEATING —Let us start by making the point that in the last three years the Leader of the National Party has not published his travelling allowance or his place of residence. Before the Leader of the Opposition asks any questions of us, he should publish all of the claims from his front bench. The second point I make is that I have claimed 191 days in Canberra, and of course, the corollary of that is that were I to have stated my principle place of residence as being in Canberra, I would have claimed the balance of the year mostly in Sydney. So I would spend 191 days in Canberra and 175 in Sydney, in which case the cost would be about the same. The third point I make is that I am the Treasurer. I have to be here as much as most Ministers. I have 191 days here, while my colleague Senator Walsh, who enjoys a similar responsibility to mine, was here for 153 days. But the Leader of the Opposition in the Senate-not the Treasurer and not the Minister for Finance-claims $23,500. That is $4,000 more than I claim, and about $8,000 more than Senator Walsh claims. When we come to our total establishment costs, is it not interesting that my costs and those of my staff come to $30,000, but the costs of the Leader of the Opposition, Mr Howard, and those of his staff come to $90,000-three times as much. Because he decides to drag his staff around like a travelling gypsy caravan, to suit his own express convenience, his staff costs-listen to this-- Mr Howard —You are rorting the system. Mr KEATING —No wonder he does not like the answer. My staff costs figure, for an office of 12, is $10,000. It costs $10,000 because I live here and they live here, and they do not trek backwards and forwards to Sydney. Opposition members interjecting- Mr KEATING —I do live most of the time here. Madam SPEAKER —Order! Mr Carlton —You cheat. Madam SPEAKER —Order! The House will come to order. Mr KEATING —Of course I live here. Madam SPEAKER —Order! The House will come to order. The honourable member for Mackellar will not interject. Mr KEATING —My staff costs come to $10,000 for 12 people, because they reside in Canberra. For 18 staff, the staff costs of the Leader of the Opposition costs are $77,000. What he is enjoining me to do, as the principal economic Minister in the Government, is to treble my costs to his level. So instead of having establishment costs of $30,000 for me and my staff, he would prefer the cost to be $90,000, which is the cost for him and his staff. The fact of the matter is that this is a phoney, fallacious and dishonest issue which the Opposition has run so dishonestly. It had its little mate Tony Street claiming 320 days living on the south coast of Victoria. The last time the Leader of the National Party put anything on record, he had not 190 days in Canberra but 290 days. He cheated and rorted the system year in and year out. He even got to the stage that during his annual holidays he changed the place of residence back to his farm so that he could claim it through the holidays. That is the truth. They are the things the Opposition is up to. I make no apologies for my position. I never have and never will. My principal place of residence is the one property I own in Sydney. I live here to do this job as Treasurer-- Mr Sinclair —So you live here. That is exactly the point. Mr KEATING —I see Sinkers every Friday night on the plane, so I take it that he does too. The fact is that if I were not claiming 190 days here, the balance, taking 190 from 360, would be claimed for the days spent in Sydney, or that part of the time which is not part of my annual holidays. Here we have the Leader of the Opposition in the Senate claiming $23,500. Senator Walsh, who also lives in Perth and who is a senior Minister, claims $16,500. Mr Howard —But he lives in Perth. Mr KEATING —So does Senator Walsh. He claims $16,500 and Chaney claims $23,500. Chaney's staff costs are almost as large as those of the Leader of the Opposition. He claims $31,000. So Senator Chaney's total establishment costs are $54,000; those of the Leader of the Opposition are $93,000; and mine are $30,000. I thought that those mathematics would penetrate even the mind of the Leader of the Opposition-$90,000 to $30,000 should make some impact even on him. Finally, the Leader of the Opposition demeaned himself in the election campaign by even raising this matter in his principal, campaign-opening speech. As a result of the way he behaved during the campaign, and the standard of his behaviour in the last Parliament, he was slapped in the mouth by the Australian public and put back into opposition. He is looking for another slap in the mouth from the Australian public, which it will give him for his small-mindedness and his dishonesty. Mr SCHOLES —I ask the Treasurer: Is he concerned that comments being made in an attempt to talk down the Australian economy by a small political minority for political gain, could cause serious damage to Australia as a whole and to the majority of Australian citizens? Mr KEATING —I think it is fair to say that since the election, particularly since the very clear result in the election, which clarified the state of the parties and who governs this place, and with the presentation of the Budget, there has been a substantial turnaround in sentiment, particularly business and investment sentiment, towards Australia. At the meeting of the Metal Trades Industry Association the other night, which I attended with colleagues from both sides of the House, we were told of investments being made which indicated an exceeding of the official expectations in the Budget. It ill becomes any group to try to talk down its economy or its nation for its political gain. It helps nobody to pull the economy or the country into disrepute when such a fundamental and important transition in the economy is occurring and, of course, at a time when Australia has had a big collapse in its terms of trade and growth in its current account deficit. I can only say that I think the Australian community generally is responding well to the changes which the Government has brought in. The spirit of enterprise and initiative which is being shown by Australian business, and the co-operation and restraint being shown by the Australian work force, is a sign of the genuine maturity that we saw in the election campaign when the community rejected the outrageous financial bribe offered by the Opposition and took the sober policies of the Government, which are to continue to see this fundamental transition occur in the economy. Mr HOWARD —My question is addressed to the Treasurer. I refer him to his latest examples of self-congratulation about the state of the economy and of the fault for the state of the Australian economy resting in the hands of those overseas. I ask him whether it is a fact that when his Government came to power the gross foreign debt to gross domestic product ratio in Australia was 21 per cent and that it has soared to 41 per cent under his stewardship? Mr KEATING —I should have thought that anybody who had been Treasurer of this country and who had left this economy so debilitated would be so embarrassed to ask such a question that he would hardly manage to stand on his feet and put the question across. The fact is that it was a succession of coalition governments that told us, `Don't worry about it. Commodities will rescue us. Commodities are all we need. Just find another mineral deposit and dig it up; the Japanese will come and buy it and you will need to do nothing else. Don't worry about your intellectual product. Don't worry about the intellectual growth within the economy. Let your education system slide. Don't worry about your services sector'. That was the structure that was left to us. The growth in the current account deficit, as illustrated by that 6 per cent of gross domestic product in 1981-82-in other words, when the rot started to set in-was when the big buildup of debt started. When commodities let us down in 1986, it showed the bankruptcy of 30 years of coalition government. That is why members of the Opposition are so on the nose with Australian business. That is why they are so on the nose with the financial markets around the world. They kept the economy closed, protected and regulated. They managed an over-valued exchange rate and they smothered financial markets. Now they are running around with a grab bag fiscal policy which they know would only bankrupt their country. That is why the Opposition does not cut any ice in the financial markets of the rest of the world. That is why in the major business councils of this country it has no support and that is why it is sitting in opposition without a policy, without structure, without leadership and without any guts. Until the Opposition decides that it has to join the rest of us in responsible policy rather than trying to make cheap, synthetic and transparent points of the kind made by implication in this question, then, and only then, will it start to look like an alternative government. Mr WRIGHT —I direct my question to the Minister for the Arts, Sport, the Environment, Tourism and Territories. Is the Minister aware of the attack, at the recent Australia-Japan trade conference, on the standard of Australian tourism facilities, to the effect that the Australian tourism industry would have to pull its socks up or hand over some facilities to the Japanese, particularly duty free souvenir shops and accommodation facilities? Will the Minister inform the House of the Government's response to this criticism, which even some Australian entrepreneurs admit has some validity? Mr JOHN BROWN —I thank the honourable member for Capricornia for his question. I did see that report of statements made at the Australia-Japan trade conference in Perth yesterday. Unfortunately, some of those comments would quite obviously be correct. I think the Commonwealth has done its job in attracting tourists to Australia. It then becomes the responsibility of hoteliers, developers and State tourist commissioners to make sure that the Japanese are made to feel happy. It is true that there are certain hotel properties in Australia which do not supply baths in the rooms, which, of course, does not please the Japanese. There is a shortage of Japanese language signs in some places in Australia, notably airports-something about which I have been talking to State governments for some years but without too much success. I can assure members of this House that there will be a great increase in the number of Japanese language signs evident in the Australian Capital Territory in the very near future. It is also true that shopping hours are not necessarily suitable to Japanese tastes. It is fair to say that in the last month I have appointed a committee of very responsible people, headed by Mr Bevan Bradbury, the former Chief Executive of Coles Myer Ltd, to hold an inquiry into the exact situation of shopping hours in Australia. As I understand it, we may be on the brink of a breakthrough in terms of the extension of shopping hours in Australia. Quite obviously, Australia's success in attracting Japanese tourists is the envy of the world. It is very obvious that we will have one million Japanese tourists by the end of this century. In August 1987 we doubled the number of Japanese tourists to Australia in August 1986, so obviously we are doing something right. But that does not necessarily mean that our product is perfect; it is not. Unless everybody associated with this industry takes the opportunity to provide the facilities to keep Japanese coming here, the industry will go off the boil. Given the nature of entrepreneurs in Australia, particularly hoteliers, I am pretty sure we will do something about it. Of course, the other shortage is in our capacity to have Japanese speaking people in hotels. One night this week I stayed in Melbourne at one of the leading hotels in Australia and I was very disappointed to find a Japanese customer unable to have his conversation understood by the young lady at the counter who was serving him. Although she was serving him with great graciousness, she certainly had no knowledge of the Japanese language. I rang the hotel the next day to complain about that and I think it will make some efforts to make sure that there are Japanese speaking people on the counter at all times, as well there should be. We are certainly on the threshold of an enormous advantage over the rest of the world in attracting Japanese tourists. If we do not grasp the opportunity while it is there, it will be a great loss not only to this country but also to those entrepreneurs and hoteliers who at this stage are not doing exactly what they should. Mr SPENDER —My question is directed to the Acting Prime Minister. Since the proposed bans by the Australian Council of Trade Unions (ACTU) against Fiji, announced by Mr Crean, are directly contrary to the Government's decision not to impose economic sanctions against Fiji, will the Acting Prime Minister advise the House whether Mr Crean has been contacted and told that the bans must not be put into effect? If so, what was Mr Crean's answer? If he has not been contacted, how does the Government justify inaction on such a serious threat to Australia's foreign policy and to Australia's trade with Fiji? Mr HAYDEN —I have spoken to Simon Crean about this matter on two occasions in the last few days. Of course, I have expressed the concern of the Government should the Australian Council of Trade Unions proceed with bans, as it has proposed. However, it has been pointed out that the actions of the self-declared Government in Fiji against the trade union movement in Fiji have been extremely provocative. Should those actions which have been taken in Fiji be withdrawn, the proposed sanctions of the ACTU would then be reconsidered. Mr Howard —Who's running the country? Mr HAYDEN —Well, wait a minute. The honourable member asked me whether I had spoken to Mr Crean. I am telling him what Mr Crean said. I have not told him what I said. The Leader of the Opposition should not be such a gormless fellow. That is a problem a lot of those on the other side of the House have. There is a pregnant pause while they look for the dictionary. We have registered our concern very firmly. Our opposition to those sanctions has been expressed on a number of occasions, and will continue to be expressed. I will continue to make very strong representations to the trade union movement to withdraw the sanctions. The Minister for Industrial Relations has also been associated with this matter. I conclude by saying that, if it is a simple matter to get rid of an industrial dispute by some fiat or declaration of determined intent on the part of a government, perhaps the Leader of the Opposition and his colleagues can explain why there was such a deplorable record of industrial disputation in this country during the period when they were in government. That level has been greatly reduced by a much more sensible approach to the trade union movement in seeking co-operation in a range of areas and, in particular in problem areas like this, seeking to persuade them and to apply productive pressure. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General) —Pursuant to section 35 of the Criminal Injuries Compensation Ordinance 1983 and the Seat of Government (Administration) Act, I present the annual report on the operation of the Criminal Injuries Compensation Ordinance for 1986-87. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General) —Pursuant to section 171 of the Trade Practices Act 1974, I present the annual report of the Trade Practices Commission for 1986-87. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General) —Pursuant to section 37 of the Law Reform Commission Act 1973, I present the Law Reform Commission's report on debt recovery and insolvency. Mr YOUNG(Port Adelaide-Minister for Immigration, Local Government and Ethnic Affairs) —Pursuant to section 13 of the Local Government (Financial Assistance) Act 1986, I present the recommendations of the Local Government Grants Commission of each State and the Northern Territory for the distribution of the Commonwealth's general purpose financial assistance grants to local governing bodies in 1987-88. The recommendations include the 1987-88 entitlement and the additional payment for 1986-87 for each local governing body. Included with the recommendation is a report of the Tasmanian States Grants Commission relating to grants for payment in the 1987-88 financial year. Mr DAWKINS(Fremantle-Minister for Employment, Education and Training) —For the information of the House, I present a statement of expenditure from the Advance to the Minister for Finance for September 1987. Mr WEST(Cunningham-Minister for Administrative Services) —Pursuant to sub-section 25 (8) of the Public Service Act 1922, I present the annual report of the former Department of the Special Minister of State for 1986-87. Mr JOHN BROWN(Parramatta-Minister for the Arts, Sport, the Environment, Tourism and Territories) —Pursuant to section 30 of the Canberra College of Advanced Education Act 1967, I present the annual report and financial statements of the Council of the Canberra College of Advanced Education, together with the Auditor-General's report for the year ended 31 December 1986. Mr DUNCAN(Makin-Minister for Land Transport and Infrastructure Support) —Pursuant to section 102 of the Postal Services Act 1975, I present the annual report and financial statements of the Australian Postal Commission, together with the Auditor-General's report for 1986-87. Mr SPENDER(North Sydney) —Madam Speaker, I wish to make a personal explanation. Madam SPEAKER —Does the honourable member claim to have been misrepresented? Mr SPENDER —Yes, I do. Madam SPEAKER —The honourable member may proceed. Mr SPENDER —In an article in this morning's Sydney Morning Herald, `Hold on to your pants and wait for New York, says MP', Mr Milton Cockburn has made a number of misrepresentations concerning me. He said that when in the party room the Leader of the Opposition (Mr Howard) announced that the Australian stock market had fallen 400 points, I rushed for the door. This is simply untrue. Moreover, it implies that I left the party room because I was concerned with my investments in the Australian share market. This is equally untrue. In fact, I left because I thought the news to be important and wished to find out more. No item of business involving my portfolio area was listed on the party room agenda. My Australian shareholdings are, and have been for some considerable time, negligible. My total investments in the Australian share market, held either personally or by companies of which I am a director, amounted to 2,100 shares in Debex Ltd, valued as at 16 October at $1.30 each, and 3,000 shares in Gold and Copper Exploration valued at the same date at 28c each, with a total worth at that time of approximately $3,570. No changes have been made in those investments since last Friday, nor have I, or any company of which I am a director, made any other investments in the Australian share market since last Friday. Mr Cockburn also said that I am a director of a number of investment companies. In the context, the implication is that these are important investment companies with significant holdings in the Australian share market. He did not raise either of these matters with me when he spoke with me yesterday and has clumsily misrepresented what appears in my statement of members' interests in which I disclosed my directorships in companies which I described explicitly as trustee companies or as family holding companies. That is precisely what they are. Moreover, these companies do not hold shares in the Australian share market, save for one which holds the shares in Gold and Copper Exploration to which I have referred. Mr Cockburn said that after leaving the party room I was recalled later to it. This is literally correct. However, in the context, the implication which suggests itself is that I was engaged in checking on my investments in the Australian market. I was not; I was recalled from my own room where I was working. Mr Cockburn also described me as a prominent investor in the stock market. In the context, the clear implication is that I am a prominent investor in the Australian stock market. As I have made clear, my investments in the Australian share market are negligible. Furthermore, I have never described myself as, nor would I ever describe myself as, a prominent investor in any stock market. As my statement of interests discloses, I hold investments in some overseas shares. It is no doubt in respect of these investments that Mr Cockburn alleges that I said: . . . when the new Register of Members' Interests was tabled soon we would find things were not as bad for him as they might have appeared when the last Register was tabled. I did not say or suggest that things were in any way bad for me. The conversation with Mr Cockburn was of a jocular nature. My reference to changes in holdings and that he should wait for the new statement of members interests was described by Mr Cockburn himself as `a tease'. The overwhelming, and in my view, defamatory implication underlying this series of gross and unprofessional misrepresentations is that I put my personal affairs before my parliamentary work. As I have made clear, this is entirely untrue. The Clerk —Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers: To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The petition of the undersigned expresses concern that some scientists in Australia are intent on undertaking destructive experimentation on human embryos. This subject was examined exhaustively by the 1985-86 Senate Select Committee on Senator Harradine's Human Embryo Experimentation Bill which received 270 submissions and more than 2,000 pages of evidence. The report of the Senate Committee recommended in October 1986 that the Commonwealth Government make unlawful any destructive experiment which frustrated the development of the human embryo. Your petitioners therefore request the House of Representatives and the Government of the Commonwealth of Australia to: Implement without delay the major recommendation of the Senate Select Committee to outlay destructive experimentations on human embryos. And your petitioners, as in duty bound, will ever pray. by Mr Donald Cameron,Mr Cobb,Mr Cross,Mr Free,Mr Gayler,Mr Katter,Mr Lee,Mr Millar,Mr Moore and Mr Sciacca. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth. We most strongly oppose the process of food irradiation by radioactive Cobalt 60 or any other radioactive substance. We oppose the introduction of regulations that will facilitate the food irradiation process by State Governments. We express our deep concern at this attempt to extend the use of radioactive substances and exposure of workers to radiation. We call on the Government to immediately ban the importation of radioactive Cobalt 60 or other radioactive substances and to immediately disallow the regulations that permit the irradiation of food here in Australia. by Mr Beale,Mr Kent,Mr Milton,Mr Reith and Mr Scott. To the Speaker and members of the House of Representatives in Parliament assembled, your humble petitioners showeth: 1. The proposed Australia Card will have a dramatic impact on the lives of all Australians. 2. Therefore your petitioners request a national referendum on the Australia Card Bill before the proposal is re-submitted to Parliament. As in duty bound your petitioners will ever pray. by Mr Beale,Mr Burr,Mr Ruddock and Dr Woods. To the Honourable the Speaker and members of the House of Representatives of the Commonwealth of Australia in Parliament assembled: The humble petition of the undersigned citizens of Australia respectfully showeth concern: About the evil caused by the fact that x-rated videos with their depiction of unnatural sex and often horrible violence, are allowed to circulate around Australia from Canberra. And your petitioners, therefore humbly pray that such circulation be prevented. The laws regarding obscenity in the media should also be revived and enforced. And your petitioners, as in duty bound, will ever pray. by Mr Beale,Mr Free,Mr Ruddock and Mr Uren. To the Speaker and the Members of the House of Representatives in the Parliament assembled: The petition of certain citizens respectfully showeth: 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 tax and social security fraud in the most cost-efficient and effective manner. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Reject Labor's ID Card proposal to prevent a gross waste of taxpayers' money and a significant infringement of civil liberties. And your petitioners as in duty bound will ever pray. by Mr Cobb,Dr Harry Edwards,Mr Sharp and Mr Webster. To the Honourable the Speaker and the Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of the Lyne Electorate respectfully showeth that: The Hawke Labor Government's ID card proposal is the most far reaching and intrusive piece of Australian Legislation ever, and that on all the evidence available will not tackle in the most cost-effective manner tax and social security fraud. Your petitioners humbly pray that the House of Representatives in Parliament assembled, urge the Government to: Reject Labor's ID card proposal to prevent a gross waste of taxpayers' money and a significant infringement of civil liberties. And your petitioners as in duty bound will ever pray. by Mr Cowan. To the Honourable the Speaker and Members of the House of Representatives in the Parliament assembled. The humble petition of the undersigned citizens of Richmond electorate respectfully showeth that: The Hawke Labor Government has no mandate to introduce its flawed and costly ID card proposal and that the card won't stop tax and welfare fraud and will invade the private lives of Australians. Your petitioners humbly pray that the House of Representatives in Parliament assembled, urge the Government to: Reject Labor's ID card proposal as the Australian public haven't given the Government a mandate to introduce it. And your petitioners as in duty bound will ever pray. by Mr Blunt. To the Honourable Speaker and the Members of the House of Representatives in the Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That the proposed introduction of compulsory Identity Card should be reconsidered and rejected because the proposal: (a) is not a cost effective method of reducing tax evasion and Social Security fraud, and to the contrary, in the form proposed, will facilitate such evasion and fraud; (b) will constitute an unwarranted infringement of individual privacy by the aggregation of a wide variety of personal information of a private matter; (c) will cause a further large and costly growth in the bureaucracy and burden on the tax payer; (d) cannot be guaranteed against misuse for purposes other than for which the introduction is stated to be intended. And your petitioners humbly pray that the problems which Identity Cards are intended to reduce should be attacked by other, more effective methods. And your petitioners as in duty bound will ever pray. by Mr Cobb,Mr Hicks,Mr Hunt and Mr Reith. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This petition of undersigned citizens of Australia respectfully showeth that we strongly oppose the introduction of the `Australia Card' or any other form of National Identification Numbering System. We believe the introduction of a National Identification Numbering System is not only totally unnecessary but is a severe threat to our civil liberties and privacy. We condemn the Government's actions on this matter, particularly as no reasonable nor responsible justifications for the proposal have been forthcoming from the Government. We humbly pray that the House of Representatives, in Parliament assembled, should reject any proposal for a National Identification Numbering System. by Mr Andrew,Mr Downer and Dr Woods. To the Honourable the Speaker and Members of the House of Representatives assembled in Parliament: The petition of the undersigned citizens of the Commonwealth of Australia respectfully showeth: 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 Government to: Ensure that the Department of Veterans' Affairs continues to exist as a separate and distinct Department of State servicing the needs of veterans and their families. And your petitioners as in duty bound will ever pray. by Mr Blunt and Mr Ruddock. 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 proposed introduction of compulsory identification cards should not be considered any further, and in the event of it coming again before parliament it should be rejected because: We do not accept the concept of and ID card as necessary to control social security fraud or tax evasion. It would be an unwarranted infringement of individual privacy and our democratic society, in particular because it being required to work, operate a bank account, enter hospital or enter into any transaction. It would cause a further large and costly growth in the bureaucracy and burden on tax payers. It cannot be guaranteed that the aggregated private information would not be misused for other purposes. The people of Australia should be fully informed and consulted in a referendum before legislation for any such change with such wide-ranging effect is considered, and We call upon the Government to cease immediately any endeavour to introduce this invasion upon our lives. And your petitioners as in duty bound will ever pray. by Mr Cobb and Mr Sharp. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We, the undersigned citizens, respectfully showeth: That we are totally opposed to the introduction of the Government's Identity Card; That this form of national and compulsory identification will be intrusive, costly for taxpayers and business and will not be effective in combating the growing problems of tax evasion, illegal immigrants or social security; That we call upon the Government to improve management systems within the Australian Tax Office and other Departments to crack down on tax evasion and fraudulent practices. And your petitioners as in duty bound will ever pray. by Mr MacKellar and Mr Porter. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The Humble Petition of certain Citizens of Australia respectfully showeth: The Government by persisting with the Australia Card Bill has wilfully rejected the advice and recommendations of the Parliament of the Commonwealth of Australia's ``Joint Select Committee on an Australia Card'' which unequivocally rejected the Government's proposal in these words: ``The majority believes the creation of a new bureaucracy of 2000 public servants within the HIC [Health Insurance Commission], with the sole task of identifying every man, woman and child in Australia, is a wasteful exercise which will not address the problems of tax evasion and social security fraud but will provide the mechanism by which the very fabric of our society will be irreversibly altered, opening the way for the greatest attack on the privacy of individuals as the `Identity Bureau' identifies, monitors, and updates information on every person in Australia.'' (Report, 4.55, page 148) Your petitioners therefore humbly pray that the Government now withdraw the Bill as being contrary to the Common Law and traditional freedoms we have hitherto enjoyed in Australia, and should the Bill be nevertheless re-introduced, that the Members of the House without regard for party should unanimously reject the Australia Card Bill as being contrary to our personal liberties and the national interest. And your petitioners, as in duty bound will ever pray. by Mr Prosser and Mr Saunderson. To the Honourable the Speaker and Members of the House of Representatives assembled: We, the undersigned are deeply concerned at the impact of the new Fringe Benefits Tax on the following grounds: 1.-its severe and damaging effect on business confidence, investment and incentive, especially in the rural, mining and small business sectors. 2.-its capacity to seriously worsen unemployment through the additional costs it imposes. 3.-its extremely negative impact on the competitiveness of export industries at a time when the nation desperately needs to improve its trading performance. 4.-in that it may compel many honest and decent citizens to defy Tax in order to preserve their livelihoods, their business and the jobs of their employees, thus causing hardship, the breakdown of respect for the law and discord within the community. We therefore most earnestly petition you to repeal the Fringe Benefit Tax Legislation forthwith. 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, your humble petitioners showeth: The Federal Government has done nothing to ease concerns that it will support Telecom's plans to introduce timed charges for local calls; and Call upon the Government to undertake that such plans will not be implemented. And your petitioners, as in duty bound, will ever pray. by Mr Donald Cameron. To the Honourable the Speaker and Members of the House of Representatives of the Parliament of Australia assembled. We, the undersigned, being appalled that the Government has set no penalty for the possession of child pornography, and has set no penalty for importing unclassified child pornography, do ask that Parliament urgently legislate to: Make the importation of child pornography, and the possession of child pornography, and all tapes and goods banned by Customs, to be a criminal offence, with deterrent penalties, and Close the Customs barriers to pornography in the A.C.T., in respect of X-rated videos, (and ER) and END the shameful Canberra trade, and the Mafia Connections. Because 98% of Australians in other States have banned X-rated videos. Because the trade is still flourishing, and its availability escalates sexual crime. Because importers of child pornography face only a fine for lying. Because child pornography pedlars are safe if they cross a border, and cannot be extradited for a summary offence. Because anyone can have these tapes in their possession for private use. Because the Government does not intervene in that. Your petitioners therefore humbly pray that you will give this matter earnest consideration. And your petitioners, as in duty bound, will ever pray. by Mr Dawkins. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth that we, the undersigned support the need for Government Funding to enable the continuation of the Naranga Work Education Centre and the Nepean Education and Vocation Centre, both of which cater for students with disabilities and are based at the Frankston College of T.A.F.E. And your petitioners, as in duty bound, will ever pray. by Mr Dawkins. To the Speaker and Members of the House of Representatives. The petition of the undersigned do respectfully showeth that pornographic material relating to children is deleterious to the health and welfare of children and society as a whole. We respectfully urge the Government to ban all child pornography from entering or from being produced in Australia. And your petitioners in duty-bound will ever pray. by Ms Fatin. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of citizens of Australia shows: That the people of New Zealand and the New Zealand Government have given an example to the world in their efforts to achieve a nuclear free South Pacific, and such decision being endorsed by the people at a general election. Your petitioners therefore pray that the Australian Government support the principled stand taken by the New Zealand Government and urges it to condemn any efforts by the United States Government to impose economic or other sanctions on New Zealand in retaliation for their stand on nuclear vessels. We further urge the Australian Government to urgently implement its policy to promote the development of zones of peace and nuclear free zones in the Indian and Pacific Oceans. by Mr Kent. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This humble petition of the undersigned citizens of Australia respectfully sheweth 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 McVeigh. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We, the undersigned citizens, respectfully showeth: That we are totally opposed to the introduction of the Labor Government's Identity Card. We consider that this form of national and compulsory identification will be intrusive, costly for taxpayers and business and will not be effective in combating the growing problems of tax evasion, illegal immigrants or social security. We therefore ask the House to take action to prevent the implementation of this legislation. And your petitioners as in duty bound will ever pray. by Mr McVeigh. To the Right Honourable Speaker, and Members of the House of Representatives in Parliament Assembled. The humble petitioners of the undersigned citizens of Australia respectfully showeth (closure of social security offices at Corrimal, Warrawong & Dapto) Your petitioners therefore humbly pray that the Parliament of Australia will (keep said offices open with full services as at present 21 August 1987) And your petitioners as duty bound will ever pray. by Mr Martin. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens respectfully showeth that your petitioners are gravely concerned at the failure of the government to 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 is duty bound will ever pray the Government grant this request now. by Mr Allan Morris. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectively sheweth 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 nor permit any action to be taken to make any change without the approval of the Australian people by referendum. And your petitioners as in duty bound will ever pray. by Mr Porter. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Richmond electorate respectfully: Condemn the Hawke Labor Government's high tax policies and state our total opposition to the introduction of any new taxes including a wealth tax on the net wealth of individual Australians and Australian business. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Not introduce an investment destroying wealth tax into the House of Representatives. 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: 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 Hawke Labor Government's Industrial Relations Bill will increase industrial disputation, bankrupt companies, and give the union movement total and absolute power over the Australian community. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Reject Labor's Industrial Relations Bill to save Australia from the actions of militant unions and give our economy a chance of recovering. 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 Murray electorate respectfully showeth that: The August 1st changes to Medicare Benefit rebates are unfair to patients, such as those with chronic disabilities requiring consultant physician or after hours consultations. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Amend the Health Insurance Act and the National Health Act to restore the original rebates. And your petitioners as in duty bound will ever pray. by Mr Lloyd. Petitions received. Mr DEPUTY SPEAKER(Mr Leo McLeay) — Madam Speaker has received a letter from the Deputy Leader of the Opposition (Mr Peacock) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The vulnerability of the Australian economy because of the sheer size of our foreign debt burden and the seemingly intractable deficit in the current account of the balance of payments. 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 PEACOCK(Kooyong)(3.02) —The editorial in today's Australian newspaper is just another indication of the growing numbers of people who are joining the Opposition in its criticism of the Government's risky economic strategy. Honourable members will know that, since I took the position of Deputy Leader of the Opposition, I have been stressing the need for this Government to force the pace of adjustment of Australian economic policies. Indeed, I will show honourable members, through a reading of the editorial in today's Australian, just how it fits with what honourable members will recall having been said in this Parliament. I will quote only elements of the editorial: . . . the sheer size of our foreign debt burden and the seemingly intractable deficit in the current account of the balance of payments make Australia one of the most vulnerable economies in the Western world. After talking about how vulnerable we are it goes on to say: But the fact remains the pace of adjustment has been too slow and, it now appears, dangerously so. It continues: The Government's own economic forecasts suggest only a modest improvement in the current account of the balance of payments this financial year. For this it has rewarded itself with lower interest rates as the Reserve Bank prints more money, raising the risk that the current account could even deteriorate. These are precisely the points that the Opposition has been making. We in Australia are vulnerable because the Government will not force the pace of adjustment. The key question is: Why is Australia one of the most vulnerable countries in the Western world? Why after four years has the Government failed to put Australia's economic house in order? This Government's deficits-the disastrous Keating deficits-swallowed Australia's domestic savings and forced us as a nation to borrow overseas and run up a huge foreign debt. In other words, with these early Budgets and the large deficit, the rot was already setting in before the decline in our terms of trade in 1985. I mention that because the decline in our terms of trade was not, as the Government has argued, the cause of our external problems; it simply exacerbated an already serious situation. The failure of the Government to bite the bullet on government expenditure-that is, to reduce public sector demand-is one of the major reasons why Australia is, as the Australian puts it today and as we have been saying, `one of the most vulnerable economies in the Western world'. The other major reason, of course, is wages policy. Year in and year out the Government's wages policy delivers nominal wage increases well in excess of productivity. It is all very well for the Government-in particular, the Prime Minister (Mr Hawke) and the Treasurer (Mr Keating)-to say that some adjustment to fiscal and wages policy is taking place. That is hardly the point. The point is that the Government should abandon its high risk, slow adjustment economic strategy, especially in view of the increased danger of the economy being subject to adverse shocks from overseas. This is the current economic debate. If one were to listen to the Treasurer day after day one might think that the debate is about what the previous Government under Malcolm Fraser did, what it was like in those days and what this Government has done. Honourable members opposite do not address the contemporary issue and that is why more and more people are endorsing our call for a forcing of the pace of adjustment. This is the issue raised by members of the Opposition; it is the issue raised by the colleague of those opposite, Senator Peter Walsh, the Minister for Finance. It has been raised by the editorial in the Australian. And those honourable members opposite who listened to AM this morning on the Australian Broadcasting Corporation would have heard the issue raised by Allan Wood of Syntec International. There have been others; one could go on. A groundswell of opinion has been coming in to endorse what we have been saying. But yesterday the Treasurer demonstrated that he has completely missed the point of the current economic debate. He rambled on. We heard him again at Question Time today. He either rambles on in an incoherent manner or he seeks to dump it on people personally. He cannot or will not address the economic issue of the day. He is completely missing the point about the current economic debate. He rambles on about the past performances of governments. That is on the record for everyone to see. He reaffirmed his right to comment on the United States economy. Of course he has a right to comment on the United States economy. But let him do it from a position of credibility. This applies also to his comments about the United Kingdom. I would like to get to the substance of the matter. The Treasurer is very critical of other countries' abilities to adjust their economic policy. They should, he claims, take a leaf from Australia's book. The clear implication of the Treasurer's remarks is that the disruption on the world's stock markets is due in part to the failure of other governments' policies, the failure of the international monetary system and the management of exchange rates. Of course, the Australian Government is not to be blamed for any adverse impact of a disruption to world trade and the Australian economy! Well, the fact is that the Australian Government can be criticised for not adopting a faster pace of adjustment on fiscal and wages policy to ensure that we can weather any storm in the world economy. As we stated at the time of the Budget, the Government has been following an incredibly risky, indeed irresponsible, policy. It failed to reduce the vulnerability of the Australian economy. Instead, it presided over, for example, a quadrupling of our net foreign debt. Furthermore, how does Australia's economic situation-that is, Australia's vulnerability-measure up against that of the United States? I could do a comparison with Argentina. Senator Walsh asks us so to do. That is obvious. But I have chosen the country the Treasurer seeks to lecture, the United States of America. The Organisation for Economic Co-operation and Development forecasts the United States current account deficit as a percentage of gross domestic product at 3.3 per cent, compared with 4.6 per cent for Australia for 1987. In 1986, the gross external debt for the United States as a percentage of gross domestic product, as I mentioned at Question Time, amounted to nearly 13 per cent. In Australia it was around 40 per cent-some difference. Furthermore, the Treasurer's criticism of wages policy in the United States appears well wide of the mark. It is difficult to sustain the criticism of the alleged inflexibility of the relatively decentralised wages policy in the United States while claiming that Australia has had apparent success with its centralised system. The fact is that the United States wages policy has delivered an annual average rate of wage and price inflation of about 3.3 per cent over the 1983-86 period. In contrast, in Australia wages and prices have grown at an annual average rate in the neighbourhood of 7 per cent. Based on data published by the International Monetary Fund, average hourly earnings in manufacturing in the United States grew at 10 per cent from 1983 to 1986 while over the same period average weekly earnings in Australia grew by 25 per cent. We can go on. On the prices front, consumer prices in the United States grew by 10 per cent, compared with 21 per cent in Australia. There is comparison after comparison. We can look at the criticism made of the United Kingdom. It was interesting to hear the Treasurer focus on the monetary aggregates in the United Kingdom. In Australia the rate of growth of monetary aggregates has accelerated, by and large, for the past six months or so. For the 12 months to July 1987, M3 grew by 13.6 per cent, while broad money supply rose by over 11 per cent. Indeed, the recent acceleration in monetary aggregates in Australia, coupled with a projected growth of 6.5 per cent in average weekly earnings, casts doubt on the Government's forecast of an increase in prices of only 6 per cent during 1987-88. The point, therefore, is: what will the Government do now, and what will the Government do for the future, to make Australia less vulnerable to changes in the world economy? What is the Government doing with its fiscal policy? Is there just a continuation of the same complacency shown in the last Budget, which was a nibble here and a nibble there, leading to a cut of 1.2 per cent in outlays in real terms, or will the Government really start to wind back public sector expenditure? Yesterday the Treasurer asked what the Opposition could cut. As we have said, we could consider first Senator Walsh's nominated list of projects. But of course, his demand is that the Government do that first. On top of that, we could add in many of the expenditure cuts outlined during our last election campaign. We outlined savings from Medicare, the supporting parent's benefit, changes in the unemployment benefit and the abolition of commissions and quangos and so on. That is what we would do. We would cut government outlays, as we have said, by several percentage points of gross domestic product to fund tax cuts. But let us hear again what this Government is going to do. We can depend on getting obfuscation and abuse from this Government and this Treasurer, and we will hear it again from the Minister for Employment Services and Youth Affairs and Minister Assisting the Treasurer (Mr Holding), this inadequate man who supports the current Treasurer, when he responds today. They want to dump it on a previous government, which is not relevant today, and say how good they are. Then, if it appears that someone has greater ability than the present incumbent, they will seek to use some form of jargon. They will never tell the Australian people what they are going to do to prise us out of the difficulties they have got us into. Where is their expenditure cutting program? How will they release resources from the public sector for use in the private sector? The Treasurer does not have an answer, so it is not surprising that he is not in the House to participate in this debate. The Government is quite prepared to continue with business as usual with a huge government sector. So much for cutting government expenditure. The same applies to the Government's wages policy. Earlier this year the Government negotiated an increase in average weekly earnings of 6.5 per cent for the third year in a row. Now it is telling us it will not support the Australian Council of Trade Unions today, and it has submitted to the Australian Conciliation and Arbitration Commission that what was being profferred ought to be postponed because of the current circumstances. What will the Government tell us next week, or later when the case comes up? The question can yet again be asked: What is the Government doing? How is it going to respond to the current situation in which Australia is one of the most vulnerable economies in the Western world? Will it just continue, as I say, with business as usual, where wage increases and to a large extent inflation are politically negotiated variables set with barely passing reference to our position in the world economy? The Government has the opportunity at least to start to put Australia's wage-price situation in order at the current national wage case. That case has been deferred, and correctly so. On top of that deferral, the Government will have another opportunity when the national wage case is heard next year to set up a wages policy for 1988-89. The fact is that this Government reeks of complacency. It has brought down a complacent Budget for 1987-88, it negotiated a complacent wages package earlier this year and it has been complacent about the recent growth in monetary aggregates. Now, as the debate on the pace of adjustment takes off in the face of the possibility of shocks to the world economy, the Government's attitude is `She'll be right', or, as the Treasurer says, `Don't waste my time. I have no time to talk to you; I have no time to talk to the Australian people. I will talk to the money market and the mates who look after me on my pig killing holidays or who put me up in their apartments while I watch the America's Cup'. It would be interesting to know whether the old travelling allowance was picked up then. Mr Punch —Oh, come on. Mr PEACOCK —The honourable member should not show so much concern on his face. These guys opposite dump it on people on this side day after day, and have done so for years. The first time we give it back to them, they squeal. They are the most gutless bunch of hypocrites I have seen in this place. They squeal that it is the system that is wrong and that it is the Opposition that is crook. They cannot defend their own inadequacies and they cannot proffer what they are going to do on the economic front. We are saying to the Government: `Debate the pace of adjustment; tell us the changes you are going to make on fiscal policy and on wages policy'. But the Government runs away from that all the time. The same old song will come today from the inadequate Minister Assisting the Treasurer-`Don't waste my time'. Essentially, the Government has peddled the lie that it has fixed macroeconomic policy. The problem is that now, nobody believes it. It says it will set out on microeconomic issues, but it has deferred that. It cannot explain privatisation even to its own Party. The labour market is crying out for reform. There is a crying need for deregulation, and also a need to adjust macro- economic policies. It is not good enough for the Government to say it has fixed it; it has not. As the Australian newspaper says, the Government has put us in a most vulnerable position. Instead of playing with the issue it should proffer its policies. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. Mr HOLDING(Melbourne Ports-Minister for Employment Services and Youth Affairs and Minister Assisting the Treasurer)(3.17) —It ill becomes any member of the Opposition to come into this House and accuse the Government, to use the words of the Deputy Leader of the Opposition (Mr Peacock), of never telling the Australian people what it is going to do. That is what he said. Less than four months ago the Deputy Leader of the Opposition was locked into the leadership of the now Leader of the Opposition (Mr Howard), who was promising the Australian people massive tax cuts on the one hand while, on the other hand, promising massive cuts in the revenue. But he said to the Australian people, `Don't ask us what cuts we are going to make; don't ask us where we are going to make them, whether they will be in education, social welfare or defence, because we would not want to upset you'. The Opposition got its answer from the Australian people then, and it was the answer it deserved to get. The people were not going to be conned once again by the Opposition's phoney fistful of dollars economic bait. What has happened since then? There has been a certain amount of shuffling on the other side. The once Leader of the Opposition has become the Deputy Leader of the Opposition, and I will say this for the honourable gentleman: he has desperately tried to achieve some level of learning in terms of economic reality. He has picked up a couple of new buzz words-he is pretty excited about them-and they are `the pace of adjustment'. I say to the Deputy Leader that he cannot learn it all at once. Just imagine his excitement this morning when he picked up the Australian newspaper and, goodness me, it too had heard about the pace of adjustment. So with excitement, and indeed some trepidation, he came into the House to tell us that the real accusation against the Treasurer (Mr Keating) is that he is not forcing the pace of adjustment. What does the Deputy Leader of the Opposition have to say about this? What is the presumption in his argument? The terms of his matter of public importance refer to the current account deficit. As the Treasurer has said in Parliament today, and as he said when he introduced the Budget and subsequent to that, the current account deficit is too high. There is no argument about that. Indeed, the Treasurer himself confirmed that today, so there is no argument between the honourable gentlemen opposite and us that the current account deficit is too high. What the argument is about is how it is reduced. That is not just a matter of putting together a glib phrase such as `increasing the pace of adjustment'; it is about producing a total economic strategy, a total economic philosophy. I say this for the Deputy Leader of the Opposition: he realised the weaknesses in the policies put by his former Leader. Within a few weeks of being given the responsibilities of shadow Treasurer he indicated his concern to take the policies of the Opposition in another direction, and well he might. I commend him for that because there was a level of reality in it. His problem was that the Leader of the Opposition has since confirmed the same old philosophy, the same old economic jargon. When all of this jargon is stripped away, what the Opposition said yesterday and what the honourable member for Kooyong (Mr Peacock) is saying today is that we have a debt problem and we must fix it. There is no argument about that but implicit in the criticism of the honourable gentleman opposite is that what the Opposition proposes is somehow or other an alternative and better solution. The first point that has to be made is that over the past two years the Australian economy has been adjusting rapidly and consistently to our terms of trade collapse. Through the process of the accord we have unwound wage indexation and put in its place a two-tier system which better equates reward with productivity and performance. We have done this in a climate of business and union co-operation and in the context of further declines in industry disputation. In the year ahead we expect to achieve a further fall in real unit labor costs following successive declines in each of the years since the Government's election in 1983. The most important point is that we have achieved these policy and labour costs without acrimony or bitterness but with co-operation. In 1987-88 we will not only continue to secure competitive wage outcomes but also make major inroads into those restrictive work and management practices which have for far too long held Australia back. This prospect and the results already achieved to date were positively acknowledged as recently as two days ago, in the presence of the Deputy Leader of the Opposition, by both the outgoing President and the new President of the Metal Trades Industry Association of Australia, in Canberra. That was referred to by the Treasurer in the House today. There was a very strong endorsement of that aspect of our wages policy from industry. It is all very well for the Deputy Leader of the Opposition to say today, `Let us go back to the days when we had confrontation at almost every level of our industrial life'. It was partly that confrontation which got Australia into the mess it was in when we came to government. The other weapon in our adjustment armoury has been fiscal policy. Under a Labor government the level of Commonwealth spending has been cut significantly. It is just as well that the Leader of the Opposition is not present because he and other honourable gentlemen opposite have to be reminded-admittedly, the Deputy Leader of the Opposition had other responsibilities at that time-that when the Leader of the Opposition left office he left Australia with a deficit of nearly $10 billion. He left us in an economic mess. In 1983-84 spending amounted to 29.3 per cent of our gross domestic product (GDP). In this Budget that figure has been slashed to 26.8 per cent and the Budget has been balanced. This Government has consistently brought down the deficit since its election. In 1983-84 it was 4.1 per cent of GDP; in 1984-85 it was 3.1 per cent of GDP; in 1985-86 it was 2.4 per cent of GDP; in 1986-87 it was one per cent of GDP and in the year ahead it will be zero. In terms of total public sector borrowing, we have cut the public sector's requirement for domestic and national savings from the Leader of the Opposition's 8 per cent of GDP to 2.4 per cent for 1987-88. These budgetary changes and this level of discipline over the States amounts to the most radical shift in fiscal policy of any Organisation for Economic Co-operation and Development country. That fact has been widely and freely acknowledged in Australia and by international financial analysts and other governments. It is merely churlish and childish of the Opposition to deny this economic reality. As a result of these successes on the wages and budgetary fronts, and because of a general improved outlook for our trade performance, monetary conditions in Australia have eased by a significant amount over the past 12 months. Ninety-day bank bills have fallen by nearly 7 per cent in the past year, prime lending rates have fallen substantially and, much to the despair of the Opposition, home loan rates have eased as well. However, the Government acknowledges quite freely that the overwhelming challenge facing Australia is to reduce our dependence on debt by trading out of our current account deficit. We, as a government, have been honest and open about this matter since commodity prices fell disastrously during 1985-86. We have said time and time again that living standards cannot go up but must come down if our export earnings are being driven down. It was on the basis of our frankness and our direct record in confronting these problems-they were put fairly and honestly to the Australian people-that we were re-elected only three months ago. In the period since the election we have consolidated the policy shifts on which we have campaigned. There is a consistency of approach and an advocation for doing what is right which separates this Government from virtually all honourable members opposite. Most markedly, it is that difference in approach which I think characterises the approach of the Opposition and the Government. The Opposition was defeated in the last election because it did not have a coherent economic policy. It made a series of promises which the average Australian realised, as did every economic analyst, could not be made to work. If there had been any attempt to implement these promises our deficits would have gone through the roof. That is the reality and the Opposition cannot escape that fact. It is all very well to use buzz words and to talk about forcing the pace of change but the reality is that we were entitled to hear from the honourable gentleman opposite a coherent, alternative, economic strategy and we have not heard it. We will not hear it because the honourable gentleman is still working on it and he is still trying to get his Leader to change his mind. We wish him well in his endeavours to unlock his Party from the hopeless fiscal and economic policies that were produced at the last election. When he succeeds we may hear from him something that sounds like a serious alternative economic strategy. But as long as he is locked into the kind of economic nonsense mouthed by the Leader of the Opposition he, the Treasurer and I know that the honourable gentleman is forced to grab the latest piece of economic jargon that comes out of his advisers to try to argue that this Government is failing, that it is not facing its responsibilities, and to suggest that somehow or other, buried within his head-not in his Leader's head-there is some kind of economic strategy which he will ultimately get out. We hope this will happen because when that occurs we will be in a position to have a serious economic debate and, hopefully, some alternative strategies can be put not merely before the Parliament but before the Australian people. But before that happens the Opposition and the shadow Treasurer have to move their Party to a position in which it is able to tell us what it would do if it were in government. Opposition members cannot say, `Oh well, it is really up to the Minister for Finance; we will rest behind him. After he has told you what he knows we will tell you what we know'. I am sorry for the shadow Treasurer, the honourable member for Kooyong, because that is simply not good enough. We believe that he is trying to get it right, but we believe that he has real problems in moving both the Leader of the Opposition and some of the right wing economic gurus who back him. It is not an easy task. I want the honourable member to know that we feel for him. I want him to know that we know that he is doing his best. But we are entitled to say to the people of Australia that his best is not good enough when it simply amounts to walking into the Parliament, puffing and panting and using all his rhetorical skills to tell us that what it is all about is forcing the pace of adjustment. He thinks he is lucky because there is an editorial in the Australian which states that that is a good idea. But that is not an alternative economic strategy. The Opposition did not have one before the last election and it does not have one now. This matter of public importance is just one further example of the economic bankruptcy of members of the Opposition. Dr HEWSON(Wentworth)(3.32) —It is a sad commentary on the Hawke Government and its performance as an economic manager that it takes something like a 40 per cent fall in our currency or the largest stock market crash in history to get its attention and to get it to start to think about whether this country is vulnerable in current economic circumstances. Indeed, even yesterday in the House, in the midst of the crash, the Treasurer (Mr Keating) was trying to perpetuate the illusion that there was nothing wrong; that everything was turning around; that he had the right policies in place; that he did not need to adjust his policies; that he did not need to change his forecasts. But surely, almost anybody anywhere else in the world could have told him that the chances of a world recession are now a lot greater than they were just a few days ago. However, he was not going to waste his time dealing with those who questioned his judgment. He just turned around and walked out of the House. The facts should be clear. This country is particularly vulnerable in current circumstances. The Government has not addressed our fundamental economic problems. What policy changes it has made latterly-and admittedly now more in the right direction-have been far too little, far too late. I suggest that the Government should spend more time taking some of the tough decisions that are required in current circumstances than in wandering around this country and the rest of the world trying to create the impression that it has taken most of those tough decisions. In looking at our present vulnerability, we see that the key element is the size of our international debts. Our debts have reached banana republic proportions; we are well down the Argentinean road. And of course, that is compounded by the fact that our balance of payments is still both structurally and cyclically weak. This makes it very difficult for us to service even those levels of international debt. It already takes more than $1 in every $3 of our export earnings just to pay the interest and meet the contractual principal repayments on those debts. If one looks at the structure of our balance of payments, one sees some very disturbing features. We are still very much a commodity exporting country. We have never been able to reap fully our potential as an exporter of manufactures or, more recently, as an exporter of services. Moreover, our exports are concentrated very heavily on just a couple of markets-most importantly, Japan and the United States of America, two countries that are very close to an international trade war as a result of the protectionist sentiment that has arisen in the United States. Similarly, if we look at the import side we see a very heavy dependence on the importation of capital equipment which makes it very difficult for us to capitalise on competitive opportunities that could flow from a fall in the exchange rate by way of import substitution. By looking at the data that the Australian Statistician has released in recent days, we see that the J-curve has recently stalled. For the last five or six months this `saviour' of the Government has stalled; the curve has flattened out and will not do the job that the Government is counting on it to do. As a result of our current account deficit, we are now heavily dependent on capital inflow and the sustained confidence of international financial markets. To maintain that confidence is not easy because many of those financial markets look at our currency as an exotic or speculative currency and they are quite happy to move in and out with great vigour on occasions. Apart from those balance of payments factors, there are a host of other structural factors which have made our life very difficult and which prevent us responding to external shocks in the way that we should. We have a tax system that imposes excessive taxation burdens on individuals and corporations. It saps initiatives and incentive. We also have a very rigid and inflexible labour market, despite all the Government's rhetoric to the contrary. It is a labour market that does not allow us to respond in a realistic way to the challenge of international competitiveness. Finally, we still have an attitude to protection and industry policy that is still far too inward looking and infantile in its orientation. Of course, the Government has recently started to pay lip service to some of these things, suggesting that it will make some of the changes of a micro nature that are required to get our house in order, as well as suggesting that its macro policies are broadly in the right direction. But at the macro level the Government's strategy is just like it was before. It is entirely dependent on growth; it is of little more use than a grab for growth. Its whole strategy depends very heavily on a sizable pick-up in growth. The Government needs growth for the taxation revenue that it fed into its last Budget which it hopes will end up balanced. Of course, that is an illusion. It also needs growth to bring the productivity gains that are required to offset some of those excessive wage deals that it has done to satisfy its political constituency. And, the Government needs growth to sustain the confidence of foreigners in our economy and to sustain that crucial capital inflow. The simple fact is that the Government has not taken the decisions it should have taken and therefore will not get the growth it thinks it will get. Disturbingly, it seems that it has learned virtually nothing from the past, including its past attempts to chase growth. Honourable members might remember what happened in 1983 and 1984, which was the last time the Government got hooked on growth. Just as growth was not sustainable then, it is not attainable now. Indeed, many of our current difficulties have arisen primarily because of some of the very soft decisions taken in the economic policy area in 1983, 1984 and 1985. Do honourable members remember the nonsense that this Government used to peddle around this country about consensus? Do honourable members recall how the accord would control inflation so that the Government could stimulate growth by expansionary monetary and fiscal policies? Do they remember the situation around the middle of 1984, leading up to the election, when the Treasurer eased monetary policy quite significantly by forcing the Reserve Bank of Australia to push down interest rates? I would suggest that the Government has learned virtually nothing from those experiences. It got its just deserts then. Our exchange rate collapsed on three occasions in 1985 and 1986 as financial markets voted with their feet. And it is about to get its desserts again. The Government has learnt nothing as the current economic environment is, in many respects, a repeat of 1984-85. Again it is awash with revenue. Again it sees growth picking up. And, already, it has started to reward itself by pushing down interest rates and paying excessive wage increases. Interestingly, the Treasurer has two responses to economic shocks such as we are experiencing. Either he blames somebody else or he sits quietly by in the desperate hope that it will all go away. Just look at the list of excuses that he has used in recent days. He has referred to the fall in our terms of trade-as if that is something new; it has been falling for about 25 or 30 years. He has referred to the fact that the States are still spending, not him; or that President Reagan has not got his house in order; or that the Fraser Government did one thing or another, or whatever. He is a past master at this game of passing the parcel. Have honourable members ever seen him when he stands up in the House? As soon as he turns around to talk to his mates they all duck because they think the parcel is about to come their way. Alternatively, he sits back and hopes the problem will just go away. He wants a quiet life. He would like to be able to go to ground in the next several months. Why? It is because he wants an easy passage to the position of chief executive. He does not want to antagonise any more of his mates. Indeed, he has to win some new mates if he is to get there. So deals get done, but the essential decisions do not get taken. It is just like the last Budget with all its nonsense and rhetoric about fiscal discipline, balance, expenditure restraint, tax reform, retiring debt and so on. Those are all illusions. None of it stands up to close examination. Even yesterday in the midst of a stock market crisis we had the almost unbelievable spectacle of a Treasurer who seemed completely oblivious to what was going on around him. For he came into this House and defended another increase of 1.5 per cent in the first tier in the current wage case. He did so even though it will contribute to a wage increase this year that is nearly double that of our trading partners. This is not economic rationality. He surely must have done a deal with one of his Australian Council of Trade Union mates. Our balance of payments is still in fundamental deficit. Our debt is still growing alarmingly. It will not stabilise, even on the most optimistic assumptions, until the early 1990s and, realistically, probably not until the early 2000s. The truth is that the Government has not taken the necessary economic decisions. Unfortunately the necessary policy adjustments are about as slow in coming as one of the Treasurer's tax returns. Mr PUNCH(Barton)(3.40) —As a result of an amazing set of circumstances, today on the front page of the Australian Financial Review, one of the most prestigious newspapers in this country in terms of economic discussion, is a story about how the leaders of the G7 group, as they are known, the major economic powers of the world, have reaffirmed their commitment to stable exchange rates in light of what has happened in the world economy in the last 24 to 48 hours. I urge honourable members opposite to have a good look at this article by Mr Stephen Hughes. It talks about Mr James Baker's reaction. It talks about the reaction of the German Finance Minister, Mr Stoltenberg, and the reaction of the President of the Bundesbank. It talks about the reaction of the Governor of the Bank of Japan. On the very day that we see a united, confirmed world economic response to what has happened, members of this pathetic Opposition stand up in this place and go on with the usual drivel they have gone on with for the last 4 1/2 years. Only now they have got themselves a professor to do it as well. They try to blame this Government for what has happened, saying, `What has happened in the last 24 to 48 hours, although it is not really the Labor Government's fault, sort of is its fault and we will blame it'. They are attempting to play on people's ignorance and fear. They have no ground for doing either. They will come well and truly unstuck by the end of this week if they continue with this sort of economic drivel. The Minister Assisting the Treasurer, the honourable member for Melbourne Ports (Mr Holding), has already gone into the record of what this Government has done in world terms very quickly to adjust this country to the problems we face in terms of our foreign debt and of the new economic world order. He has mentioned the reduction of government spending from 5 per cent of gross domestic product (GDP) to zero. It is important to note that that 5 per cent was a Liberal-National Party legacy. The Minister Assisting the Treasurer has also mentioned the 10 per cent reduction in real unit labour costs that has been achieved by the Labor Government and the labour movement in the last 4 1/2 years. Suffice it to say what the Minister Assisting the Treasurer has said here today: this country is responding better than any other country in the Organisation for Economic Co-operation and Development to the changed circumstances, under more difficult conditions than any which face other OECD countries. The Labor Government is achieving macroeconomic and micro- economic flexibility with our new emphasis on employment retraining, work skills and so forth. In light of all that, honourable members opposite have had nothing to say today about what their policy response would be. In Question Time today Opposition members talked about debt having risen, in relative terms, as a percentage of gross domestic product. That is very good. The Treasurer (Mr Keating) has been telling them that for 12 months. The shadow Treasurer, the honourable member for Kooyong (Mr Peacock), forgot to mention a couple of things today. He forgot to mention that current account deficits are cumulative and that we inherited an institutional and structural imbalance from the previous Government. They were problems from 1975 to 1983. He forgot to mention the fact that the problem with a cumulative current account deficit, like any other debt, is that it feeds off itself. The shadow Treasurer forgot to mention where the problem started. He forgot to mention that 25 to 30 per cent of our net external debt of $81 billion is devaluation-related. The decline in the value of our currency has boosted the dollar figure of our overseas debt. He forgot to mention that this transition has occurred at a time when our terms of trade have declined by 16 per cent in real terms, as opposed to the position of many other nations in the OECD. The Treasurer mentioned today the fact that West Germany's terms of trade have risen by 30 per cent. The shadow Treasurer forgot to mention that. He forgot to mention that if we had the same terms of trade today as we had in 1985-86 our foreign debt would be considerably worse. The Opposition is attempting to change tack. This was highlighted in the Financial Review on Friday, 11 September, in an interview with the shadow Treasurer. Opposition members are now attacking the Government, not on the fundamentals-they have lost that argument; they know we are right-but about the pace of change in Australian economic policy. They are going back to the old, cliche-riddled policies they had in the leadup to the 1984 election. They had no real policy options, just cliches. Let us put a few questions to the Opposition this afternoon and let us demand a response. The Government is here in the House every day when the Parliament is sitting for its key Ministers to be questioned. The Opposition has not yet found a basic problem in what we are doing. Yet it comes into this place and talks about the pace of change, without any substance or concrete policy. What is the Opposition's alternative policy? Is it a further reduction in real wages; if so, by how much and how is the Opposition going to achieve it in the present institutional framework of Australian industrial relations? The Opposition's last attempt in 1980-81 was not bad. There was a 39 per cent blowout in wage increases in the metal industry alone. Is the Opposition going to attempt to implement the big baseball bat industrial relations policy again and destroy the consensus which is now achieving, for the first time, work practice changes which are so badly needed in this country and which were built in the private sector over 30 years-for the vast majority of which time the Opposition was in government? Is the Opposition's response to cut the deficit or to cut government outlays further? If so, by how much and where? The honourable member for Kooyong, it has to be remembered, made his name with the pensioners in this country for opposing the assets test. What is his response to government outlays such as the provision of pensions for everybody? Is he going to scrap the assets test? Let us hear a response from the shadow Treasurer-something concrete. He is condemned by his own words in the article in the Financial Review on 11 September. He said: But I would not want to be in a situation as Treasurer where I would be seeking to implement a sudden turnaround-it would be too disruptive. So at the same time as the honourable member is criticising us for the pace of change he says that he does not want to be too disruptive. It has to be remembered that during the election campaign his Leader spelt out that the reduction in the deficit this year under the Opposition would have been a mere $270m, to phase in its tax cuts. Opposition members talk about the pace of change! They talk about the pace of change with their own Liberal Party tax policy. What a joke! While we are talking about changing basic institutional and economic foundations in this country, and are doing so to the applause of the rest of the OECD countries, the great pace of change the shadow Treasurer is talking about is to bring out his new Liberal Party tax policy. When is he going to do it? By mid-1988, and announce it soon after. We are here grappling with the world's economic problems, the likes of which no government in the history of this country has ever had to face, and the honourable member for Kooyong cannot even change his own Party's policy before mid-1988. How hypocritical can one get? If the honourable member wants to talk about further cuts in government outlays, if the Opposition were to be elected to government and somehow magically produced a $2 billion surplus, let us note that a mere 0.7 per cent of Australia's gross domestic product would be given back from the public call on borrowings and savings to the private sector. We would go from a position of about 2.5 per cent of gross domestic product in the net public sector borrowing requirement, nearly all of which is for the States in prospect for 1987-88, back to 1.8 per cent. So what? What would that achieve, apart from massive social, economic and industrial dislocation in this country. The truth is that members opposite, the new right wing ideologues, do not want to acknowledge that Reaganism in the United States has failed. America has caught a cold and has sneezed and the rest of us are in danger of ill health. Those opposite do not want to acknowledge that. In that case, I suggest that they read Robert Hadler's article in today's Australian in which he says: While the Australian Government has taken great strides to reduce its twin deficit problems, the United States administration stubbornly refuses to face up to its own economic problems. I remind those opposite of that article and urge them to look at it to see who is right and who is wrong. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. The discussion is concluded. Bill received from the Senate, and read a first time. Ordered that the second reading be made an order of the day for the next sitting. Mr WILLIS(Gellibrand-Minister for Industrial Relations)(3.52) —I move: Excise Tariff Proposals Nos 11 and 12 (1987), and Customs Tariff Proposals No. 18 (1987). The Tariff Proposals I have just tabled relate to proposed alterations to the Excise Tariff Act 1921 and the Customs Tariff Act 1982. Excise Tariff Proposals Nos 11 and 12 (1987) and Customs Tariff Proposals No. 18 (1987) formally place before Parliament, as required by law, tariff alterations made by notices published in the Commonwealth of Australia Gazette during the recent recesses. Excise Tariff Proposals No. 11 (1987), operative on and from 1 October 1987, increase the excise duty on naturally occurring liquefied petroleum gas from $5.02 to $13.21 per kilolitre. This change was announced by the Minister for Primary Industries and Energy (Mr Kerin) on 29 September 1987. Excise Tariff Proposals No. 12 (1987), operative on and from 17 October 1987, provide for altered rates of excise duty on certain refined petroleum products resulting from the Government's decisions on the pricing of indigenous crude oil and related issues. Customs Tariff Proposal No. 18 (1987), also operative on and from 17 October 1987, provide for corresponding alterations to rates of customs duty. Rates of diesel fuel rebates for eligible uses have also been altered in conjunction with these changes. Summaries of alterations contained in these proposals have been prepared and are being circulated for the information of honourable members. I commend the proposals to the House. Debate (on motion by Mr White) adjourned. Bill presented by Mr Kerin, and read a first time. Mr KERIN(Werriwa-Minister for Primary Industries and Energy)(3.54) —I move: That the Bill be now read a second time. The Petroleum Resource Rent Tax Assessment Bill is the first in a package of four Bills that will give effect to the Government's decision to introduce a petroleum resource rent tax on profits from certain off-shore petroleum projects. The proposed tax regime was announced in detail in June 1984, after extensive consultation with the industry and the States. These Bills are now being reintroduced in the same form in which they were before the Senate when Parliament was dissolved for the election and the Bills consequently lapsed. Petroleum resources are, in their most basic sense, community property and the Government believes that the community as a whole should share in the potentially high returns from the exploitation of these scarce, non-renewable resources. At the same time it is recognised that participants in petroleum projects who do not earn high profits in relation to the amount invested and the risk involved, particularly when oil prices decline, should be able to operate secure in the knowledge that excise and royalties which are based on production will not apply. The Government believes that a resource rent tax related to achieved profits is a more efficient and equitable secondary taxation regime than the excise and royalty system that it is to replace. I emphasise that the proposed tax replaces the existing system-it is not in addition to it. In contrast to production-based secondary tax regimes, the petroleum resource rent tax will be payable only in respect of projects earning a high rate of return on outlays. Particularly in light of the current volatility of world oil prices, the resource rent tax system thus offers considerable benefits to the petroleum industry. It strikes a reasonable balance between the objectives of satisfying the right of the community as a whole to share in the benefits of profitable offshore petroleum projects, and of providing the participants with adequate returns for the risks they accept in undertaking offshore exploration and development activities. The Bill incorporates amendments made after Government consideration of representations made by the petroleum industry. The provisions of the Bill, nevertheless, follow closely the proposal as announced in June 1984, while accommodating the retention lease system in relation to offshore petroleum exploration. I now turn to outline the more significant features of the tax. General Application The tax is to apply to a person's taxable profits from the recovery of petroleum in off-shore areas where the Commonwealth's Petroleum (Submerged Lands) Act 1967 applies, other than in areas covered by production licences granted on or before 1 July 1984 and the permit areas from which those production licences were drawn. The tax will therefore not apply to the North West Shelf permit areas or Esso Australia Ltd's and the Broken Hill Proprietary Co. Ltd's Bass Strait permit area. Excise and royalty arrangements will continue to apply in those areas. As the petroleum resource rent tax is profit-based, rather than production-based, it will apply only where there is an excess of project-related receipts for a financial year over both project-related expenditure for the year and undeducted expenditure of previous years brought forward at a compound rate. This compounding of expenditure ensures that the investment represented by the expenditure obtains an appropriate rate of return free of secondary tax. The rate of compounding for expenditure that remains undeducted at the end of a financial year will be determined according to when it was expended. Expenditure-generally exploration expenditure-more than five years before the coming into force of the first production licence in a permit area will attract compounding at a rate equal to the gross domestic product deflator rate, currently around 8 per cent. More recent expenditure in respect of the project will be carried forward at a rate equal to the prevailing long term bond rate increased by 15 percentage points. Currently this produces a rate of about 28 per cent. In broad terms, a petroleum project incorporates the production licence area, and such treatment and other facilities and operations outside that area as are integral to the production and initial on-site storage of marketable petroleum commodities such as stabilised crude oil, condensate and liquefied petroleum gas. As a practical matter, two or more projects will be treated as a single project for tax purposes where the Minister for Primary Industries and Energy, having regard to relevant factors, considers that they should be so treated and issues a certificate to that effect. The boundaries of a petroleum project will not extend beyond the point at which a marketable petroleum commodity is initially stored after production-that is, the project boundaries will not extend to `downstream activities' such as refineries and facilities for the transport of marketable products from initial storage. Assessable Receipts Liability for petroleum resource rent tax is to be assessed on the accruals basis that generally applies in determining income tax liability. Assessable receipts from the project will, therefore, be taken into account in the financial year in which they are receivable. Assessable project receipts will include amounts receivable from the sale of petroleum or of a marketable petroleum commodity. In the event that a marketable petroleum commodity is not sold after the point of initial on-site storage, the market value-or a fair and reasonable value-of the commodity will be treated as an assessable receipt of the project. The need to attribute a value could arise, for example, in the case of an integrated producer which both extracts crude oil and refines it. Deductible Expenditure Expenditure of either a capital or a revenue nature which is directly related to a petroleum project will be deductible in the year in which it is incurred against any assessable receipts for the year. Any excess of deductible expenditure, other than closing-down expenditure, over assessable receipts at the end of a year, will be compounded forward for deduction against receipts in future years. Deductible expenditure comprises exploration expenditure, general project expenditure and closing-down expenditure, subject to the exclusion of certain specific items of expenditure. Exploration expenditure consists, broadly, of expenditure-other than excluded expenditure-in an exploration permit area that is directly related to exploration for petroleum and will include expenditure on the recovery of petroleum and the production of a marketable commodity prior to the coming into force of a production licence. Exploration expenditure includes related expenditure on storage and processing facilities and on employee amenities. Exploration expenditure will be deductible against assessable receipts of any project established within the exploration permit area. Where there are two or more projects in a permit area, exploration expenditure deductible in a particular year is to be off set against the project that relates to the production licence which first came into force, then against subsequent projects producing assessable receipts in that year. Special rules apply where a production licence from one permit area is combined with a production licence from another permit area to form a single project. I mentioned earlier that the provisions of this Bill take into account the retention lease system introduced in 1985. Retention leases are of considerable benefit to the industry. They allow title to be held over a promising discovery for a number of years without insisting on any major ongoing exploration or development program in the area. To prevent potentially significant revenue losses arising from compounding of deductible amounts, exploration expenditure related to a retention lease area will be able to be offset only against projects in that area. Exploration expenditure in the rest of the permit area will not be deductible against a retention lease project. That expenditure, if incurred more than five years before the coming into force of a production licence in the retention lease area, will attract compounding at the gross domestic product deflator rate. General project expenditure comprises expenditure in a production licence area, or combined production licence areas, on the establishment of a project, on recovering and producing a marketable petroleum commodity and on storing that commodity adjacent to the production site. It includes relevant expenditure on storage and processing facilities and employee amenities. Closing-down expenditure is made up of expenditure in closing down a petroleum project and specifically includes expenditure on environmental restoration of a project site. If, at the end of a project's life, there are insufficient assessable receipts for a year against which to offset closing-down expenditure for the year, a tax credit of 40 per cent of the excess expenditure is provided. Of course, closing-down credits in respect of a project will not be permitted to exceed the petroleum resource rent tax previously paid in respect of the project. Certain expenditure is specifically excluded from petroleum resource rent tax deductibility. Examples are interest payments and payments made under a cash bidding system. As petroleum resource rent tax is to be a deductible expense for income tax purposes, income tax payments are not to be deductible for resource rent tax purposes. Fringe benefits tax payments are also excluded. Instalments The practical operation of the Bill will require the payment of petroleum resource rent tax by instalments in any year in which a person's assessable receipts from a project exceed the deductible expenditure, including any compounded expenditure of previous years. Three instalments of tax will be payable, determined on the basis of assessable receipts and deductible expenditure in the instalment period and an appropriate proportion of compounded expenditure from previous years. The liability for tax assessed at the year's end will be reduced by earlier paid instalments for the year. The Bill also contains the usual machinery provisions of a tax law-dealing with such things as collection and recovery procedures-and provides objection and appeal rights for taxpayers dissatisfied with decisions under the proposed petroleum resource rent tax regime. Full details of the provisions of the Bill are contained in the explanatory memorandum that has been circulated to honourable members. The Bill in its present form deals with projects that might straddle both a petroleum resource rent tax area and an area under Commonwealth or State jurisdiction and subject to excise and/or royalties. It does this by apportioning a quantity of petroleum from a project to be subject to petroleum resource rent tax. This issue raises a number of complex questions-some requiring resolution in Commonwealth-State discussions. Nevertheless, it is the Government's intention that, for reasons of both administration and industry certainty, the petroleum resource rent tax should apply to the total project where it extends beyond the resource rent tax area. The Government intends to initiate discussions with the States on the question of treatment of projects which straddle resource rent tax areas and State excise/royalty areas. Once these questions have been resolved, any necessary amendments will be introduced. On the basis of current world oil prices, it is unlikely that any petroleum resource rent tax revenue will be received before the 1988-89 financial year. Due to the continuing fluctuations in world oil prices and the uncertainties inherent in predicting success in off-shore petroleum exploration and subsequent production, the amount of revenue likely to be obtained in any year cannot be projected. I present the explanatory memorandum and commend the Bill to the House. Debate (on motion by Mr Smith) adjourned. Bill presented by Mr Kerin, and read a first time. Mr KERIN(Werriwa-Minister for Primary Industries and Energy)(4.07) —I move: That the Bill be now read a second time. The assessment Bill I have just introduced provides the legislative framework for determining the off-shore petroleum projects to be subject to petroleum resource rent tax, and the taxable profit of a participant in such a project. This Bill now before the House will formally impose and declare the rate of that tax as 40 per cent. The explanatory memorandum circulated to honourable members also explains the provisions of this Bill. I commend the Bill to the House. Debate (on motion by Mr Smith) adjourned. Bill presented by Mr Kerin, and read a first time. Mr KERIN(Werriwa-Minister for Primary Industries and Energy)(4.08) —I move: That the Bill be now read a second time. This Bill will formally impose the interest charge payable under section 65 of the proposed Petroleum Resource Rent Tax Assessment Act 1987, the Bill for which I have just introduced. Honourable members will be aware that under section 55 of the Australian Constitution laws imposing taxation may deal only with the imposition of taxation and may not contain any extraneous matters. Because interest payable under section 65 of the Assessment Act might technically be regarded as a tax, this Bill is designed to ensure that constitutional requirements are met. Its provisions are also explained in the memorandum that has been circulated. I commend the Bill to the House. Debate (on motion by Mr Smith) adjourned. Bill presented by Mr Kerin, and read a first time. Mr KERIN(Werriwa-Minister for Primary Industries and Energy)(4.10) —I move: That the Bill now be read a second time. The new profit based taxing regime for off-shore petroleum projects is, in respect of those projects, to replace the existing production based excise and royalty arrangements. This Bill will amend the Excise Tariff Act 1921 and the Petroleum (Submerged Lands) (Royalty) Act 1967 to effect that replacement. The Bill will also amend the Income Tax Assessment Act 1936 to provide income tax deductibility for petroleum resource rent tax paid other than by way of instalments. Conversely, refunds and certain credits of petroleum resource rent tax are to be made subject to income tax. Decisions under the Petroleum (Submerged Lands) Act 1967 will assume greater importance for the Commonwealth with the introduction of a petroleum resource rent tax. That Act is therefore being amended by this Bill to provide for decisions relating to the development of petroleum pools straddling production licence areas, including pools which straddle the outer boundary of the territorial sea, to be taken jointly by the Minister for Primary Industries and Energy and the relevant State or Northern Territory Minister. The scope of the Crimes (Taxation Offences) Act 1980 is also being extended by the Bill, so that offences against that Act will cover schemes for the fraudulent evasion of petroleum resource rent tax in the same way as they deal with other taxes of the Commonwealth. Details of this Bill are also set out in the explanatory memorandum that has been circulated. I commend the Bill to the House. Debate (on motion by Mr Smith) adjourned. Bill presented by Dr Blewett, and read a first time. Dr BLEWETT(Bonython-Minister for Community Services and Health)(4.12) —I move: That the Bill be now read a second time. The Hawke Labor Government was elected in 1983 with a firm commitment to the availability of adequate and affordable housing for all Australians. In 1984 we introduced the new Housing Assistance Bill which honoured our commitment to revamp public housing policy and assistance in Australia. This was an important piece of social legislation. Affordable and secure housing is essential for the well-being of all Australians. The 1984 Commonwealth-State Housing Agreement, authorised by the Housing Assistance Act, was negotiated by Federal and State governments in 1983-84 to operate for 10 years from 1 July 1984. It included a number of initiatives, one of which was that the Agreement be evaluated triennially. At the Housing Ministers Conference in April 1986 Federal and State housing Ministers agreed to a timetable and a procedure for the first triennial evaluation of the agreement. At that meeting Ministers agreed that a steering committee of Commonwealth and State officials would be established to oversee the evaluation in accordance with the agreed terms of reference. The terms of reference stated that the first triennial evaluation would examine the effectiveness and efficiency of rental and home purchase assistance programs, against the principles set out in the agreement. Ministers also agreed that non-government organisations be invited to provide submissions on the operation of the agreement. The triennial evaluation concluded that public housing programs under the Commonwealth-State Housing Agreement are generally efficient, effective and well targeted. The evaluation also concluded that the objectives and principles introduced in the 1984 agreement remain valid, but that in particular areas of the provision of home purchase and rental assistance, minor amendments could further improve effectiveness and efficiency. Two changes are to be made to the Housing Assistance Act through this Bill. The first is to provide for the continuation of the Government's commitment to provide a guarantee of a high level of base funding for the next triennium. Funding to the States and the Northern Territory for housing will be guaranteed at a base level of $700m for 1988-89 and 1989-90. This is $200m more than the record base funding provided in the first triennium and 3 1/2 times the base level provided for in the previous Government's 1981 agreement. The current year's funding is to be made available through Appropriation Act (No. 2) 1987-88. The financial impact of this Bill is therefore a cost to the Commonwealth of $700m in 1988-89 and 1989-90. As part of the $700m guaranteed for 1988-89 and 1989-90 the local government and community housing program will receive $11m and the crisis accommodation program will receive $14m. The Government will also allow all States to nominate up to 100 per cent of the loan component of their State government borrowing programs for public housing in 1987-88. These funds are available at the highly concessional interest rate of 4.5 per cent, repayable over 53 years. This funding, which is provided in a year of very considerable Budget restraint, reflects the high priority accorded by the Federal Government to the alleviation of housing related poverty. The second change to the Housing Assistance Act arising out of the evaluation of the agreement relates to section 11 of that Act which deals with the Minister's authority to reallocate specific housing assistance grants from one State to another. This section is to be amended to allow the Federal Minister responsible for administering the agreement to redirect funds to other States or for the funds to be retained by the Commonwealth. This could occur in the event of a State failing to comply with the provisions of the agreement relating to specific purpose programs or the guidelines for those programs. This change is being introduced to ensure that States adhere to the agreed procedures for consultation in respect of Aboriginal housing and other special purpose programs and that in these programs, which are fully funded by the Federal Government, Federal priorities are implemented. Following the outcome of the triennial evaluation, amendments were also made to the Commonwealth-State Housing Agreement, and I propose to outline briefly these changes for the information of honourable members. I table the amended agreement. The amendments in this agreement have been negotiated and agreed with the State and Northern Territory housing Ministers. The agreement has been tightened up in the area of State matching contributions to ensure that States meet their financial responsibilities for public housing. The agreement will also be amended to ensure that all State matching contributions for home purchase assistance, and Loan Council nominated funds used for home purchase assistance, will be channelled through the home purchase assistance account. This will ensure that all funds provided to the States under the Commonwealth-State Housing Agreement and Loan Council arrangements continue to be used for the purposes of the agreement. The agreement will permit surpluses generated from home purchase assistance operations to be used for general rental assistance. It will also specify that not less than 50 per cent of total funds are to be directed to public rental assistance in recognition of the need to increase the supply of affordable rental housing. The approved use of funds will also be widened. This amendment will permit funds provided under the agreement to be used for more innovative purposes such as joint ventures, secondary mortgage market trusts and rental housing trusts. This move will encourage States to enter into innovative financial arrangements and attract private sector finance into public housing provision. Home purchase assistance provisions will also be amended to require that reviews of income of recipients be conducted annually or at intervals agreed to by the Minister. This will ensure that subsidies are not provided to those who are not in need and will maximise the amount of funds available for further loans. If income is not reviewed annually, loan repayments are to be adjusted annually in accordance with the consumer price index or other agreed index. The sales policy for public rental housing will be refined to ensure that rental stock is not depleted and that sales will cover the costs of providing replacement dwellings. This policy will provide that public rental housing constructed or purchased within the previous five years cannot be sold to an individual purchaser at less than replacement cost. This Government will also ensure that young single people are not excluded by a particular State from access to public housing. These changes to public housing arrangements will ensure that the 1984 Commonwealth-State Housing Agreement remains effective in assisting many thousands of Australian households each year to obtain adequate housing at a price they can afford. In addition to our public housing efforts, this Government has made significant achievement in other areas of housing assistance. The first home owners scheme has been widely heralded as the most effective scheme ever to assist home buyers obtain their first home. The eligibility limits were increased in March this year, with extra assistance going to families. Since its inception, this scheme has helped over 255,000 first home buyers into their own home. It continues to be the most effective home purchase assistance program ever introduced by a Federal government. This Government has not ignored the private rental market. The recent decision on negative gearing will flow through into increased rental supply and put a brake on rent increases. We will also provide direct assistance through the new family allowance package. Low income families renting privately who are receiving the family allowance supplement, parents on unemployment benefit and pensioners will now receive up to $15 a week rent assistance. It is the first time that any Federal government has provided rent assistance to working families on low incomes. This is a significant breakthrough. This Government's sound economic policies will continue to place downward pressure on home loan interest rates. The Budget has been followed by an immediate drop in housing loan interest rates. Rates have now come down by a full percentage point over the last three months. Another initiative co-ordinated by the Federal Government was that from 1 July 1987 the funding arrangements for public housing in the Australian Capital Territory would be aligned with the States and the Northern Territory under the Commonwealth-State Housing Agreement. This decision is welcomed because it will ensure consistency and equity of treatment between residents in the Australian Capital Territory and those living elsewhere in Australia. The Government recognises that the massive housing problems facing low income earners cannot be overcome in one or two years. This is why the agreement is placed in a 10-year framework. We have entered into a long term commitment to those in housing need. The improvements made to the arrangements following the first evaluation will enhance significantly the effectiveness of the Commonwealth-State Housing Agreement over the remaining seven years. I commend the Bill to the House and I present the explanatory memorandum to the Bill. Debate (on motion by Mr Porter) adjourned. Mr WEST(Cunningham-Minister for Administrative Services)(4.22) —I move: That in accordance with the provisions of the Public Works Committee Act 1969, and by reason of the urgent nature of the work, it is expedient that the following proposed work be carried out without having been referred to the Parliamentary Standing Committee on Public Works: Upgrade of the Jindalee facilities at Alice Springs. The proposed work, I believe, is an essential element of the project to develop a network of over-the-horizon radars. The upgrade of the existing Jindalee facilities is to enable the experimental radar to be used as a test-bed for scientific, engineering and operational development. From this test-bed a network of radars will be developed to provide a basic element of a national system for air defence and air space control. The network of radars will provide this country with broad area surveillance of our sea and air approaches and will provide long range detection of aircraft and surface ships. The Jindalee radar facilities are dispersed at remote locations within the Northern Territory. The transmitter site is some 160 kilometres north-east of Alice Springs in the Harts Range area. The receiver site is in the Mount Everard area, 45 kilometres north-west of Alice Springs. A beacon located at HMAS Coonawarra in Darwin provides the reference information for the radar system. For the benefit of those honourable members who were not present when the House first considered this proposal, I will now outline details of the proposed works. At the Mount Everard receiver site there will be alterations to the receiver building to accommodate additional personnel and equipment, a new administration and amenities complex, a new general engineering workshop, a new guard house, carports for defence vehicles, a new electronic security surveillance system, a new power supply, an upgrading of existing engineering services including roads, security fencing, water, drainage, fire and electrical systems, and provision of landscaping. At the Harts Range transmitter site there will be alterations to the transmitter control building, a new workshop and store, five new 4-bedroom houses, a refurbishment of two transportable houses for transient personnel, two new transportables for kitchen and dining facilities, civil works for an antenna extension, upgrading of engineering services and the provision of landscaping. In Alice Springs there will be provision for seven 3-bedroom and two 4-bedroom houses, and provision of four 2-bedroom townhouses. At the Darwin beacon site there will be an upgrade of the power supply and structural modifications to improve cyclone resistance. The estimated cost of the upgrading works is $8.2m at April 1987 prices. It is now necessary to proceed urgently with the works. Examination by the Joint Committee on Public Works is, therefore, not recommended for two major reasons: firstly, the time it would now take the Committee to report. I state, by way of explanation of this point, that, on 2 April 1987, the House resolved to refer the proposal to the Committee for examination. The hearing was scheduled for 20-22 July, but the reference lapsed with the dissolution of the Parliament on 5 June. The normal procedure for a reference that has lapsed is to refer it again to the new Committee upon the resumption of Parliament. When previously referred it was anticipated the Committee would table its report in August 1987, and, subject to favourable recommendations, contracts would be called when the expediency motion was passed, with construction commencing in October 1987, the facilities upgrade being completed by October 1988 and the new housing being completed by mid-1989. With the lapsing of the reference the program has already slipped. If the proposal were to be now referred to the Committee it would be unlikely a report would be tabled until late December and tenders would not be invited until February 1988, with construction commencing in April 1988. The potential delay of six months would delay the availability of the upgraded facilities and consequently the introduction of the over-the-horizon radar network capability. The second reason for the urgency of these works is that from 1 January 1987 the Department of Defence has been arranging contracts for equipment upgrade and systems acquisition packages to redevelop the radar. Some 300 packages are programmed for implementation in a four-year period ending in 1990. The bulk of these tasks have already been contracted at a cost of over $22m. The programming of these tasks was based on the facilities upgrade being completed at the transmitter site by the end of August 1988 and at the receiver site by October 1988. Delays to the construction timetable will delay these contracts. The penalty cost to the Commonwealth of extending these contracts has been estimated at some $330,000 for each month's delay. If the House supports this motion my Department intends immediately to call tenders so that construction can commence as soon as possible. The facilities upgrade should be completed in 12 months time with the housing completed in 1989. Design of this project was undertaken by my Department with some contract support. Construction will be contracted to private enterprise. After considering those explanations I trust that the House will agree that there is urgency with this proposal. I am convinced of those facts, so I commend to the House this motion that it is expedient to carry out the work. Mr HOLLIS(Throsby)(4.29) —As Chairman of the Joint Committee on Public Works I wish to refer to the exemption of the Jindalee project. It is regrettable that the referral to the Committee lapsed with the dissolution of Parliament in June. The Department of Defence has now advised that deferral of commencement of the work from October 1987 to April 1988 would result in a cost of $330,000 per month, and the Committee agrees that this would result in sev- ere financial penalties for the Commonwealth. However, the Committee is extremely concerned that the Department of Defence entered into contracts for equipment and systems long before a public hearing was scheduled under the original referral. At that time Defence could not have known whether the Public Works Committee would recommend that the project proceed. If the Public Works Committee is to fulfil its role of scrutinising public works then its decisions should not be pre-empted in this manner. On behalf of the Committee I would like the Government to note its concern in this matter. Mr WHITE(McPherson)(4.31) —Again we have a proposal before the House which seeks to short-circuit the established system, as the honourable member for Throsby (Mr Hollis) has rightly pointed out, giving a bit of a shaft to his own side. Again a motion has come before this House which seeks urgency status for a major piece of defence equipment. We will not oppose this motion today. But at the same time I must state plainly that I do not think the Minister for Administrative Services (Mr West) ever had any intention of referring this matter to the Joint Standing Committee on Public Works. He kept blaming the election which the Government itself called, and which is a stupid excuse anyway. He also blamed many other things. I have some sympathy with the view that perhaps some of these highly complicated and complex projects should go somewhere else. But, for God's sake, the Minister should stop coming in here and blaming everything else, such as elections and running out of time and all the rest of it. If the Government wants to change the system it should change the system and stop coming in here making excuses every time. The Government is going around the Public Works Committee. If there is a reason to change the system the Government should do it. The reason we will not oppose this motion is that we believe that the Jindalee project has enormous potential to enhance the security of this country. The reason we place such great importance on that project is that some of the other agencies that are supposed to be responsible for the security of this country are falling apart. I am very pleased to see the Minister for Defence Science and Personnel (Mrs Kelly) in the chamber because if there is one thing that is falling apart at the moment it is the defence forces of this country. Without putting too fine a point on it, the Royal Australian Air Force (RAAF) is just about knackered. There is an enormous shortage of pilots. They are leaving day by day. Our operational squadrons are almost grounded because of lack of pilots and other personnel. Two hundred and fifty pilots left in the last two years. The RAAF has managed to supply only 150 through its normal training procedure. So we have been 100 short for the last two years. So we agree that it is a matter of urgency to get a decent surveillance system in the north of this country. We have recently had the spectacle of the Amann Aviation Pty Ltd contract. Mr DEPUTY SPEAKER(Mr Blanchard) —Order! I remind the honourable member to keep closely to the motion before the House. Mr WHITE —Mr Deputy Speaker, I will not be very lengthy but I put it to you that it is a very serious matter. Amann is part of our Coast- watch service. Coastwatch is part of our northern surveillance system. Jindalee has been designed to be a major contributor-and this is gradually coming into effect; it was started in 1984-to the northern surveillance and security of this country. I think it is entirely legitimate to give passing reference to the fiasco of the Amann contract when talking about the northern surveillance of this country. Mr DEPUTY SPEAKER —The honourable member has given passing reference. Mr WHITE —Having made reference to the fiasco of the Amann contract which has so recently been debated, let me also talk about the control and co-ordination of our northern surveillance because Jindalee, when it comes on stream, as it will in the next few years, is an essential part of that surveillance. What I am saying to the Government is this: Are we going to allow the northern surveillance and security of this country to remain under the haphazard control which is presently exercised over it? That is a fundamental problem. Will the Government continue to allow the Department of Transport and Communications to be involved? Will the Government leave the matter in the hands of the Australian Federal Police, which is so damned busy that it does not have time properly to devote any energies to this function? The Australian Federal Police does not have the equipment and I suspect that many of its officers do not have the interest or the experience to run and co-ordinate such a project. Or will the Government initiate a study so that the northern surveillance problems of this country can be put in the hands of a professional force, the sort of force that one would look to to do the job both in times of war or emergency as well as in peace? If an organisation is going to do the job in wartime it should also do it in peacetime. I suggest to the Minister for Defence (Mr Beazley) that he initiate an immediate study into how Jindalee will be incorporated into our northern surveillance in respect of the other agencies, whether we are talking about Amann, Coastwatch, Navy, Army or Air Force patrols, merchant shipping, graziers, health, immigration and the Australian Customs Service. We cannot leave this surveillance in the unholy mess that it is in now. That is why we will support this proposal-to get Jindalee up and running as soon as possible so that we get an added dimension of security into our northern surveillance. One of the problems with Jindalee is that it will not be the be-all and end-all of northern surveillance. It is still an unproven system. It is showing signs of great effectiveness; it still has a long way to go. But it can only be really effective if it is co-ordinated with airborne early warning radar. That seems to be acknowledged by anyone who has had anything to do with our northern surveillance, including the Government. I find it interesting that in 1985 the Minister talked about the acquisition of these other agencies which would be called upon to assist the Jindalee system. I ask the Minister: Where at the moment are the proposals that were asked for in December 1985 to assist and supplement the Jindalee over-the-horizon radar? The fact is that Jindalee is a very generalised security system. It can tell us in which general area a ship or aircraft might be. It cannot tell us the altitude of an aircraft, for a start, and it can only tell us that something is there if it is moving. So if a submarine, for example, were stationary on the surface the Jindalee would not be able to tell us that it was there. Jindalee has developed an extraordinary capacity and has confounded some of the cynics. Exercise Pitch Black held recently in the Darwin area surprised many people by showing that Jindalee had come a long way. But we come back to this fundamental point: Are we still going to have as part of our surveillance screen in northern Australia this unco-ordinated mass of agencies that we have now? We have Amann, Army patrols, Navy patrols and the Federal Police, and the Jindalee project will be coming in. Who in the end will control and co-ordinate these things? It is no good having a system such as Jindalee-which shows potential which can be developed and which will be a valuable agency in the surveillance of the northern approaches to Australia-if it is not properly controlled and co-ordinated. I would hate to think that we will have this valuable piece of equipment, which has the potential to do such a lot of work and provide a lot of security for us in northern Australia, only to let it go by default, because if there are two things that require extra attention at the moment they are the northern surveillance problem and the state of our armed forces, as I have no doubt the Minister is very much aware. Mr PORTER(Barker)(4.40) —I wish, firstly, to support my colleague the honourable member for McPherson (Mr White), and, secondly, to express the fact that we have some sympathy with the concerns raised by the Chairman of the Joint Committee on Public Works. I say to the Minister at the table, the Minister for Administrative Services (Mr West), that the Opposition's concern, and clearly the concern of the Public Works Committee (PWC) as expressed by its Chairman today, is that declaring works urgent is becoming a bit of a habit. On 24 September the Minister sought a similar declaration of urgency in relation to the construction of survey motor launches for the Royal Australian Navy. On that occasion he said: The acquisition of the survey motor launches has been deferred for some years due to financial constraints. In other words, he said that the plan had been on the drawing board for some time. His next sentence was: However, their acquisition is now urgent to enable the surveying of coastal waters, particularly around northern Australia. The Minister did not explain why it was suddenly urgent. I understand the plan had been on the drawing board for three years. His Government had not considered it to be of a sufficiently high priority to allocate funds to it for three years. But suddenly, when the money became available, the Minister came in here and sought a declaration of urgency. In a way, it was similar to the Jindalee case. He had already sought tenders for the construction of the vessels. Those tenders closed in October 1986, and in September 1987 the Minister told us, `Look, the tenders have closed and we understand that the validity of those tenders is about to expire'. So he had to award the tender by the end of September or early this month. So, as the honourable member for McPherson said, we do not believe that the Minister had any intention of submitting that proposal to the Public Works Committee. He put it out to tender without submitting it to the Public Works Committee, although he could have done so during the six months before the last election. In this case, as the Chairman of the Public Works Committee has said, he put out to tender contracts for part of the Jindalee system before submiting to the Public Works Committee the other half of the project-that is, the building of the facilities in which this Australian Defence Force equipment is to be installed. So again the evidence is that the Minister really had no intention of ever submitting this matter to the Committee once the election was called. He said that it did not matter, that he would just have the works declared urgent. If that is the way he wants to proceed, he ought to explain to the House what the new procedures are. The excuses for declarations of urgency are pretty flimsy. I think the Jindalee case has more substance to it than the previous case. The case for declaring the coastal survey vessels work urgent had no substance to it other than that the Minister had sought tenders, the tenders had closed and if a tender was not awarded, the process would have had to start again and there could have been cost penalties imposed. As has been stated by my colleague, the Opposition clearly supports the upgrading of the Jindalee facilities because the system is a valuable adjunct to the nation's surveillance and intelligence facilities. The purpose of this project, according to the Minister, is the further development of a network of over-the-horizon radars which will provide a broad area of surveillance of our sea and air approaches, and will provide long range detection of aircraft and surface ships. We are aware that the new system has the potential to improve dramatically our surveillance capacity. The Opposition has on many occasions raised its concern about the current state of our northern coastal surveillance-or should I say lack of surveillance. Certainly the grossly incompetent way the Government has handled the letting of tenders by the Department of Transport and Communications for the aerial surveillance of our northern coast, resulting in the Amann Aviation Pty Ltd fiasco, has raised our concern not only about the Government's administrative competence, or incompetence, but also about the extent and standard of surveillance currently being undertaken. This matter remains a vital issue for Australia for defence purposes, for the control of illegal imports, for the control of illegal immigration and, of course, for the control of the illegal importation of drugs. In addition, we want to maintain an adequate surveillance system to ensure that we exclude from this country exotic diseases which we do not now have. We therefore appreciate the concern of the Government that the initial reference to the Public Works Committee has been interrupted by the election and that a reference to the Committee now would delay the availability of this much-needed work, and it is also claimed that a delay would result in penalty costs of around $330,000 for each month. Nevertheless, we do raise some concerns and we think they are the sorts of concerns that would have been considered by the Public Works Committee had it been given the opportunity. Perhaps at the conclusion of this debate the Minister will be able to allay the concerns we have. Following the Amann fiasco, it is clear that the Government is making a ham-fisted attempt to continue with surveillance under the auspices of the Australian Federal Police. If that is so, how will that surveillance be co-ordinated with this new Defence Force facility, which, as I have said, will provide the country with broad area surveillance of our sea and air approaches and will provide long range detection of aircraft and surface ships? In order to ensure that we have the most effective and efficient coastal surveillance, we need to make sure that in the event of the overlapping of the roles of each organisation involved-that is, the Department of Transport and Communications under the auspices of the Australian Federal Police, and those involved in this new Defence Force project-there is no duplication, and we need to make sure that the information obtained is actioned by the appropriate authority, be it the Department of Defence, the Federal Police, the Australian Customs Service, or the Department of Community Services and Health and so on. We would welcome the Minister's response, or indeed the response of the Acting Minister for Defence and Minister for Defence Science and Personnel (Mrs Kelly), to that concern which, as I say, the PWC would have looked into had it been given a chance. Finally, I reiterate that we support the upgrading of our nation's surveillance and intelligence facilities, and whilst we agree with the concern expressed by the Chairman of the PWC in the circumstances of this case, we will not stand in the way of a declaration of urgency and we welcome the fact that the work will be contracted to the private sector. Mrs KELLY(Canberra-Minister for Defence Science and Personnel and Acting Minister for Defence)(4.49) —The Government appreciates the fact that the Opposition does not oppose this declaration of urgency, and understands the circumstances involved. I give the Opposition a guarantee from the Government that it was not trying to get around the processes of the Joint Standing Committee on Public Works. Having just been a backbencher and having been involved in the work of parliamentary committees, I can assure the honourable member for Barker (Mr Porter) that I would never attempt to get around the work of committees such as the Public Works Committee. This matter was referred to the Public Works Committee on 2 April and it was just a factor of the election. We are not trying to blame anyone. It is a fact that this matter was referred to the Committee on 2 April. The Committee did not have time to consider it and I apologise to the Chairman of the Committee for there not being sufficient time to enable the Committee to examine it. But I understand that, as a courtesy, my Department will be briefing the Public Works Committee in the morning and will go through the project in some detail. I also appreciate the support from the Opposition given to the Jindalee over-the-horizon radar system project. It is one of the most exciting systems I am involved in in the defence science and technology area of my portfolio. The work that has been done in this area by the Defence Science and Technology Organisation (DSTO) is world class and it is to be congratulated. I often think of the DSTO as the secret weapon in our defence bureaucracy because so much of the work that is being done in our laboratory is world class and deserves a lot of praise. Foremost is the over-the-horizon radar system. This radar system will be an integral part of northern surveillance. I take the point that has been raised by speakers for the Opposition about the need to integrate our defence role with the work of the Australian Customs Service and the police. This work will obviously have a primary role in the defence and intelligence area. At the moment discussions are proceeding about ways that Jindalee can help in civilian areas, the Customs area and the police area. It is a very exciting project and honourable members should be aware of the way it will operate. Currently we are attempting to develop a network of radars. As I have said, they are absolutely first class. The basic network of radars around the top of Australia will be the essential element in the national system of air defence and airspace control. Primarily, Jindalee will be established for intelligence and surveillance but discussions are under way on how it can assist in civilian areas. Before I conclude, I want to take up one point that was made by my colleague the Chairman of the Committee. Why was a contract let prior to the work being examined by the Committee? Basically these works are only a very small element of the overall upgraded facility; they will cost only $8.2m out of $57.5m. It was necessary to renew an existing major maintenance contract which expired at the end of 1986. This contract, along with others involving software which had very long gestation periods, was let to enable the project to become fully operational by 1990. I appreciate the support and the comments from the Opposition. I think we can look forward to a very exciting project, one of which Australia, and particularly my organisation, the DSTO, can be very proud. Question resolved in the affirmative. Mr DEPUTY SPEAKER(Mr Blanchard) —Madam Speaker has received a message from the Senate acquainting the House of the appointment of the following senators to the Joint Standing Committee on Electoral Matters: Senators Beahan, Coulter, Harradine, Schacht and Short. I also inform the House of the following nomination of honourable members to be members of the Joint Standing Committee on Electoral Matters: Mr Lee, Ms Jakobsen and Mr Punch have been nominated by the Government Whip; Mr Shack has been nominated by the Opposition Whip; and Mr Blunt has been nominated by the National Party of Australia Whip. Debate resumed. Mr GOODLUCK(Franklin)(4.55) —Before the debate was interrupted, I was talking about petrol prices. It was said to me during the interval that I had underestimated the price of petrol in Canberra. The Minister for Defence Science and Personnel, the honourable member for Canberra (Mrs Kelly), is again in the chamber; I am sorry that she is always present when I speak on this subject. I have been told that the petrol price in Canberra is about the same as it normally is in Tasmania. I repeat that in Tasmania at the moment there is a petrol price war so the price is down to about 52c a litre in Hobart. I usually get the daily paper-the Hobart Mercury-which I read from cover to cover to find out all the news and to keep in tune with what is happening in Franklin, Tasmania. Mrs Kelly —How long does that take you to read, two minutes? Mr GOODLUCK —It does not take me long. To read the Canberra Times would take less time. The Hobart Mercury, which is a very good paper, had the headline `Petrusma cautious on petrol price war'. Mr Petrusma is a member of the Legislative Council-I never run other politicians down unless they are present when I speak-and is quite a decent fellow. There was an inquiry into the price of petrol in Tasmania and it went over the same old thing again. Canberra also has such an inquiry at the moment which I imagine was initiated by the honourable member for Canberra. The poor old Canberra people will be told why the price of petrol in Canberra is a lot dearer than it is in Sydney and that it is much dearer than in Melbourne. It is the same old thing and it goes on and on. The article in the Mercury stated: While Hobart motorists are cashing in on the benefits of the petrol price war, they will be no better off than when it started once the dust settles, it was claimed yesterday. That is exactly what I said last night. There will be a price war for a little while and then all of a sudden prices will settle down, the poor dealers will lose a few dollars and the poor motorists, with their raised hopes of getting something cheap, will have them dashed again. The article continued: Mr Hank Petrusma (MLC, Hobart) raised the issue of petrol prices as a matter of urgency in the Legislative Council, saying that the chaotic situation which had developed recently had destabilised the whole retail petrol industry questioning its continued viability. Criticising the higher wholesale petrol prices Tasmania has to pay . . . Mr Petrusma should know. I made the point this morning that the Prices Surveillance Authority fixes a maximum wholesale price for petrol in every capital city, including Canberra and Hobart, and the figure does not vary very much. Actually, it is about the same; it is about 51.2c a litre. As the oil companies say, market forces then come into play. In a heavily populated area such as Sydney or Melbourne where they can get rid of a bit of petrol-the word dumping is used-they drop the price. So the maximum wholesale price is a fictitious price and that is the reason why I continually criticise the Prices Surveillance Authority. It fixes a maximum wholesale price. It is set up by the Government, by the taxpayers of Australia, to be a watchdog, to look at the margins and the retail and wholesale prices in Australia but it does not do its job. That is the reason why at the last election I supported getting rid of the Prices Surveillance Authority and setting up some other authority, or having some mechanism, whereby everybody in Australia would get a fair and respectable go. We have inquiries-one is now being conducted in Canberra-which go on and on but what happens when the dust settles down again? The people of Canberra will be paying a much higher price for petrol than people in Melbourne and Sydney pay. That is enough about the marketing side of petrol. Let me get back to what the Petroleum (Submerged Lands) Legislation Amendment Bill is all about. Speakers have had a wide-ranging debate on this Bill, Mr Deputy Speaker, so I am not taking advantage of your noble looks and good nature. Mr DEPUTY SPEAKER(Mr Blanchard) —I have been watching the debate, though. Mr GOODLUCK —I realise that. I said that I supported some of the things that the honourable member for Dunkley (Mr Chynoweth) said today. Regrettably, we need exploration in Australia; we need oil companies because they provide employment and we need the structure of their industry to supply petrol to dealers, et cetera. We definitely need exploration and that is the critical point: there has been a decline in exploration. I compliment the shadow Minister for science and energy, the honourable member for Bass (Mr Smith), who did a very good job today. He spoke for 30 minutes and detailed the problems associated with exploration in this country. When the Fraser Government introduced import parity pricing many people, including me, questioned it because all of a sudden the price of petrol went from being low to being very high. Everybody started talking about the increased costs of transportation, the increased cost of goods and many other things. We had to do it, but we put a few question marks on it. We said that this was for future exploration, for looking for alternatives and for making certain that we would be self-sufficient in the long term. At the time we said that we thought we would be self-sufficient by 1990-three years off. But we will not be self-sufficient by that date; we are still only about 70 per cent self-sufficient. I supported that step because I thought that it would mean we would not have to depend on some Arab countries and other countries throughout the world for our supply of petrol. The supply of oil is always volatile. I have just been handed an article which is headed `The Coming Oil Drought' by Peter Gill. That is interesting. There is an oil drought and we must be aware of it. I am stressing the point that by the year 1990 we thought that we would be self-sufficient in oil. We all subscribed to import parity pricing because of that. We all tolerated that tremendous increase in the price of petrol and liquefied petroleum gas because of that. But we will not be self-sufficient, therefore the Government must have a good look at its policies. I keep harking back to comments made by the Treasurer (Mr Keating). Year after year in opposition he kept saying that import parity pricing was taxation by stealth at the petrol pump. During that wonderful campaign when the present Prime Minister (Mr Hawke) came to power, he kept telling us that his Government would reduce the price of petrol by 3c a litre. But he could not do that. He could not do it because the Government needed that revenue. It needed it then and it still needs it now. That is the reason why the price of petrol has gone up by an average of 13c a litre since this Government came into power. Government members cannot deny that. That is why they go crook at me. The honourable member for Denison (Mr Kerr) said that I had not done anything about the price of petrol. At least I have tried, year after year, to draw attention to the problems of this industry. I have often said that it is complex, difficult and hard to unravel. Several years ago I made a suggestion. We have the Prices Surveillance Authority and we have had other inquiries ad infinitum to try to resolve this problem but we never seem to be able to clear it up. Yet backbenchers such as I, who have been here for a long time, get involved in all the activities pertaining to this House. We get involved in committees. Some get involved in the more fashionable committees. They think that they are great-- Mrs Kelly —What are we talking about? Mr GOODLUCK —I will come back to the point in a moment. The Minister should not worry about me; I always come back to the point. I suggested that we could have set up a committee in this Parliament-a bipartisan committee-to look into the pricing of petrol in this country. We could have resolved the problem. We could have satisfied the people of Canberra that they were not paying too much for their petrol. There has been a hue and cry that they should have paid far less, as they did for their home heating oil and so on. We could have looked into all this in a bipartisan way. We could have had two or three members from the Government benches and two or three from the Opposition-- Mr McVeigh —You should have been the chairman. You are the most knowledgeable man on petrol in the world, not just in Australia. Mr GOODLUCK —I know that. The honourable member does not have to tell me that. He is a very good member too. Mr McVeigh —I am trying to tell those other fellows. Mr GOODLUCK —I only wish this debate was being broadcast today. That sort of publicity would help me in Tasmania. The honourable member for Denison had better be aware of that because everyone in Tasmania knows me and I have not started on him yet. One day I will. The Minister for Employment Services and Youth Affairs (Mr Holding) was in Tasmania the other day and had a very good reception-- Mr McVeigh —We will carve him up. Mr GOODLUCK —Yes, we will carve him up. Had the Government adopted my suggestion we may have been able to resolve this problem. We could have participated in trying to overcome some of the problems that regrettably have occurred within this industry. We may have been able to save some of the poor retailers, the people who are heavily involved, from some of the problems associated with this industry. This is a complex industry. We need exploration and we need oil companies. But at least we should direct our attention to trying to overcome some of the marketing problems involved and make certain that the people of Australia, who are paying so much in taxation for exploration and for petrol, are getting their money's worth. By doing that we will make it better for everyone concerned. Mr WRIGHT(Capricornia)(5.05) —The honourable member for Franklin (Mr Goodluck), who has just resumed his seat, has made some very interesting observations about the petroleum industry. However, I think we ought to place on record that it was the Fraser Government that introduced import parity pricing. I wish to make sure that this is clear. One of the reasons why import parity pricing was put to this Parliament, and finally accepted by the Government and the Parliament, was that we needed to ensure that Australian petroleum explorers would be encouraged to find new reserves and, if they found them, were able to market them at a reasonable, competitive price. That meant that in some way we had to put up the price of imported products. If we had not done that and if we had changed overnight there was not only the problem for the explorer but also the problem for the hundreds of people who were involved in the oil industry generally. I think particularly of those people who are part of the industry which processes the crude oil to the point of it becoming fuel. The honourable member for Franklin also made comments about the increases that have taken place in the price of fuel. He castigated the Hawke Government. In his contribution he did not bother to say that there had been something like nine reductions in the price of fuel in the last four years. But regrettably these reductions were not passed on by the industry. When the Prime Minister (Mr Hawke) first came to power he said that he would bring down the price of fuel and he did. But we have been caught up with import parity pricing introduced by the previous Government and we are caught up with the demands and costs carried by the industry itself. I wish to place one set of statistics on the record. When the Fraser Government came to power the wholesale price of fuel-this goes back to 1975-was 13c a litre. When the Fraser Government left power in 1983 the price had risen to 38c-a 25c a litre increase. I heard the honourable member for Franklin say earlier that the wholesale price of fuel in the capital cities is now around 50c a litre. In some seven to eight years under the Fraser Government we had a 25c a litre increase and in the last five years under the Hawke Government we have had an increase of 12c. I really think that we are trying to keep the price down and we have done well. I will now come back to the Petroleum (Submerged Lands) Legislation Amendment Bill. As the Minister for Primary Industries and Energy (Mr Kerin) explained in his second reading speech, this Bill proposes a number of amendments which will improve the administration of petroleum exploration and development activities in Australian off-shore waters. I believe that it is important that administrative decisions can be made without unnecessary hold up. One of the amendments in this Bill will give the Commonwealth Minister power to decide a matter if there is prolonged disagreement on it. I know that there is a joint agreement with Western Australia. I understand that the Minister has said that Western Australia should not be given a privileged position, that it ought to be in the same sort of position as other States-and I know you have a special interest in this, Mr Deputy Speaker. Whilst there has to be consultation and co-operation and whilst the joint authority should be used to the maximum, if there is prolonged disagreement someone has to make a decision. I think that as we have many other joint authorities involving the States and the Commonwealth, the buck has to stop somewhere. In this instance the buck must stop with the Commonwealth. It is in the national interest that the Commonwealth bears the decision finally and bears the buck. There are also other amendments which will streamline the decision-making process and this is surely necessary. A few years ago there was a review which found there were anomalies. There were hang-ups or hold-ups within the decision-making process, particularly as they related to the awarding of exploration permits. There were other anomalies that really created some difficulties when it came to the declaration of locations and the size of locations in certain circumstances. These circumstances were such that they could actually frustrate the development of an oil discovery. The Minister clearly explained those circumstances when he made his second reading speech. We know that industry everywhere is looking to cut the unnecessary red tape, to remove those problems and those barriers in the decision-making process, to remove the inappropriate bureaucratic rules that can make life in the market-place so often unnecessarily difficult. This legislation is going down that track, to resolve those anomalies. I am pleased that the Opposition is supporting the proposals in principle. I readily support the proposition; I think that there are too many rules in the market-place. There is too much paper warfare. There are too many reports to be made to government at every level. There are too many records to be kept. We need constantly to review the requirements that we place on business. The Hawke Government has taken the initiative. It has given the lead. In my own State of Queensland there has been a promise to review the quasi-autonomous non-government organisations. There are almost a thousand of them. Some meet only a couple of times a year. They gather up reports and information from all the elements within the market-place, be it the rural sector or the commercial sector. These rules and regulations virtually control the life or quality of life of commercial enterprise. They control almost every aspect of industrial life. So we have to review them constantly. If the rules and regulations are in the interests of product safety, in the national interest or in the interests of creating competition and ensuring that competition prevails, I have no argument with them but where they are unnecessary or over-costly we need to review them. There is a need for governments at every level-local, State and Federal-constantly to wind down this `rules mania', as it can be described. There is a need for departments to rethink the delegated powers they have accumulated. They keep bringing down regulation after regulation. Somehow we have to put a stop to what is taking place. There is almost a rush by every department wanting to bring down more rules. It has to be a two-way street. Therein lies the importance of this Bill. Whilst governments must listen to industry and must loosen up in the system, so must industry rethink its own rules. I refer to the petroleum industry. We certainly need some explanations. I agree with the honourable member for Franklin and the honourable member for Dunkley (Mr Chynoweth) that we need to have a hard look again at the petroleum industry as it affects the retailers, in other words, the service station proprietors, and the consumers. We need to get some explanations about the cost structures that prevail within our community. To come back to my local area, central Queensland is supposed to charge only 1c more for petrol than the capital city of Brisbane. That is the margin. Yet prices can vary by as much as 10c a litre. During price wars in Brisbane the price can be as low as 40c a litre. In Rockhampton it can be as high as 59c a litre. A week later in Rockhampton can be selling petrol at 46c a litre. Whilst that takes place all the time, in country areas, my rural areas, the price can still be as high as 64c a litre. We question why. If the oil companies can sell to independents and jobbers at a price 10c below the normal wholesale price day in and day out, week in week out, throughout the year, why can there not be an across the board drop? When one talks to the companies they say that the reason they bring down the price sometimes is that there is an oversupply. I do not believe that is true. These wars happen at any time. There are price escalations at any time. It boggles my mind to think of what the oil companies must make. They increased the price of fuel in Sydney overnight by 10c a litre. I wonder what that meant for the oil companies' coffers. Yet whilst these wars take place at any time, the independents are out there buying at a cut rate year in year out, all the year round, and the oil companies' selected sites are selling at cut rate prices. These are usually independents, where the jobbers have a say, or they are sites owned by the companies. Again the price can be as much as 10c a litre cheaper than the normal market price in capital and provincial cities and sometimes 15c or 16c a litre cheaper than the price in some country areas. The free enterprise service stations however, the ones in the cities and not owned by oil companies, constantly get squeezed and screwed by the companies which force them sometimes to operate on a margin of less than 2c a litre. I have done some work on it. I have talked with the proprietors. There is no way they can operate on much less than 6c a litre, that is, meeting the cost of money, paying wages, and paying the lease back to the oil companies. The retailers are caught up in another serious situation. They have to pay cash up front for every litre of fuel they get from the oil companies. If they buy 200,000 litres a month, as some of them can-I know that some of them buy only 50,000 litres, but many of the big sites buy 200,000 litres a month-they have to pay cash when the fuel is delivered. But not so for the jobbers, the independents. These fellows are given 60 days credit, and they are getting away with it. I know that many of them make a lot of money on the short term money market, especially when then can buy at 10c a litre less. The fellow leasing the service station is worse off still. There is supposed to be a law that those who have their own service stations are allowed to buy at least 50 per cent of their fuel requirements from an alternative supplier. So a Shell service station can buy half from Ampol. But, whilst the rule in law says that is so, the rule in practice prevents it. The oil company which owns and leases the site says, `You buy what you like but don't put it through our bowsers, don't store it in our tanks'. It is a stupid rule that ought to be changed. I go back to this point: if the companies want deregulation, if they want a loosening up of the market to take away the bureaucratic inhibitions that prevail, let them also come back to fairness, to equality, as to the rules they lock their suppliers into. In this country, oil companies control everything the proprietor does, whether it be in regard to the fuel he buys, the quantity he buys, the rebate he gets or the price he sells it at. Yet we are supposed to be talking about free enterprise. Despite the fact that proprietors lease the premises, the site, they have to buy through that company and have their fuel transported by that company. In central Queensland recently a proprietor told me-this case involves the Shell Co. of Australia Ltd; I do not mind naming the company-that he has to pay 6c a litre to get his fuel transported just under 250 kilometres to his petrol station. He also said that if he could deliver it himself he could bring down the transport cost to a little over 1c a litre and that he would be prepared to pass that saving on to the consumer. I asked him why he did not do so. He said that he did not do so because the oil company, Shell, did not let him. The oil company has locked him in to a monopoly situation. Not only must he buy its fuel, but also it must be transported at the company's price. Yet companies talk about competition and free enterprise. It is baloney. It does not really exist. The time has come to stop the rip off of people in rural towns and the huge mark-up these companies have. They rip off rural consumers because no competition prevails. Rural consumers pay 64.9c for fuel a little under 250 kilometres from a major provincial city, half the distance from the capital city of Brisbane where, I reiterate, the additional transport cost is supposed to be 1c a litre. Yet for half the distance they are charged 6c a litre. I said before that there is a need for a two-way street. That has to be the approach to the rules which certainly inhibit those in the market-place, those at the retailing level. I welcome these amendments, which are going to help the petroleum explorers, but the same explorers in the wholesaling and refining industry have a responsibility to get their own house in order. They have created havoc within the petroleum retail industry. Some time back we had about 2,500 service stations. We are now down to about 1,500. The estimates given to me by the motor traders industry association, which the service stations belong to, are that before long we will have a cut of about a third in the number of proprietors. They will be cut back to around 1,000. Some time back the service station industry in Queensland was employing 12,000 people. I am now told that it employs about 5,000. Where once seven or eight people would work at a service station, in so many instances today it is a husband and wife operation, working many hours. In some cases, as one fellow said, people are working 19 or 20 hours a day. They have to do that because the mark-up has been brought down to 2c and 3c a litre. Why? Because the oil companies are playing a game whereby their selected stations, their selected jobbers and independents are getting special deals. There have been instances where the oil company owned site will drop the price overnight by 6c or 7c, and the war is on. What do the other oil companies do? They say to the proprietor `We will give you a 3c rebate but you will carry the other 3c', regardless of overheads and the cost of money. (Quorum formed) As I was saying before the quorum was pulled on me, there are many service stations throughout the State of Queensland, and I suggest throughout Australia, that are at risk because of the rules and policies which have been put in place by the oil companies. Although they have come to the Government and said that they want to change the rules and want to loosen them up in order to free up the market-place, this must be a two-way street. They have to do the same for the consumers and also those in the retailing industry. There are people at risk, people who have invested tens of thousands of dollars, in some cases hundreds of thousands of dollars, who face losing that investment because of the policies, rules and tactics of the oil companies in which a false price war is created. I ask the question, which must be answered: If the oil companies can cut the price of fuel by 10c a litre and sell to independents and jobbers on a regular basis throughout the year, why can they not make a reduction across the board so that every Australian consumer benefits? Let them come back to fair play. Let them set in place rules that are in the interests of private enterprise. Instead, the moment a person builds up a business, the oil companies increase the lease periods or when the expiry date arrives take away the leases. There must be a two-way street and rules that suit the total industry and also the nation. The oil industry stands condemned because of some of the tactics and policies it has used in the past. Mr Lindsay —What about the Queensland Government? Mr WRIGHT —The Queensland Government can be condemned on every level in this field, but at least it is trying to bring in a consumer price that is fair to everybody. There have been negotiations with the Queensland Government and the Motor Traders Association to try to set down a fair margin. I believe that that margin is about 6c a litre, but some operators are trying to work on 2c a litre. It is simply impossible. Although I support the amendments to the Act, I say to the oil companies that it is time that they also played the game. That will happen only when they start considering their responsibilities to the retailers who make the industry viable and who keep the oil companies alive. Without the retailers, the oil companies would not sell one litre of fuel. Mr DEPUTY SPEAKER(Mr Ruddock) —Order! The honourable member's time has expired. Mr IAN CAMERON(Maranoa)(5.25) —The House has just heard the usual rantings and ravings from the honourable member for Capricornia (Mr Wright) about the high cost of fuel, but he failed to say that since his own Labor Government has been in office it has increased the excise taxes on fuel from 6c to 20c a litre. That is a disgrace, and that is the area on which he should be concentrating his rhetoric. I would also remind him and his colleagues that Queensland is the only State that does not impose any State taxes on fuel. The Queensland Government makes every effort not to tax the fuel users, as this Labor Government does. It is well known that the Treasurer (Mr Keating) brought in the concept of using the petrol bowser as a tax, and he, as Treasurer, has done nothing but adopt that course since he has been in government. Over 60 per cent of the price of every litre of fuel the motorist buys goes to the Commonwealth in taxation in some form or another. Yet the Federal Government is now seeking to introduce yet another tax on petroleum-because that is what it is, an indirect tax. Cash bidding for leases involves an amount of money which this Government is asking the private oil exploration companies to put up in tender form. So far, this Government has collected about $30m in indirect taxation from the companies in order to do this. Yet Australia today is facing a crisis in its economy. Oil is one of the major ingredients of our economy. We have seen falls in the price of the shares of oil companies which are involved in exploration for this essential raw product, a product that we need to remain self-sufficient. For example, the price of shares in Santos Ltd, one of the major Australian exploration companies, has dropped $1.30 down to $5. Ampol Petroleum Ltd is an original Australian company that was set up to look for, refine and retail petroleum in this nation, and its price has fallen by $1.10. Those companies are in a much weakened position in raising capital and going out and looking for new product. This Government has put this country in an horrendous trade position. In Question Time Ministers mentioned the situation in the United States of America. If one does one's figures, as the Treasurer should, one will see that, as the Leader of the Opposition (Mr Howard) was trying to explain to him today, proportionally the United States is in no worse position than Australia is in terms of trade. Our trade imbalance is running per year at the rate at which the United States figure is running per month; in percentage terms the position is exactly the same. We are in the horrendous position that, having found crude oil in Australia some 25 to 30 years ago, we are now starting to run out of that resource. If Australia has to import large quantities of crude again, we will be paying out between $2 billion and $4 billion in import costs. In view of our present balance of payments position, such a prospect will make our financial position even more horrendous. Yet the Minister for Primary Industries and Energy (Mr Kerin) and the Government are seeking today to reintroduce yet another tax on this industry, an industry which is so important to us all. I remind the House that I have a number of oil provinces in my electorate. Unfortunately, Maranoa does not front the sea, so I am not involved in off-shore exploration. However, I represent the Cooper Basin, which is a very large area of about the size of Victoria in the western part of my electorate, where the Jackson oil field is situated. That is the only on-shore oil field paying royalties. Indeed, it is the only on-shore oil field producing sufficient oil to be in the royalty regime but it pays royalties to both Federal and State governments. I am not keen on such companies paying any direct taxes. Enough is being raked out of companies these days, with tax at 49c in the dollar, for them to pay their fair share of tax at company level without burdening them with taxes up front and taxes on inputs. Another area is Roma, where the first discovery of oil in Australia was made. That is probably a larger gas producing area. Unfortunately, the explorers have not found too much crude. They have found quite a deal of concentrate and gas, which is converted and sent mainly to Sydney and Melbourne, to the bigger industrial areas, for use. Moonie, which was the first commercial oil field in Australia, is within sight of where I live. So I have had a long-standing interest in this industry, and that is why I continue to take such an interest. I believe this industry has been totally overtaxed. The regime that was put in place by a previous government was very wrong. I have said so for many years. We still have a resource rent tax on oil that is bringing in roughly $1.2 billion-an upfront tax on the industry which ought to be abolished, and I will not be satisfied until it is abolished. It is a total distortion of our taxing and business regime to continue to tax this industry up front. It should not be done that way. The same applies to the excessive tax placed on coal. It should be abolished as well. I support the announcements of the Government and the new Minister for Resources (Mr Peter Morris) in wishing to deregulate the industry. I disagree with the honourable member for Capricornia, who raves and rants about prices. There is nothing like a bit of competition to bring down the price of anything. The less regulation and government control on the industry, the better. The oil industry is like the communications industry and some other industries, such as the wheat industry, in which I am a grower-they are totally controlled by government regulation. The oil industry cannot ship oil without a pricing arrangement and neither can the refineries operate. There is very little free movement of the product around Australia. It has to go where it is directed. There is a whole regime of pricing arrangements. Deregulation should take place now that the dollar has been floated and, therefore, there is not the opportunity, as there was previously, for international companies to transfer profits overseas at an advantage to them-which they were doing in pretty big licks, although a lot of that has stopped. Our dollar is supposedly free floating, although it is not quite as free a float as we would like to see it. The Reserve Bank of Australia made a profit last year of $2.5 billion in trying to float the dollar. In other words, it is a fairly firm float. It sits on top of the Reserve Bank, but at least it is freer than it was. The other thing that is of great concern to us is the drop in the world price of oil. This is coming down because of the slump in oil shares. Oil dropped US39c yesterday; it is now down to $US19.83c per barrel. Unfortunately, the Middle East is now the main hot spot in the world, and that is one of the reasons for the fall in share prices. If the Americans and the Iranians, in other words, the Russians, who are backing Iran, start to blow battleships out of the water-at the moment they are really just zapping the odd oil derrick-we will see a rapid increase in the price of fuel and in the price of any oil which we import. We continue to import oil because we do not produce the heavy crudes. We will find that that will severely affect our trade balance once again, and force the deficit up. These are the main parameters and the main reasons why I believe we should not be supporting these Bills, which seek to put this cash bidding regime in place. When companies are looking for oil, the first thing that governments do is offer an exploration licence. The companies have permits to explore. The geologists told us for many years that there was no oil in Australia, but the Government actually encouraged oil companies to come here. It used to pay them a dollar for dollar subsidy-a 100 per cent subsidy-to find the first oil reserves in Australia. Now we see the complete opposite. Governments are now greedy for the taxes involved and are ripping the taxes out of anybody who wishes to produce anything up front in this country. We see the greed of the Government in wishing to tax this industry yet again under this legislation. I believe we should continue to encourage companies to come from all around the world to look for this product. We should not be charging them for the privilege; most other countries do not, although some do. This sort of bidding does take place, for instance, in respect of the off-shore leases in Alaska. Companies there pay some horrendous prices for particular oil province leases, but they are very rich leases. In Australia a company initially has to put up a bid, with the risk of not knowing what is there. Having found a product, it then has to get another licence from the Government in order to produce. I do not see why governments should be involved in this sort of taxing arrangement at all. A similar thing is being suggested with FM-frequency modulation-radio. There is not much correlation with the oil industry, but the same sort of thinking is running through the minds of the departmental officers or those in the Government and the Cabinet who have put these things up. They wish to start indirectly taxing radio operators by charging them an up front tender fee to get the licence. I would have thought that the ideal in our system would be to encourage business to establish, to get it up and running and making a substantial profit, and then tax it. In that way we would not be in the situation we are in today, where we are wasting all our money and trying to collect more and more tax. Government expenditure is continuing to rise we are continuing to socialise ourselves and we are going down the gurgler, as happened yesterday, at a fast pace. This is the sort of economic exercise that we do not wish to be associated with. Under this legislation, companies have to report back to governments on their statistics. But the oil companies have always had to do this. They log the holes with electric logging equipment, and in order to find out what is down them they take cores at every 200 or 300 feet. The cores are drilled out of rock, and are boxed up and usually sent to the State departments. They are kept there and this information is used for further exploration work. This practice will continue. Although this Bill says that it has to happen, it has been happening. There is a charge of a flat $300 for the repatriation of a transfer, so there is more red tape involved. That is really all it amounts to. These companies will have to employ two or three extra people to fill out the forms and to continue to abide by the regulations which this Bill lays down. We on this side of the House believe that the Government should be getting out of these sorts of areas. The other thing we wonder about is what the Australian Democrats might do. They are fairly hypocritical in some of their actions in the way they vote in the Senate. This Bill has to get through. The Democrats were against the cash bidding and proposed the two-year sunset clause in 1985 for the area in the Ashmore and Cartier fields. They now appear to be supporting the Government-they must be, otherwise the Government would not be going to the trouble of putting the Bill through-and will allow this new tax to go through the Senate. Another matter that should be of interest to the Government is an article in the latest Bulletin, of 27 October, headed `The Coming Oil Drought-Painful energy decisions ahead for government', written by journalist Peter Gill. I will read from a couple of sections and then ask the Minister at the table, the Minister for Employment Services and Youth Affairs (Mr Holding), whether they may be incorporated in Hansard. This article, in the Business and Investment section of this notable Australian journal, states: Australia is running out of oil. The country's premier oil province, Bass Strait, is simply drying up. It is a geological fact yet to be fully addressed in any co-ordinated fashion by the federal government and a phenomenon hardly appreciated by the general public. I suppose that is understandable because the general public would not really know and understand that 80 per cent of our oil production comes from Bass Strait. It is by far and away the biggest oil field in Australia and we depend practically totally on that oil field for our oil needs. The workers do an excellent job off-shore there. Esso Australia Ltd and the Broken Hill Proprietary Co. Ltd have put an enormous amount of money into this facility to allow us to become self-sufficient in our oil needs. The workers do an excellent job off-shore there. Esso Australia Ltd and the Broken Hill Proprietary Co. Ltd have put an enormous amount of money into this facility to allow us to become self-sufficient in our oil needs. We actually export up to $2 billion worth of oil, although we continue to import the heavy crudes that are needed because we do not produce them in this country. The article goes on to state: Crude oil self-sufficiency will dive from the present level of about 90 per cent to less than half that amount and Australia will be left facing the inherent danger of being dependent on foreign oil, the most likely source of which being the volatile Middle East. I mentioned that fact in my opening remarks. Mr Smith —Heaven forbid. Mr IAN CAMERON —Yes, heaven forbid. If the rockets start flying there and sinking the oil tankers, we can imagine to what level the price of oil will go. Previously, when we have run out of oil, Indonesia and the Middle East have been our main sources and I imagine that is where we would go back to because they have fields that supply the light crude oil that the refineries in Australia are set up to handle and that they need to refine it into the diesel and petrol that we basically use in this country in order to produce our raw exports, the wool and wheat et cetera, that are so badly needed if we are to maintain our standard of living. Central to the explorers' argument is that this measure represents secondary taxation on top of the normal company taxation, which I have already mentioned. This Government is not happy enough to be taxing the companies at 49c in the dollar, which is about half. Then there is the capital gains tax. If one buys and sells a piece of capital, the capital gains tax applies. This will affect the oil industry and the sale of these leases. Every time a company makes a sale transaction, practically half-I am not saying exactly half-of any profit made will be paid in capital gains tax. That is over and above the company tax, and the personal tax that is paid on the wages earned. Now we have the resource rent tax proposed in this Bill. The article goes on to state: . . . secondary taxation . . . is an impediment to exploration, particularly in a country where the prospectivity for oil is low compared to the rest of the world. That is very true because we are one of the last major countries of the world to find oil. Now that we have found it, we continue to look for it. The companies that operate in my electorate, for instance, in the Cooper Basin and the Channel Country, have enormous problems. They are faced with looking for this product in the far outback of Queensland. Of course, they have to spend inordinate amounts of money to find it. Then, of course, no sooner do they find it than governments, both Federal and State, start taxing them for the privilege of having gone to all that trouble and having found a product that we all really need. In this legislation they are being asked to pay tax. But, worse than that, before they even get to the stage of looking for the product, this iniquitous type of cash bidding is to be put into place. We have heard all about the wealth tax that the screaming lefties in the Australian Labor Party are on about. But, of all the taxes that the industry has to face, this has to be the worst. Of course, it is the multinationals, the so-called wealthy people that the left is so concerned about, who have the money and who will put it up front to get these leases. Australian companies will find it very difficult to fill up their envelopes with enough cash to be able to buy one of these leases. I have much pleasure in opposing this Bill. Mr Deputy Speaker, I seek leave to have the material that I mentioned earlier incorporated in Hansard. Mr DEPUTY SPEAKER(Mr Ruddock) —The situation in relation to the incorporation of material in Hansard is that, while leave may be sought, it is for the Chair to determine whether the material is suitable for incorporation. The ruling in the past has been that material that is capable of being read should not be incorporated. Only material that is not capable of being read is able to be incorporated. The procedure is not one by which honourable members should seek to extend their speeches unduly by having material incorporated. Leave not granted. Mr HOLDING(Melbourne Ports-Minister for Employment Services and Youth Affairs)(5.45) —I thank honourable members for their contribution to the second reading debate. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Motion (by Mr Holding) put: That the Bill be now read a third time. The House divided. (The Deputy Speaker-Mr P. M. Ruddock) Ayes . . . . . . . . . . . 74 Noes . . . . . . . . . . . 53 —— Majority . . . . . . . . . 21 —— Baldwin, P. J. Johns, G. T.Beddall, D. P. Kelly, R. J.Bilney, G. N. Kent, L.Blanchard, C. A. Kerin, J. C.Blewett, N. Kerr, D. J. C.Brown, John Klugman, R. E.Brown, Robert Lamb, A. H. (Teller)Brumby, J. M. Langmore, J. V.Campbell, G. Lavarch, M. H.Charles, D. E. Lee, M. J.Chynoweth, R. L. Lindsay, E. J.Cleeland, P. R. McHugh, J.Courtice, B. W. McLeay, LeoCrawford, M. C. Martin, S. P.Cross, M. D. Mildren, J. B.Cunningham, B. T. (Teller) Milton, P.Darling, E. E. Morris, AllanDawkins, J. S. Morris, PeterDubois, J. S. Mountford, J. G.Duncan, P. O'Keefe, N. P.Fatin, W. F. O'Neil, L. R. T.Fitzgibbon, E. J. Price, L. R. S.Free, R. V. Punch, G. F.Gayler, J. Saunderson, J.Gear, G. Scholes, G. G. D.Gorman, R. N. J. Sciacca,C.Grace, E. L. Scott, J. L.Hand, G. L. Simmons, D. W.Harvey, E. R. Snow, J. H.Hayden, W. G. Snowdon, W. E.Holding, A. C. Staples, P. R.Hollis, C. Tickner, R. E.Howe, B. L. Uren, T.Humphreys, B. C. West, S. J.Hurford, C. J. Willis, R.Jakobsen, C. A. Wright, K. W.Jenkins, G. T. Young, M. J. Adermann, A. E. Katter, R. C.Aldred, K. J. Lloyd, B.Andrew, J. N. (Teller) McArthur, F. S.Blunt, C. W. MacKellar, M. J. R.Braithwaite, R. A. McVeigh, D. T.Brown, N. A. McPhee, I. M.Burr, M. A. Miles, C. G.Cadman, A. G. Millar, P. C.Cameron, Donald Moore, J. C.Cameron, Ian Nehl, G. B.Carlton, J. J. Peacock, A. S.Cobb, M. R. Porter, J. R.Connolly, D. M. Prosser, G. D.Cowan, D. B. Reith, P. K.Dobie, J. D. M. Robinson, IanDowner, A. J. G. Rocher, A. C.Edwards, Harry Shack, P. D.Fife, W. C. Sharp, J. R.Fisher, Peter Smith, W. L.Goodluck, B. J. Spender, J. M.Hall, Steele Sullivan, K. J.Halverson, R. G. Tuckey, C. W.Hawker, D. P. M. Webster, A. P.Hewson, J. R. Wilson, I. B. C.Hicks, N. J. (Teller) Woods, R. L.Hunt, R. J. D. Wooldridge, M. R. L.Jull, D. F. Jones, Barry Shipton, R. F.Duffy, M. J. Fischer, TimCharlesworth, R. I. Cameron, EwenBeazley, K. C. McGauran, P. J. Question so resolved in the affirmative. Bill read a third time. Debate resumed from 23 September, on motion by Mr Holding: That the Bill be now read a second time. Mr DEPUTY SPEAKER(Mr Ruddock) —I understand that it is the wish of the House to debate this Bill cognately with the Income Tax Amendment Bill (No. 2) and the Medicare Levy Amendment Bill. There being no objection, I will allow that course to be followed. Mr PEACOCK(Kooyong)(5.55) —The Opposition will be proposing amendments to the Taxation Laws Amendment Bill (No. 3) 1987, the Income Tax Amendment Bill (No. 2) 1987 and the Medicare Levy Amendment Bill 1987 which we are debating cognately this evening. Two of those amendments deal with the Government's attempts to alter the existing procedures whereby the current income tax scales are presented to Parliament on an annual basis. The Government seeks to institute those income taxation rates, including the Medicare levy, as a standing order. The Bill proposes that they will be reintroduced to Parliament only when those rate scales change. The Opposition disagrees with that. First, the Opposition is moving amendments to clauses 4, 5 and 6 of the Income Tax Amendment Bill (No. 2) and clause 11 of the Medicare Levy Amendment Bill, to bring both pieces of legislation back to the traditional basis of annual imposition Bills. Secondly, we wish to move an amendment to clause 8 of the Taxation Laws Amendment Bill (No. 3). Clause 8 proposes the insertion of a new section, section 46e, in the Income Tax Assessment Act to counter certain schemes involving the payment of dividends out of profits arising from the revaluation of assets. Similar proposals were originally announced in earlier legislation brought before the House on 4 June 1987. That Bill was passed over due to the election. It is proposed in the current Bill that the same date, 4 June, still apply for the application of the new section 46e. Nevertheless, a careful reading reveals that the proposals put forward in the legislation before us are not the same as those detailed in the earlier Bill. We will, therefore, be seeking to avoid the retrospective nature of these changes by moving forward the effectiveness of this part of the legislation to 23 September 1987, the date on which this legislation was introduced to the Parliament. I will leave a detailed discussion of this amendment to the committee stage of this debate so that I may concentrate on the broader aspects of these three Bills, one of which is an attempt to deny the annual review of tax scales by the Parliament. It may be argued that the Government is simply proposing to put the legislation for income tax on the same basis as most other tax law, that is, subject to standing legislation. Nevertheless, we consider that because income tax represents well over 60 per cent of the total receipts of the Commonwealth Government and that a large proportion of that is embodied in the legislation before us, there is a case for treating this legislation on a different basis. The life blood of government is, after all, supplied through these sorts of Bills. The Opposition would be failing in its duty to uphold the supremacy of Parliament to allow such an enormously important means of debating government policy just to disappear. The Executive, that is, the Government, is answerable, after all, to the Parliament. It is the responsibility of Parliament to conduct a thorough debate to make the Australian community cognisant of the ongoing policies of the incumbent executive. We are not prepared to allow that executive arm of government to ride roughshod over the Parliament. The Government wants to deprive the people of Australia of a continuing opportunity for their chosen representatives to debate the very essentials of government. There is much in these tax Bills that needs airing. The Income Tax Amendment Bill (No. 2) seeks formally to impose the tax payable on the basis of the new rate scales announced in the September 1985 tax reform package. However, to call that package one of tax reform certainly seems a deep misrepresentation. I thought tax reform was all about achieving efficiency, simplicity and equity. If this is simplicity and equity, the Australian taxpayer must be wondering whether the definitions in the dictionary have been changed. Let us examine a few aspects of the Government's so-called reforms. The company tax rate has been increased from 46c in the dollar to 49c. In the second reading speech on the Income Tax Amendment Bill (No. 2) the Government argues that this helps to defray the cost of the new imputation system. However, more accurately, the Government has used the opportunity to set the corporate rate at the same level as the top marginal personal income tax rate. But where is the forethought in raising the corporate tax rate? If anything, a 49c top personal income tax rate is itself too high. We should be bringing that down rather than raising the company rate to match it. Some commentators argue that our effective corporate tax rate is much in line with those in other countries such as the United States, where there is a rate of 34 per cent because of the large concessions provided through such devices as the depreciation allowance. However, when it comes to business, as well as politics, perceptions play a major role. A foreign investor, or even just the homegrown variety, will look at the United States rate, the Hong Kong rate, the Singaporean rate and then the Australian rate. Forty-nine cents in the dollar does not look all that attractive. At a time when Australia is facing an enormous adjustment task to cope with a foreign debt of $83 billion-Labor's well-known debt-this Government raises the corporate tax rate. I recognise that in the Budget there is an undertaking to institute a review of corporate taxation. One hears from the Treasurer (Mr Keating) in forums outside that this will bring about a reduction in the corporate rate and, of course, the cessation of various concessions that apply to business at the moment. I assume that when that rate is brought down it will be a real competitive rate on the international playing field of taxation, so that investment in this country will become more attractive. I recognise that it is not just the rate of taxation that is denying the opportunity for investment to be made more attractive. I think the three fundamental areas are: high rates of taxation, the uncertainty over labour costs, and high interest rates. But the tax factor is there. Of course, when that tax rate does come down I assume that the personal rate will be coming down as well, because it hardly seems likely that we would structure a significantly reduced corporate rate and allow tax avoidance through the ability of individual taxpayers to incorporate. This therefore poses the question: Why on earth, with all the opportunities that were missed in the Budget, did the Government increase the tax rate to 49c and undertake a review in the Budget while recognising that it will be substantially reducing that rate? Sure it brings the Government more revenue, but it denies that incentive factor to people who would have been looking for opportunities to invest in Australia. It is just another lost opportunity. The Government talks about tax reform and tax relief while in fact it lifts a rate rather than giving such relief. I recognise that relief is coming, but, again, it is a classic example of not thinking through the consequences of the action to lift the corporate rate to 49c and then shortly thereafter, at the end of the review, to reduce it. So much for certainty in tax rates under this Government. As I said, at a time when Australia is facing an enormous adjustment task to cope with a foreign debt of $83 billion the Government raises the corporate tax rate. No wonder Senator Peter Walsh talks about the road to Argentina. The Government missed a golden opportunity in the September Budget to quicken the pace of economic adjustment and to set in place the policies to facilitate business investment. Instead, as I have indicated, the Government raised the corporate tax rate. Obviously little forethought has been put into this policy. This is a tired government thrashing around in the dark, unable to do the job correctly. Let us look at one of the other Bills being debated today. The Taxation Laws Amendment Bill (No. 3) is full of revisions to Labor's previous legislation. The Government brings in legislation, dumps more constraints and taxes on people, finds that the legislation is not working well enough and brings back more legislation to tighten and tighten further. The Bill is full of alterations to hastily prepared and obviously ill-considered legislation. Honourable members may care to note that the largest number of those revisions apply to the capital gains tax legislation. What a sorry state this tax legislation is in, and what a complicated burden the Government has placed on taxpayers. My office receives dozens of phone calls seeking clarification of and guidance on the capital gains tax laws. Those callers are not getting any satisfactory answers from the Treasury or the Australian Taxation Office. That is because not even the experts there are sure what to make of the Government's legislation. Because of the capital gains tax, uncertainties and, to use the dreaded phraseology that we have heard from the Government so often, `unintended consequences'-and thus injustices-abound. It is enough for the Government to dump this capital gains tax on the Australian community and to come in here time and again talking about how it is hitting the wealthy. Honourable members opposite know they are not tackling those who have been paper shuffling and who have been able to amass significant sums of money. But their capital gains tax is striking at that body of people in the community who work extraordinarily hard and, let us say it frankly, who look for a decent return at the end of the day as a consequence of their exertions when they want to sell their businesses and get hit with a capital gains tax at a rate far above the rates struck elsewhere. The Government might be able to argue for the imposition of taxes to hit those who have made wealth beyond belief. I do not believe in a wealth tax, although honourable members opposite might. But a tax such as the capital gains tax, which honourable members opposite repeat so frequently is aimed at the wealthy, in fact strikes at the abundance of small business people in this community and denies again another incentive for further investment. But this holds pride of place in the Government's legislation. I indicated that, with the capital gains tax uncertainties, the so-called unintended consequences and injustices abound. Just last week the Taxation Institute of Australia highlighted that one of the most serious deficiencies of the legislation is the inadequate provision for dealing with the roll-over of business assets. For example, a businessman intending to upgrade existing factory premises and move to new expanded premises will pay capital gains tax on the disposal of the old premises with no roll-over relief. There is no doubt that what is required in this nation is investment in business, investment in capital stock and investment in plant and equipment. But incentives necessary to bring that about are not contained in this sort of legislation. The Treasurer forecast in the Budget an increase in investment in plant and equipment of only 3 per cent. He has since been careering around the world saying, `It could be significantly higher than that; it could reach 7 per cent or even 10 per cent', but he has been unable to substantiate that while the Budget says only 3 per cent. It is investment in plant and equipment that is the real engine for growth. It is what we are on about when we talk about forcing the pace of adjustment and moving resources from the public sector to give room to the private sector to bring about investment so that the economy can grow in a real fashion. But taxes such as these just deny that possibility. The example that I gave just a moment ago-that of a businessman wishing to upgrade his premises or move to new expanded premises and having to pay capital gains tax on the disposal of the old premises with no roll-over relief-moved the Tax Institute to say, and I agree with it, that the deficiency constitutes `a serious disincentive to business investment'. There are a large number of revisions of the existing laws in the Bills before us, but the problem I have just mentioned is not properly addressed in them. We will obviously be seeing more legislation just like this in the House in coming years. Of course, the mess that has been made with the capital gains tax raises yet another spectre. I fear the day when the Government introduces-and I touched on this a moment ago-a wealth tax. I understand that all honourable members opposite, as socialists, believe in the redistribution of wealth. I also understand their desire to deny to the community, made up mainly of middle income Australians who strive to improve their lot, that they attach themselves any longer to the socialist philosophy. I also recognise that within the Australian Labor Party there are some who are holding true to the old principle and are concerned about the sort of wealth they see portrayed before them. I have some distaste also for some of the gross demonstrations of consumption that have occurred in this community, but at the same time I could not agree with a wealth tax. Yet I fear that the day is coming soon when the proposals of the Left, endorsed by the Centre Left, will be introduced into this country. Mr Price —What about an inquiry? Mr PEACOCK —I will deal with an inquiry in a moment, because I do understand that the Socialist Left is hankering for the opportunity to look into this. It is arguing daily for the establishment of a committee to review the distribution of wealth in this country. Why have a committee? Only a small number of individuals in this country have great wealth; the great bulk of Australians who are very comfortably well off, by world standards, make up the next group; and then there is a very large and significant number whom certainly we would call poor. No committee will cure their ills. I would have thought that the Left would know that as well. I believe the underlying motivation for such a committee is that it would provide a forum from which the Left could push for a wealth tax. The Left will argue that this new tax is the only way to redistribute income and help the needy. But what it will do is place disincentives on those much needed wealth creators in the community. I accept that much of the money that has gone through the stock exchange or has gone into takeovers has not created any real wealth-it has just changed ownership and substantially increased the alleged wealth of the people concerned-but the barriers that the Left would put down in the pursuit of a few people would be barriers to the real wealth creators, those who are really creating and doing in this country, who are the driving motivation for the sort of system that the majority of us on this side of the House warmly endorse. We need not to place those disincentives in the face of our much needed wealth creators, but to focus on creating more wealth, which will inevitably benefit the whole community, rather than sniping at those who do create the wealth. The reason for so many poor people in this country is the high level of unemployment. If the Government really wants to help the poor, there is an absolute need, yet again, to quicken the pace of economic adjustment so that the level of unemployment can fall. A wealth tax will not solve any problems; it will only exacerbate the existing ones. I am not so sure that the Hawke-Keating duo will allow the Labor Party to put forward a wealth tax. Just imagine how the old pork barrel Barrie Unsworth in New South Wales or John Cain in Victoria would squeal at such a thought in an election year. But that lies a little down the track. Just imagine what a mess the Government would make of such a tax when we look at the debacle of the investment-depressing capital gains tax or, for that matter, the foreign tax credits system. The Government talks a lot about trying to restore incentives which enable Australian firms to compete effectively in export markets, but instead it introduced the foreign tax credits system, which restricts the ability of Australian companies to expand overseas. This is because after paying tax in the foreign country of operation, the company is now subject to the high Australian corporate rate when bringing profits back home. Some incentive to return the profits to Australia! No wonder the Treasurer has initiated a review into business taxation. It is sorely needed. Before I finish I want to highlight one other specific aspect of the changes in the Taxation Laws Amendment Bill (No. 3). Clause 15 of the Bill seeks to replace the existing sections 108 and 109 of the Income Tax Assessment Act to remove certain technical deficiencies which have become apparent in the legislation's application. Sections 108 and 109 are designed to prevent the avoidance of tax by private companies and their shareholders through the use of disguised dividend distributions. In the case of section 108, this is done by enabling amounts to be deemed to be dividends where private companies make loans to their shareholders which are disguised dividend distributions, thereby avoiding tax at the shareholder level. Section 109 deals with the case where private companies pay excessive remuneration or retirement allowances to their shareholders and directors, and indeed their relatives, thus seeking to avoid taxation at the company level. A basic deficiency in the provisions has been, as I understand it, that, except for the limited circumstances covered by section 109, they do not extend to payments made to associates of shareholders so that in such cases even though the shareholders may directly benefit, the provisions would not operate to deem the amounts involved to be dividends. Therefore, new legislation is being introduced to cover the instances where loans and reimbursements are made to associates of shareholders. I commend those amendments, and I see the worth and the logic of that element of the legislation and the Government's seeking to move on yet another tax avoidance scheme. However, I do want to draw attention to the fact that there is some concern that the revisions to section 108, in particular, could result in a deal of uncertainty in the minds of those who are making what could be considered legitimate intercorporate loans-and there will be some of those-because the decision on what constitutes a legitimate or illegitimate use of loans is made at the discretion of the Commissioner of Taxation. I know that the tax Act is riddled with discretions, and of course many worthwhile arguments can be put forward as to why it is that the Tax Commissioner should have a discretion; therefore, putting the provisions in the new section under the discretion of the Commissioner is non-controversial. It occurs right throughout the tax legislation. Many would argue that there are too many instances of that, but often the case can be made for the discretion to be present. But the open-ended nature of the discretion in this case would appear to me, as would a number of others in the tax Act, to create uncertainty, and it may well hinder business investment. Therefore, I do ask that once the Bill is enacted, the Government request the Commissioner to draw up extensive guidelines as to what he expects will be covered by section 108. I conclude by returning to the question of reinstating this legislation on an annual rather than on a standing basis. Obviously, from what I have said, there is much that can be criticised in, and raised in criticism of, the Government's taxation and general economic policies. It is the prerogative of the Parliament to review such vital policies annually. The Government must realise that there is no substitute for genuine economic debate, and taxation policy forms an integral component of economic policy. Of course, it forms more than an integral component of the Government's revenue raising, of the Government's budgetary policies. Instead of cutting expenditure, the Government has looked to get close to an alleged balanced Budget by seeking more and more revenue. The heightened central element of taxation in Australia today under this big spending, high taxing Government, bears upon all that is happening in the economic sphere and it is present in the minds of many Australians. Forming the integral component of economic policy, as it does, the Government must surely realise that the high level of taxes and charges imposed on the Australian community really cannot be sustained. Because the Government has relied too much on tax collections instead of taking the hard decisions on expenditure reductions, the rate of adjustment is too slow. Every opportunity should be taken to recognise this deficiency, and the Government ought not be allowed to hide away its inadequacies by making these Bills standing legislation and therefore removing them from annual debate. As a consequence, the Opposition will be moving the amendment that I foreshadowed earlier. Mr MARTIN(Macarthur)(6.20) —The Taxation Laws Amendment Bill (No. 3), the Income Tax Amendment Bill (No. 2) and the Medicare Levy Amendment Bill represent yet another step by the Hawke Labor Government towards its goal of a fair and equitable taxation system. Despite the comments that were made by the honourable member for Kooyong (Mr Peacock), I believe that goal is represented by these Bills. The system which the Government is pursuing is one in which tax avoidance and evasion will not be tolerated; it is a system in which every income earning Australian pays his fair share of tax, no more and no less. This Government has already achieved a great deal in this area and it did so because it had the courage and determination to introduce such things as a capital gains tax, a fringe benefits tax and a whole range of other measures to stop the rorts that have been in existence in the Australian tax system for a long time. We have also been able to deliver income tax cuts to every Australian. Most income tax paying Australians are pay as you earn taxpayers who have been shouldering the tax burden of this country for far too long. The Deputy Leader of the Opposition, the honourable member for Kooyong, made a number of points about this Government's commitment to tax reform. He said that the phrase `tax reform package' used to describe the measures the Government introduced after the National Taxation Summit was not a very true representation of what actually took place. I remind the honourable gentleman that following the tax debate, following consideration of the taxation package and following the decision of this Government to look at the whole question of tax reform, this Government was courageous in approaching the need to do something about the rorts in the system that had operated for so long. The Deputy Leader of the Opposition has a short memory. When the Liberal-National Party Government was defeated in March 1983 it went out of office leaving the top marginal tax rate at 60c in the dollar. He now bemoans the fact that this Government, in two successive steps, was able to reduce that rate to 49c in the dollar. He did not mention in his contribution today that this Government was able not only to institute tax reform measures in the whole range of marginal tax rates but also to increase the threshold at which tax had to be paid. We introduced a range of measures and reduced the number of steps in marginal tax rates so that our tax system is much fairer and more equitable. It is one which everyone can understand. The Deputy Leader of the Opposition also touched on corporate tax rates. He was kind enough to acknowledge that the Government has signalled its intention to carry out a review of that issue. He also signalled his hope that this could also lead to further reductions in personal income tax. Of course, everyone would like to see those sorts of variations put in place if it meant that everyone was paying his fair share of taxation. On the other hand, if people for some reason are getting away with various lurks and perks, they are the ones who have to be picked up through corporate reviews or whatever the Treasurer (Mr Keating) has indicated he will take into consideration. The honourable member for Kooyong also made some remarks about a reasonable investment environment. I pose the question to him: What, in his view, is a reasonable investment environment? Is he forgetting to talk about the interest rate regime that presently operates in this country? We acknowledge that prime lending rates were 21 or 22 per cent, but they have now gone down. All interest rates have trended downwards because of the sound economic policies that this Government has been able to put in place. When one couples that with taxation reviews, taxation package changes and the introduction of a range of other taxation initiatives which have cleaned up the tax system, I put it to the honourable member for Kooyong that the environment for investment has been developed. However, what concerns me is some of the nonsense spoken about why the investment environment in Australia has not matched the investment environment of overseas countries. For example, it disturbs me, as a member who represents a steel making and coal mining region of Australia, that a number of significant national companies are not investing purely in Australia and perhaps diversifying their manufacturing base or looking at other areas in manufacturing that they could get into. Rather, they are prepared to invest overseas. I say to those companies that perhaps they should look again at the environment that has been created by this Government and reconsider the position that they have adopted to date. I am sure they would find that there are a number of opportunities in the investment environment created by the taxation measures to which we have referred in the Bills before us today, the interest rate regimes that have been put in place and the macroeconomic, and now microeconomic, policy that is being developed by this Government. As was mentioned in the second reading speech by the Minister for Employment Services and Youth Affairs (Mr Holding), the taxation Bills we are considering today will amend income tax laws to give effect to a number of early announcements that were made by the Treasurer and a number of Budget initiatives. I will quickly refer to some of those matters. For example, the Taxation Laws Amendment Bill will introduce anti-avoidance provisions to combat dividend stripping operations that seek to exploit benefits provided under the imputation system. The honourable member for Kooyong, in his contribution, failed to mention imputation when he was talking about the effect that taxation regimes have on the business community and the investment environment. He failed to recognise or mention the important contribution that the imputation system will make for those companies, particularly the small business and the small investors on whom he was concentrating so much. The Bill will specifically amend the Act to ensure that the intercorporate dividend rebate is limited or denied in cases where a dividend stripping operation gives rise to a capital gain or loss. It will also deny the intercorporate dividend rebate in respect of dividends paid out of profits arising on the revaluation of an asset as part of a scheme to avoid tax on disposal of the asset concerned. Even the honourable member for Kooyong must recognise the benefits in cracking down on the rorts that exist in the taxation Acts, as they presently stand, through these measures. I would have thought that in his contribution at least-I hope honourable members on the other side who will speak in this debate-- Mr Price —Where are they? Mr MARTIN —That is a good question-where are they? There is not one in the House. I would have thought that they would be prepared to address these sorts of basic issues. This Bill will amend the Act to deny franking credits to companies and franking rebates to individuals and certain trustees under the imputation system of company taxation where a dividend is paid in the course of a dividend stripping scheme. We are endeavouring to crack down on the tax avoidance industry and I believe these measures will go towards doing that. Provisions in the Bill will also overcome the technical deficiencies in sections 108 and 109 of the Act that have prevented their proper application-namely, to prevent avoidance of tax by private companies and their shareholders by disguising dividends as non-taxable loans or advances and as tax deductible remuneration. I would have thought that every member of this House would support those basic measures. Sitting suspended from 6.30 to 8 p.m. (Quorum formed) Mr MARTIN —I am pleased to see that people from this side of the House are prepared to come in and support their Government's initiatives in fighting tax avoidance and tax evasion through these Bills. This stands in stark contrast to the situation when the Deputy Leader of the Opposition (Mr Peacock) delivered his miserable effort this afternoon. Not one member of the Liberal or National parties was in the background to hear him speak. The only Liberal who was present was acting as the Deputy Speaker. I think that is absolutely disgraceful. As I was saying before the suspension of the sitting for dinner, the Bills before us tonight are related to the Government's continuing attack on the tax avoidance industry. These Bills also propose some amendments to the capital gains tax area. As I have said previously, capital gains tax is a very brave effort by this Government to attack an area of tax avoidance which had previously gone undetected. The changes being proposed in this legislation tonight refer to a couple of very important areas. The first is in relation to the treatment of assets owned by a taxpayer who ceases to be a resident of Australia. The changes are intended, amongst other things, to remove any deterrent to Australian residents wishing to gain work experience overseas or to foreign experts considering a temporary assignment in Australia. Tax on capital gains will not apply in certain circumstances in these cases. Secondly, this Bill ensures that, for the purposes of determining exactly what a capital gain is, the cost base of an interest or units in a trust will not be reduced where the trustee distributes income freed from tax by deductions allowed for certain income-producing buildings. That is very important. There are a number of very important initiatives which this legislation seeks to address. Amendments in clauses 12 and 38 will ensure that employer-provided contributions to superannuation funds under an agreement ratified by the Australian Conciliation and Arbitration Commission or a State tribunal will not render employees for whose benefit they are provided ineligible for deductions under section 82aat of the Income Tax Assessment Act for their own contributions to qualifying superannuation funds. That is a very significant amendment. It is even more significant in view of what has happened in the world stock markets simply because many superannuation funds which have invested in the stock markets are suffering some losses. Of course, employee contributions may at some stage be affected by those crashes on the stock exchange and it is hoped that through amendments to legislation, such as that proposed in these Bills, the harshness of what may happen can in some way be softened. The payment of income under the Commonwealth's assistance for isolated children scheme and the veterans children education scheme to or in respect of students who are 16 years of age or more is also to be made subject to tax under this Bill. This is in line with the Government's moves to make these sorts of schemes more consistent with the mainstream provisions of the Austudy scheme. On many occasions Opposition members have come into this place to berate Austudy. It is the Government's intention, through the introduction of a revamped Austudy scheme and allowances for keeping people at school rather than taking unemployment benefits, to go a long way towards retraining and providing opportunities for young Australians to get a better education and take a more important place in the work force. I believe that these measures which have been introduced are part and parcel of rationalising our entire taxation regime as far as training allowances are concerned. The beneficiary rebates to recipients of Austudy will also be extended to recipients of these two schemes and this is a very worthwhile part of this legislation. This Bill will also give effect to the 1987-88 Budget proposal to vary the 1987-88 maximum rebates of tax and the income levels above which the rebates shade out for taxpayers in receipt of unemployment, sickness or special benefits and certain Commonwealth education allowances. For example, the rebate for married taxpayers will increase from $280 to $430 and the rebate for others will increase from $190 to $280. I believe that these sorts of initiatives do not get enough publicity, nor are they the ones that are seized upon as evidence of this Government's commitment to helping those most in need. Quite frankly, I am sick to death of reading indifferent articles or hearing people berate the Australian Labor Party and this Government for supposedly walking away from their traditional base and not servicing the needs of their traditional constituents. That is absolute nonsense. Through the taxation measures that we have introduced and through these sorts of measures, such as increased rebates for married taxpayers and rebates for people on special or sickness benefits, we are improving the lot of those people in society. That is what the Australian Labor Party stands for. It does not stand for handouts to the rich. It does not stand for not asking people in the community to pay their fair share of taxation. Through the courageous efforts of this Government, and through the introduction of a variety of taxation changes and varying the mix of our taxation raising abilities, we have been able to see that people are, for the first time, paying their fair share of tax. Therefore, we are able to redistribute money to those people who are in greatest need. This Bill also specifies the basis for calculating the 1987-88 provisional tax payable-by applying those rates of tax and Medicare levy to 1986-87 taxable incomes. They will be increased by 11 per cent. There is some concern amongst those people on fixed incomes who are picked up by provisional tax caused by not knowing the increases likely to be passed to them. This legislation picks that up. As the Minister stated in his second reading speech, there is also an amendment to the gift provisions of the current law to allow deductions for gifts to the Lionel Murphy Foundation and to the Australian-Hellenic Memorial Trust Fund. Certainly on this side of the House there are no objections to that sort of allowance being made in this legislation. The last provision of this Bill to which I wish to refer demonstrates beyond doubt that this Government is committed to pursuing those who attempt to rip off our tax system. As honourable members would be aware, it was the case in the past that where a tax debt relating to an assessment was the subject of an objection or an appeal it might have been several years after the date on which the tax became due and payable before the objection and appeal process was finalised. In these cases the limitation period would commence on the due date for payment and could, therefore, expire at a time before the objection and appeal process was completed. The Hawke Labor Government inserted a modifying section into the administration Act to ensure that this does not happen in the future. A technical argument has now been advanced to the effect that our intention has not been achieved by the new section. This Bill will amend the section to make our intention perfectly clear. It also signals to those attempting to defraud the system of $250m that they will not be permitted to do so on a legal technicality. I believe that all of these provisions, which are part and parcel of the Government's continued attack on the tax avoidance industry, will contribute to that income redistribution process which is so important, which this Government believes in and which this great Party stands for. I hope that, despite what the honourable member for Kooyong had to say in his very shallow contribution to this debate this afternoon, there are those on the other side who can see the need for this sort of legislation, which endeavours to collect a fair share of tax from those people in the community who in the past just have not been prepared to contribute. Mr TUCKEY(O'Connor)(8.12) —We are having a cognate debate this evening on the Taxation Laws Amendment Bill (No. 3) 1987, the Income Tax Amendment Bill (No. 2) 1987 and the Medicare Levy Amendment Bill 1987. I wish to address my remarks to the Medicare Levy Amendment Bill, which is a Bill to amend the Medicare Levy Act 1986. The main proposal in the legislation seeks to raise the Medicare levy from 1.145 per cent to 1.25 per cent. This is in substantial contradiction to promises made by the Government. When Medicare was introduced we were told not only that the levy would remain at one per cent but also that it would be fully self-supporting. Both claims were patently untrue. In the Sydney Morning Herald on 21 February 1986 the Prime Minister (Mr Hawke), when responding to an Opposition call to re- affirm an election promise that the levy would not be increased during the Government's present term, was reported as saying, `I affirm the Government has no plans to change the Medicare arrangements'. We are now seeing an increase in the levy which will substantially increase the cost to taxpayers. To avoid further embarrassing annual debate on the disaster that is Medicare the Government proposes to amend the legislation so that only changes to the levy need be debated in this Parliament. As with the indexation of excise and other matters, the Government is at pains to avoid the scrutiny of this Parliament. This is another attempt to do so. Consequently, as has already been announced by the Deputy Leader of the Opposition, the honourable member for Kooyong (Mr Peacock), we have circulated amendments which will be dealt with in committee to ensure that the status quo is retained and that the Government is required to reaffirm the levy each year. The Opposition does not believe that the Parliament should be denied this annual scrutiny. Medicare represents the best possible example of the divergence in philosophy between the Australian Labor Party and the coalition. Mr Holding —Have you ever used it? Mr TUCKEY —Of course I have used it. Do not ask silly questions. There is a major divergence in philosophy. One has only to read the speech in September 1983 by the Minister for Community Services and Health (Dr Blewett), and some of his other remarks, particularly those about the rights of the community over the individual and the fact that freedom and privacy are a bourgeois right, to understand that. Let us get something straight. Both sides believe in assisting the needy in the community. That is not the point at issue. Both sides recognise that all Australians are entitled to high quality, affordable health care. The divergence occurs in the arena of how best to deliver that high quality health care. Labor politicians believe that the Government can best deliver the actual service. The coalition parties believe that the private sector is best equipped and better motivated to do the task. And that is most important. International evidence is on the coalition's side. Mr Holding —Rubbish! Mr TUCKEY —The Minister says, `Rubbish!'. He should go to Russia some time. Let me tell him what it is like in Yugoslavia. I have a close friend whose father was told that he was going to be left to die because he was a bit too old to be put in the system. There is always another side to that type of regime. My close friend was able to fly over there with American dollars and his father is still living 10 years later. He was going to be left to die. Let us get straight which regime is preferred. We say that the private sector would deliver the service best. If one has the money to assist the needy why must one then build and staff a hospital? Why not just assist the needy to go to hospital? The Prime Minister goes fishing and plays golf with private businessmen. He goes fishing occasionally with those who provide the property. He goes fishing with those who run certain businesses and who are too smart to own the property. They say things that the Minister at the table, the Minister for Employment Services and Youth Affairs (Mr Holding), would not understand, although if the Minister went back to the Richmond City Council he might find someone there to give him some advice. Mr Holding —It was not as graft-ridden as the Carnarvon Council. Mr TUCKEY —The Minister has had plenty of time to talk about the Carnarvon Council but he does not. He has got the Nicholson report; I have got nothing. Madam SPEAKER —Order! The honourable member will resume his seat. The Minister will cease interjecting. Those on the back bench will cease interjecting. The honourable member for O'Connor will not respond if anybody interjects, nor will he shout across the table. Mr TUCKEY —Thank you, Madam Speaker. I am here to treat this matter very seriously. It is a serious matter. I am not inviting the type of remark that has been made but I will not be bullied by the member for the Richmond Council. Madam SPEAKER —The Chair will make sure that no member is bullied. Mr TUCKEY —I thank you for your protection, Madam Speaker. I am talking about the divergence in philosophy. The most efficient in our business sector recognise that if one is in the business of providing a service one does not necessarily buy the building from which one delivers the service. They have woken up that there are specialists in every area and they rely on the specialists. They are the most successful businesses in our country. Recently, I read that one of the major businesses which have been taken over was very quick to sell the fixed assets of the company which it said were not in its line of business. Under Malcolm Fraser the system was designed to look after the needy. The Government is constantly throwing the figure of two million uninsured people at us, implying that they were all too poor to buy a health insurance policy. Of course they were not. Maybe some did but generally the poor were accommodated and other people decided to take the risk because they were healthy. It is one of the Goebbels-type arguments that have been put up in this place time and time again that because 1.9 million people did not have a health insurance policy they were all too poor to afford it. I knew some of those people. They were wealthy and believed that they could carry their own insurance. That is a practice that occurs in many parts of the private sector as well. Now that we have a system for everyone the needy are neglected. Mr Cunningham —We all pay. Mr TUCKEY —We are all paying, including the needy, but the needy are neglected. This Government believes that it can measure expenditure by excellence. The needy are now neglected because of a lack of services. We have 100,000 people waiting to get into hospital. One has almost to give three months notice to get sick. Mr Martin —Where? Mr TUCKEY —All around the place, and in New South Wales in particular. The comments of Mr Anderson are not true, because I have been around talking to the people and it is about time we started a group of people called Patients in Waiting. Labor members talk about elective surgery as though that is something one can have if one feels like it, a bit like cosmetic surgery. Elective surgery includes treatment for cataracts and hip joint replacements. I spent four months in an orthopaedic ward and I saw people come in who could not walk. They came out of the ward able to walk purely and simply because they had had hip joint replacements. If that is what is considered elective surgery, if that is what one has to wait three or four years for under this wonderful Medicare scheme which is supposed to help the needy, then I say that there is something wrong with it. Let us look quickly at the escalating cost. Back in 1970-71 government expenditure was $1,080m and private expenditure $855m, totalling $1,935m which represented 5.65 per cent of gross domestic product (GDP). In 1975-76, after the disastrous Medibank experiment, that had jumped to $4,052m for the Government, $1,508m for the private sector; $5,560m in total, or 7.45 per cent of GDP. Taking the figures last available for public and private sectors, the total was $16,108m or 7.5 per cent of GDP. That figure of 7.5 per cent relates to a massively growing GDP in this country. Unfortunately, it grew on account of the borrowings by this Government and not by genuine growth in the commercial sector. But that is less than is being spent in many other countries. At present the United States of America spends 8.6 per cent of GDP, West Germany 9.4 per cent. This year total Federal expenditure alone for 1987-88 is estimated at $8,212.9m, which is up $713.6m on that for last year, an increase of 9.5 per cent. That represents 10.4 per cent of total Commonwealth outlays. Health has again got ahead of the interest charges. Interest charges came fifth in one-line items in the last Fraser Budget; last year they came second at almost $8,200m. They have dropped to $7,900m and health expenditure is marginally ahead of the interest bill. I wonder whether that is the Government's order of priorities, but that is what it has achieved. The Medicare levy is now 1.25 per cent, which means that the taxes paid by Australians on account of that levy, according to the Budget estimate, amount to $2,065m, an increase of $350m this year, or an increase of 20.4 per cent. It now represents 2.6 per cent of total Commonwealth revenues. This is the Medicare levy which Labor members call `free medicine', but it certainly is not. The cost per capita for Australians back in 1970-71 in nominal terms was $152.36 which in 1986-87 values was $719. In 1984-85 the figure had jumped in nominal terms to $1,029.27 and in 1986-87 values was $1,191.20. Every Australian man, woman and child is now contributing $23 a week for Labor's free medicine, and people have to give three months notice to get sick or they have to pay more. The Minister for Community Services and Health has told us all sorts of wonderful things. Today I reread his second reading speech. In that speech in 1983 he told Australians that something had to be done. The cost of a bed would escalate to $130 a day if we did not have this wonderful thing called Medicare. Today one cannot get a hospital bed under $250 a day, so the system was not too effective in that regard. When Labor introduced Medicare the insurance cost was $9.60 a week for a typical Australian family. That figure is now over $16. As I have said, the levy is raising $2,065m, and that is what we were promised would be the total cost of the system. But if one goes to Budget Paper No. 1 and looks at the cost of medical services and benefits and of hospital services and benefits, which I presume is the cost of Medicare, one finds a figure of $5,212.5m-over double, or 230 per cent more than the actual levy. One can see that because clearly the levy is not $23 a week, which is the actual cost of health delivery in Australia. Prior to the election in 1983 when the health funds predicted this, the Minister for Community Services and Health scoffed at them in his second reading speech, but they have been proved to be correct. But now the Government has a tiger by its tail. The costs are escalating at a speed that the Government cannot control. As the figure is up to 1.25 per cent, the troops are getting angry. The solution of course is to reduce further the services, put caps on the rebates, find excuses, blame the profession, blame the hospitals, blame the foreigners, blame anybody. That is what the Government is doing; it is going through the schedules and cutting back services. Let me deal with ophthalmology. Cataract removal has been substantially reduced. The rebate for item 6848, lens extraction, has been reduced from $650 to $450, and that figure of $200 must now be paid by the patient. The rebate for item 6852, lens insertion, has gone down from $345 to $250. They are the maximums that can be paid out under Medicare or under certain private insurance. That is being left to the patient. There is a reason for that in that there is some wonderful new technology around. If that technology is available, a lot of operations can be carried out in the day and a professional can profit quite well. But what happens to those who cannot afford this service? I give the Government a warning while it continues down this road. Some incentive must be left for innovation. If that does not happen, people will not proceed to make the services cheaper, and there will be no gains for the Government or the provider of the services. There must be some common-sense approach, split it down the middle perhaps, but as soon as the technology arrives do not hit everybody because people will miss out. I add in passing that day surgery is another area in which the Government is now totally confused. This can represent substantial savings to patients and to the health provider, the Government in this case. The Government must make up its mind about it; it is procrastinating, it is pulling back, it is agreeing. There are huge opportunities and, although the Minister has made some positive noises, he has not done enough. The ultimate must lie in achievement. It is being said that a few doctors are not playing according to the rules in the removal of keratoses. The origins of skin cancer can be taken off via a freezing process and this process could quite properly be done in consultation. Apparently some were abusing that arrangement, but why throw the baby out with the bath water? Does the Government know that it also excluded venereal warts at exactly the same time the Health Department declared them a notifiable disease because they are a major cause of cancer of the cervix? The Minister for Community Services and Health has said in this place that the Government is spending a great deal of money on surveying that problem. What is more, in the area of health, because the Government has changed the rules, a medical specialist in this area no longer goes to the northern town of Geraldton in my electorate, but the Government has just announced a survey of 5,000 people to ascertain the effects of skin cancer. Surely with the resources the Government has at its disposal it should have discovered that before it threw out the baby with the bath water-in other words, before it threw out items 3330 to 3338, plus 3342 and 3346. That was stupid and ridiculous. In the other place today the Opposition asked a question of the Minister Assisting the Minister for Community Services and Health, Senator Ryan, and apparently the Government is thinking of fixing this matter. This is a pretty private thing. A lot of people would like to consult their own doctor. Obviously this is ridiculous. We had the example of the program shown on Sixty Minutes of a kid who is dying. The specialist professor said that if he had detected his skin cancer early enough-which he attributed to too much sun-he could have saved his life. It might be that even that other service, for keratoses, would be better back on the schedule, as it might save lives. You had better start chasing the very few doctors who have apparently cheated on the system. Throwing the baby out with the bath water might be a very expensive process. It shows that you do not understand this. It is like your understanding of the share market. You let the computers control the whole system. Mr Price —That is in America. Cut it out. Mr TUCKEY —Yes, and it is happening over here. If the computer tells you that you are spending too much money on something, your solution is `Cut it out'. Madam SPEAKER —Order! The honourable member should speak through the Chair and not to the honourable member. Mr TUCKEY —Madam Speaker, you are quite right, and I thank you for your advice. This is the sort of situation we have. It is not a solution to have the sorts of proposals that we have heard. But the Government says it is all the fault of the system. It has a tiger by the tail. Instead of going out into the community and trying to identify the need and the genuinely needy and, yes, raising taxes for that purpose and assisting those people, the Government has decided that it wants all the business. Well, it has got all the business, but now it cannot afford it. The people with money are getting the good services because they still have private cover. They can get into a private bed tomorrow because there are 9,000 vacant beds. Yet the Government has had to spend another $25m of taxpayers' money to try to improve its darling of a public hospital system. That has not worked, and it is time that the Government realised it. It must be a proper government and arrange systems that redirect money to people in need. It must not try to get into the business of running the system. It should buy the people who do that most efficiently. It must not kid itself that because it is the Government it is here to help them. That does not work. Mr PRICE(Chifley)(8.32) —I have been very disappointed by the Opposition's contribution tonight. As was mentioned earlier by my colleague the honourable member for Macarthur (Mr Martin), we have witnessed the sad situation of the Deputy Leader of the Opposition, the honourable member for Kooyong (Mr Peacock), a member and former leader of the Liberal Party of Australia, who really pulled that party through in 1983 against all the odds-if you like, the hero of 1983-speaking in this House on the Taxation Laws Amendment Bill (No. 3) and cognate Bills, with not one member of the Opposition being present during part of his contribution. Again, when the shadow Minister spoke, not one backbencher was there to support him. I am really surprised, particularly given the rhetoric during the contribution offered by both honourable members. I want to address some of the issues raised by the honourable member for O'Connor (Mr Tuckey) concerning the Medicare Levy Amendment Bill. The honourable member suggested that this is one of the best illustrations of the divergence between the Opposition and the Government. I am afraid that, when in government, one is required to have a policy and to implement that policy. That policy is publicly available and known by all members of the community. It would be fair to say that the Opposition has a Clayton's policy. It does not tell us what it is and we cannot pin it down or track it down. The Deputy Leader of the Opposition did not mention what the Opposition's policy was or what the Opposition would be doing as far as health is concerned, nor did the honourable member for O'Connor. All we heard was this carping criticism of the Government. Let us go through a few of the things he said. He referred to the system under Malcolm Fraser-this was the system that he extolled to the people of Australia but under that system two million people were uninsured. The honourable member said that Government members were very wrong in believing that those two million people were all poor and could not afford insurance. I can accept that proposition, that not every one of those two million people was too poor and could not afford it. But let me say that the overwhelming majority of them could not afford it. They were priced out of the health system. Their health needs suffered. Surely, in this day and age, the one thing that we ought to be able to guarantee to every citizen of Australia is that they will not be priced out of the health system and that they will be able to have medical attention, irrespective of their circumstances, whenever they require it, and that they should not put off seeing doctors or put off operations merely because of their financial circumstances. That is the difference between the Opposition and the Government. We in the Government are determined to make sure that we have a health system that is accessible to all Australians, whether they are new Australians or old Australians, whether they are wealthy or poor. There has to be a health system that people can access. The honourable member for O'Connor talked a lot about wanting to divert health to the private sector, to the more efficient side, as he called it. I do not understand what he means. Does he mean that we should close down some public hospitals? I find it very ironic that from time to time we get two different points of view from the Opposition. For example, earlier today the honourable member for Mitchell (Mr Cadman) was saying what a tragedy it is that there is no maternity section in the Mount Druitt Hospital, the hospital of which formerly I was a deputy chairman. I agree with him. I think it is a tragedy. But here we have one shadow Minister who purports to come from near the western suburbs or identifies with that area, so he says, and he says that we really should have this facility in a public hospital. Then we have the honourable member for O'Connor telling the people of Australia that we do not need public hospitals, they should be private hospitals. But the one thing that neither of them will tell us is that under Fraser, under this beautiful system that the honourable member for O'Connor extols, where two million people were uninsured and there was every incentive to go to a private hospital, the occupancy rate in private hospitals was exactly the same as it is now. We are asked to accept that the Liberal Government under Mr Fraser-the Leader of the Opposition was a key member of his Government and the Deputy Leader was from time to time a Minister in it-had got that system of private hospitals up to maximum efficiency, but what do the figures say? They say that under the present Medicare system the occupancy rate is the same. So it is very misleading to suggest that we can crank up the private hospital system to absorb more. As has been mentioned, in passing conversation earlier, one of the real problems with the medical system today is that so many doctors have a vested interest in private hospitals, in a couple of ways. Firstly, and quite boldly, they are part-owners of those hospitals. They receive a financial reward as the owners of those institutions, and they make a profit in terms of diverting patients there. Secondly-and I regret that this occurs all too often-patients, not knowing their rights, get told: `If you want to have an operation, I can do it tomorrow in a private hospital, but you will have to wait to have it done in a public hospital'. The patients go away thinking: `Isn't this terrible? This public hospital system is really not meeting the needs of the people'. That specialist does not tell the patient that he has an extensive operating list at the private hospital, that he could, if he wanted, increase his operating list in a public hospital, but chooses not to. He does not say, `It is your right to insist on having that operation done in a public hospital'. My wife and I were faced with that very dilemma when my son needed an operation. We said to the doctor, `We understand what you are saying, but no, we want the security of knowing that the operation is going to be performed in that public hospital'. And it was performed in the public hospital. This is the other element that doctors, and specialists in particular, never go into when discussing operations with patients. They never say in an emergency in a private hospital that the patient must be transferred to a public hospital. They never say, `Sorry, we cannot deal with this emergency. We are going to have to send you to the nearest public hospital to recover the situation'. Hopefully, it can be recovered. But in some cases, of course, it is not recovered. I really think that we have a job to do-I accept that there is some fault on the Government side here-to inform the people of Australia just what their rights as patients are. If Mr and Mrs Average have a problem with their car, and get an opinion from a mechanic, they can say, `My God, he is charging too much' or, `I do not agree with that'. They do not hesitate to say, `I am sorry, I am going down the road to seek a second opinion'. But it is a real tragedy that when it comes to doctors, to specialists, they do not say, `I disagree with that', or `Maybe that operation is not necessary', or, `I want a second opinion', or, `I insist on a second opinion'. They ought to be encouraged to do that. Let me also say this about the Opposition, from what can be gleaned from the contribution by the honourable member for O'Connor: the honourable member for O'Connor and members of the Opposition do not stand with the plight of the general practitioners. They side with the specialists, the people who are making the real money-the real beneficiaries of the current health system, such as the consultant physicians. I regret that. I sympathise with the plight of the GPs when, with changing technology, it is insisted that so much of the work that they could perform has to be performed by specialists. I am really pleased that in my contribution to the Mount Druitt Hospital I was able to liaise with the family medicine program whose aim it was to uplift the skills of GPs and to recognise the very important contribution they make in family medicine, in servicing the majority of patients. The honourable member for Macarthur raised a very important point about consulting physicians. I think the honourable member for O'Connor referred to eye operations and other operations. Yes, there have been changes in technology. Every member of this House in some endeavour, whether in agriculture, in administration, in banking-you name it-has seen the impact of changing technology. But what the honourable member for O'Connor asks the people of Australia to believe is that, with any change in medicine-any improvement that allows doctors to perform half a dozen operations instead of one or two a day-there should be a work practice demarcation border built in and the doctors should be insulated from any productivity improvements and should continue to receive exactly the same remuneration as they are used to receiving. What an absurd argument! Madam Speaker, how many times have you had to sit in this House and hear members of the Opposition say, `Look at all these nasty work practices, these demarcation disputes. They are bringing the country down.'? For our part, we have been saying, `Well, we are trying to work through them. We are getting, through processes of consultation, a real understanding of the difficulties in this area and we are getting changes'. But, no, when it comes to medicine, the honourable member for O'Connor wants to put a border around it and say that there should be no improvements whatsoever. On the issue of physicians, let me say that I sympathise with the Minister for Community Services and Health (Dr Blewett). Any unbiased observer of the health system would say that the task of the Minister-historically, that means any health Minister, whether Liberal or Labor-has been a most difficult one in negotiating with the medical profession. This area is no exception. I reiterate an undertaking given by the Minister during the election campaign, which was that we would review this area. That review is continuing; the discussions are continuing. I say publicly-I do not apologise for this-that I ask the representatives of the specialists to sit down genuinely at the negotiating table and negotiate legitimately and honestly in the patients' interests. This problem has to be resolved. No group in the community-Madam Speaker, you may think I am stealing the Opposition's words here-should be allowed to blackmail the public at large. Certainly, doctors should not be allowed to do this. On the issue of Medicare, I want to conclude my remarks by saying that there is a divergence in general philosophy. We certainly stand by the principle, and will defend it to the nth degree, that every Australian should have equality of access to medical facilities. Let me also mention one of the things that the Government has done. Members of the Opposition keep talking about waiting lists. I have already covered that in part. But it is also true to say that this Government has given the States $100m to reduce those waiting lists. Let me say this: At the meeting of State health Ministers, which included the Ministers from Tasmania and the Northern Territory-Ministers of the same political persuasion as members opposite-it was unanimously agreed that waiting lists were not the Commonwealth's responsibility. They acknowledged that in fact they are a State responsibility. There are a number of factors-I will not go through them-that contribute to them. Mr Cunningham —Go on; tell us. Mr PRICE —I am urged to tell. The important point to make is that at that ministerial conference it was unanimously agreed that this was a State problem. I congratulate the Minister for Community Services and Health for stepping in with the money. Obviously, the answer given this week in the New South Wales Parliament by the New South Wales Minister for Health, Mr Anderson, hurt; otherwise, the honourable member for O'Connor would not have mentioned it. I also want to direct a few of my remarks to the contribution made by the Deputy Leader of the Opposition. He talked about the high level of corporate tax and the fact that we have increased it from 43c to 49c in the dollar. I say to the Deputy Leader of the Opposition that one of the sad things about his leadership of the Liberal Party of Australia, and indeed the current Leader's deputy leadership of it, is that, when we decided to have a taxation summit meeting, the approach of the Liberal Party was not that taxation was an issue that needed to be addressed in a bipartisan way or that the Opposition would, as much as oppositions can, co-operate with the Government to develop a bipartisan approach. No, not at all; members of the Opposition sat on the sidelines and would not participate. The history of the Opposition has always been that it tends to agree with the good things we do, that is, where we are giving money away, and to complain when we are raising money. This reform has been the most thorough that any government over the last 35 years has put together. Members on the Opposition side should be ashamed of what they did not do. And they had more opportunities, and a better climate in which to do it, than we have ever had. It is a tribute to this Government and its determination that we have done this in some of the toughest economic times. There is a very good reason why the Deputy Leader of the Opposition did not mention why one would want to increase the company tax rate from 43 to 49 per cent, which would make it comparable with the top marginal rate of income tax. While ever there is a differential, there is a great incentive to incorporate. A lot of companies are incorporated merely to gain the taxation advantage. So, while ever there is a disparity between the two, that will be the case. With all of the Opposition's rhetoric about cutting down bureaucracy and making government more efficient, surely it can accept that point of view. Another thing I want to say, which was pointed out by the honourable member for Macarthur in his contribution, is that we have not heard one word from the Opposition about imputation. It is almost as though imputation was never brought in. Mr Cunningham —At 78c in the dollar. Mr PRICE —That is right. This Government had done for private enterprise something that the Opposition had always wanted to do but never had the courage to do. And we did it in the toughest of economic times-not in the halcyon days and with the opportunities that previous governments had, but which they forswore. The Deputy Leader of the Opposition made much of the impact of the capital gains tax. I have talked to a lot of business organisations about the impact of the capital gains tax. The Deputy Leader of the Opposition said, `We have this group of people who work really hard to build up the goodwill of the businesses'. I accept that a lot of small business people-in fact, most small business people-work exceptionally hard to earn their money. What he did not say was, `Does goodwill grow at a greater rate than the inflation rate?'. I accept that we can have good entrepreneurs, highly skilled people, who are capable of lifting the goodwill of businesses dramatically, but we are talking about the majority of people who put in long hours over a long time to build up that goodwill. Our capital gains tax is not like that in America where one is taxed on the nominal gain. In Australia one is taxed only on the real gains, that is, the gains less inflation. As far as the smaller small businesses are concerned, part of the goodwill is quarantined; it is not even taxable. If the Opposition wants to, it should develop a table to show me how goodwill increases at 1.2 per cent, 1.5 per cent, 2.2 per cent, or whatever, more than inflation. I suspect that it does not, but I ask the Opposition genuinely and earnestly to look at that. If it thinks it is a problem it should remember that we are taxing only the real gains. As my time draws to an end, I say to the House that I support, and I will continue to support, the fairness and equity that this Government has tried to put into the taxation system. Certainly, I support the measures contained in these Bills that get at the rorts, get at the schemes and scams that have developed. People are on notice from us that we will continue on this track. Madam SPEAKER —Order! The honourable member's time has expired. Mr BRAITHWAITE(Dawson)(8.52) —The honourable member for Chifley (Mr Price) begs a reply before he leaves the chamber. I will mention a few of the points he made, particularly in relation to tax and the dividend imputation system. I will be talking about imputation later in my speech. The honourable member might ask himself this question: Who was the Treasurer who removed, immediately upon coming to office, the $1,000 tax free ceiling on dividends that was introduced by the former Treasurer, the Leader of the Opposition (Mr Howard)? It was this Treasurer (Mr Keating). The honourable member cannot have it all ways. When we talk about the great advantages of imputation-and I admit them-we also have to look at the history of the previous Government. The honourable member bases his comments on a false premise when he says that imputation was some record creating activity of this Government. In actual fact, it was responsible for removing legislation from the books that gave not identical relief but partial relief to those people who were receiving dividends from double taxation. The honourable member also talked about the bipartisan approach to the National Taxation Summit. I can think of the bipartisan approach as being only that between the Government and the unions. I can remember some things quite clearly about the conference. True, the Government did have a fringe benefits tax in mind, but I can remember the Treasurer saying on one night that a fringe benefits tax applied to the employee, the receiver of the benefit. The next day Cliff Dolan happened to look at what his fringe benefits were and found that they would be too excessive. He said publicly, `No, it won't be a charge on the employee'. The following day, in the course of 24 hours, the Treasurer changed his mind and said that the fringe benefits tax-- Mr Holding —Oh, what rot! Mr BRAITHWAITE —It is not rot; it is the absolute truth, and I can recall it. I also raise the manner in which the Government came to that Summit on the subject of a consumption tax. It had it on the table that there would be a consumption tax, but there was no suggestion at that stage that there would be a capital gains tax. Yet by the time the conference was out, through some secret deal with the unions at a hotel in Canberra, we ended up not with a consumption tax but with a capital gains tax-obviously an offset-and a fringe benefits tax on businesses or corporations, not on the individual receiver of the benefit. I believe that asking somebody to pay the tax on the benefit received by somebody else offended every taxation canon that had ever been introduced under British law or Australian law. No amount of harping by the Government will convince me or the businesses that were taken to the cleaners otherwise. I thought it important to get those two matters on tax cleared up. In connection with the Medicare Levy Amendment Bill, the honourable member for Chifley went to great lengths to talk about the vested interests of doctors and specialists in the private hospitals of Australia. There are two hospitals in Mackay: one run by the Catholic Church, the Mater Misericordiae Hospital, and the other a private hospital, the Pioneer Valley Hospital. If anybody tells me that specialists and doctors of the medical profession can somehow have a vested interest in hospitals such as that run by Mater Mothers, I would be quite surprised. Those establishments have in their time provided a medical service which is not available in the public area. I refer here to intensive and palliative care which is a very good service provided by the Mater. Yet they are the ones who have been attacked under the Medicare system which the honourable member for Chifley glorifies. The subsidy rate has been reduced and the waiting list for vacant hospital beds has increased. That has occurred for one reason, and it does not matter how much money this Government throws at any State government, whether it be $100m or more; if the program is wrong the system will be wrong and the queues will grow. That is what is happening at the moment. Because of the doctor choice arrangement people will be going into the public hospital system-joining the queue-hoping that they do not have to give notice of an illness. On the other hand, the services available, particularly those available in Mackay and, I suggest, anywhere else in Queensland, are as good as, if not better than, those in the public hospital system because they are run as hospitals and they do care. I refute the nonsense given to us by honourable members opposite, particularly when the owners are accused of referring patients to their own hospitals for their own ends. The honourable member talked about waiting lists but he then went on to say that as a member he was able to tell his doctor or his specialist where he wanted to go. That is the right of every patient, and some people pay dearly for that right. The shadow Minister for health, the honourable member for O'Connor (Mr Tuckey), mentioned that the family cover for hospital treatment has increased from $9.60 prior to the Medicare system being introduced to $16 today. If the honourable member for Chifley is talking about double taxation as far as dividends are concerned, why does he not care for these people who are being doubly taxed, once under the Medicare system, which is compulsory, and again when they pay the extra $16 a week in order to have a choice of doctors? There are many people in that particular category who want their family to have good health care and who are prepared to pay for it. The Medicare Levy Amendment Bill seeks to increase the levy from 1.15 per cent to 1.25 per cent. It is interesting to note that the Medicare levy will be increased this year by some $350m-that is, from $1,715m to $2,065m, which is an increase of 20.4 per cent. That is a rather massive increase. But in spite of the size of that increase, one has to take into account that it goes nowhere near the payment of the expenses it is supposed to cover. If we look at the expenditure side of health outlays we will notice that there has been an increase of some $713m for this year, or nearly 10 per cent. The provision for medical services and benefits has increased to $3,527m and the provision for hospital services and benefits have increased to $1,685m. So the people of Australia should have in mind that this free Medicare does not stop at 1.25 per cent; it stops right in the middle of the Government's other tax assessment which, as a comparison, must add another 3 or 4 per cent to the cost of what is declared as free medicine in Australia. So it is a nonsense to suggest, as the honourable member for Chifley did, that giving money will solve all problems. It think it is time that this philosophy of the Government ceased. It is the programs that count, and no amount of money will rectify any of the deep-seated problems unless there is a program to go with it. Another aspect of this legislation concerns taxation. There is a diminution in some rates of tax, particularly at the high levels of income. The tax rates for incomes of between $19,501 and $35,000 have been reduced from 43c and 46c to 40c and the rate for incomes of $35,000 and over has been reduced from 55c to 49c. At the time these changes were made-and I had a feeling that the Treasurer had this in his mind when the election was called for 11 July-there was to be one pay packet in the hands of ordinary Australians that would reflect a decrease in the rate of taxation. How disappointed those people on incomes of less than $19,500-that is a little below average yearly earnings-must have been when they found that there was no decrease at all and when in fact with the Medicare levy they found an increase. These people received no benefit whatsoever. The zero tax threshold was not raised and the rates of tax for these people were similar to what they were prior to the end of June; that is, 24c and 29c respectively. In addition to personal income tax rates I want to talk about the company rate of tax which goes to 49c. Again I come back to this matter of imputation. I would say that imputation does have some consideration in increasing the rate from say, 46c. But I point out that although some relief in the area of dividends was also offered by the previous Fraser Government it did not feel that it was necessary to increase the company tax rate. As honourable members will appreciate, the tax rate of 49c now applies not only to company tax but also to the fringe benefits tax. Just to compare the figures, company tax collections will go up by 14.3 per cent this year, from $6,714m to $7,675m. At the same time, fringe benefits tax collections are increasing from $535m to $750m, a 40.1 per cent increase. That is a massive increase in collections from people who do not get the benefit of a tax deduction for that tax within their expenditure; they have to account for it otherwise. If we add that as a proportional rate of company tax on to what they already pay, the real rate is not 49c in the dollar but something like 53c in the dollar. I think this is something that the Government has chosen to hide amongst a lot of the other problems that the Budget will entail. Anyone-the Treasurer or anyone else-who says that the fringe benefits tax has been received and taken on the chin within the business community of Australia ought to look at the figures to see the manner in which some companies have had to dispose of employees. I have seen that actually happen with one of the companies in Mackay. Because of the additional imposition of the fringe benefits tax some of the staff of that company had to be dismissed because it could not bear the price of that particular labour under those circumstances. So the fringe benefits tax has also been a real contributor to the unemployment situation in Australia. In talking about the rates of taxation, I want to deal with a particular aspect that is not dealt with in this legislation and has not been dealt with in any legislation in the 4 1/2 years of this Government. The members of the Government are quite keen to talk about the rorts and the people who have been tampering with the system and indulging in avoidance or evasion. They say that this piece of legislation or that piece of legislation is meant to improve the situation. Yet one of the rorts within the system is allowed to go unchecked. I refer specifically to section 23 (f) of the Income Tax Assessment Act, which states: The income of a trade union and the income of an association of employers or employees registered under any Act or State Act, or under any law in force in a Territory being part of Australia relating to the settlement of industrial disputes; That income is exempt from taxation. This is allowed to go on. I remember reading in an article in the Bulletin less than six months ago that the income from interest on investments of 10 unions was calculated to be about $100m. I understand that there are about 350 registered unions in Australia. They are certainly not all as big as the 10 referred to in the article. People talk about the aggregate amount of tax that is lost and complain that employers and businesses of Australia are rorting the system, but they should ask why unions are not treated in a similar way to the businesses for whom their members work. This is a massive rort that I believe should be corrected. It is a rort that is being practised at the same time as many non-profit organisations around Australia are receiving letters from the Commissioner of Taxation asking why they have not lodged returns or paid tax in regard to the non-exempt part of their income, namely, the interest on investments. That is a double standard. The Act is quite clear in that regard. If the Government suggests that an association of employers stands to gain, I would like to know how many associations of employers around Australia have investments of a similar nature to those of unions and receive interest on them of the kind indicated by the article in the Bulletin. We hear about amendments to taxation law and the greatest reform in taxation for the last 35 years. I have with me a copy of the Income Tax Assessment Act, which was reprinted as at 31 December 1985. This volume contains 1,522 pages. I do not know how anybody can say that that represents a simplification or an improvement of the Act. Incidentally, that does not include the fringe benefits tax provisions, which are also massive. The legislation that we are now debating is increasing the amount of taxation law by a further 29 pages. The Government must understand that there must be a simpler system for the collection of taxation than the one that it is adopting. Basically, the high rates of tax, particularly company tax rates and other rates, mean that a person earning income in Australia tries to seek any solution he can-preferably an honourable one. To add additional provisions to the Income Tax Assessment Act and to try to stamp out the problems in that way is not the way to go. We need a simpler system. We need a system that provides encouragement and an incentive for people to earn money, instead of falling out of the income-producing area and into the social welfare or some other net. If they do not make efforts to earn money, the Government has to pick up the tab. I believe that the proposed imputation system is probably an improvement, but there are still some problems. For instance, I understand that unappropriated profits prior to 30 June 1987 on which income tax has been paid on a company basis by the corporations concerned will, on a distribution after 1 July or a distribution in liquidation, become taxable in full despite having been taxed previously by the government of the day. So there will not be any relief on imputation. The Australian Taxation Office will have its hand in the till when a company goes into liquidation. I also raise a question in regard to capital gains tax. It was indicated to me recently that the transfer of a 30-year crown lease, even to a similar one, is subject to capital gains tax even though improvements by the owner to the old lease might go back quite a few years. Even acquiring a new lease for the same land makes that land and perhaps all the improvements thereon subject to capital gain. Perhaps the Minister at the table, the Minister for Employment Services and Youth Affairs (Mr Holding), would tell me whether that is correct, or whether it is an unintended consequence of the capital gains legislation and the Government would prefer to do something about it by other means. I could mention quite a few things in regard to this legislation, but I might just mention again provisional tax. I know that provisional tax puts the business taxpayer into basically the same situation as the pay as you earn taxpayer, as businesses have to make quarterly payments, but it does offend me that when the Budget predicts an inflation rate of about 6 per cent, provisional tax will be based on an 11 per cent increase on the previous year's income. One wonders, following the fall of the stock exchange over the last two days and with the quarterly payment coming up, just how business people will react. They have to try to provide a proper estimate of their income for both capital gains and income tax purposes, and under section 221ydb (1) of the Act if there is a 10 per cent error and one's provisional tax assessment has to be revised, there is a 20 per cent penalty. I find that to be quite horrific. The Australian Taxation Office is unwilling to listen always to proper reason, and it is very difficult for an individual to assess in such a volatile market his income for the coming year with an error rate of no more than 10 per cent-and all this while he is being taxed on an 11 per cent increase on his business in the previous year while a 6 per cent inflation rate obtains. There are many things we could talk about-- Mr Peter Fisher —Keep going. Mr BRAITHWAITE —I cannot. I do believe the Government has to answer questions in many areas, and I particularly ask the Minister to answer the two questions I have raised-my query about leases and capital gains, and why it is that the Government endeavours to keep exempting union income from taxation. Mr O'KEEFE(Burke)(9.12) —I thought for one moment late in the contribution of the honourable member for Dawson (Mr Braithwaite) that we might finally have reached some agreement in this House. I thought what he said was the same as I was going to say, but I discover now that we are really talking about different things although using the same words. He has highlighted one important aspect by demonstrating that all this taxation legislation should be made more simple. The Taxation Laws Amendment Bill (No. 3) is what I call a `here we go again' Bill, because it contains a number of measures that are really designed to close off more loopholes and tidy up avenues for circumventing the legislation which have been found by those who specialise in these things since the introduction of our tax reform package. So when I think in terms of a simplification of the tax legislation, what I am really admitting is that it is almost impossible for draft legislation to cater for all circumstances. We do need the co-operation of the community to ensure that it follows the spirit of our legislation, and the tax avoidance and minimisation industry ought to take notice of this. The Government cannot be expected to keep on closing loopholes while an industry goes on finding new ones. I guess I am really saying that I think the Government ought to be looking at dismantling the Income Tax Assessment Act and setting in place a new set of principles-principles which I can assure the House would give the honourable member for Dawson apoplexy. At the moment our tax law is out there on the table. The high fliers are looking through it with a microscope for every potential loophole. I think we ought to be looking at moving powers of specific definition to the Commissioner of Taxation and establishing a set of guidelines for him to follow, and then have the industry come to the Tax Commissioner to find out how he would propose to treat their schemes before they are implemented. In other words, if they are not going to back off and stop this caper of continually finding and exploiting loopholes in every piece of legislation brought into Parliament, perhaps we should make them get permission from the Tax Commissioner before they start. There is a lot to be said for that approach. In this amending legislation, there are attempts by the Government to be fair about the application of the capital gains tax, and I applaud that. When I look to the other aspects of the legislation, which includes reference to all these loopholes that we are attempting to close, I seriously question whether it is worth following that approach any more. My colleagues the honourable member for Macarthur (Mr Martin) and the honourable member for Chifley (Mr Price) have already focused very well on what I would describe as the pathetic contribution of those on the other side of the House, not only during this debate but continually in Question Time. There is no substance, and no understanding of the principle of fairness and equity. They simply come into the House, rowing the boats of the vested interest groups that they represent: we heard again tonight the call for less tax for those in the best position to pay. What has to be understood about the tax cuts that are embodied in the Income Tax Amendment Bill (No. 2) is that they represent the final stage of what has been a very bitter fight in Australia to get a fairer tax system for all Australians. Our wage and salary earners have been paying income tax rates among the highest in the world, while others have been avoiding their fair share. Mr Robert Brown —Hear, hear! Mr O'KEEFE —My colleague the honourable member for Charlton, who is in total agreement with what I am saying, will, I am sure, elucidate more on this matter in his contribution. Let it not be forgotten that these tax cuts are being paid for by a clamping down on business lunches and fringe benefits ripoffs, as well as by the money raised from capital gains tax. It cannot be reiterated too often that every dollar that has been raised under these taxes has been directed back to wage and salary earners via tax cuts in their pay packets-something which this Government stands proudly behind. Let us in this debate look also at the Medicare Levy Amendment Bill. At the heart of the recent Federal election was the question of the continuation of Medicare. In December 1975, when government in Australia changed hands, the first act of those on the other side of the House was to dismantle Medibank, as it was called in those days, despite an unequivocal promise to the Australian public that it would not be dismantled. That was done to cater for the whims and fancies of the medical practitioners and specialists who ripped the system off, made big dollars out of it, used all the negative gearing provisions and the whole box and dice and now want to return to that private health system which gave them free slather. During the recent election campaign, we had what I regard as a last ditch attempt in Australia to return to those good old days for that group. It is just not on. Medicare is here to stay. This legislation actually increases the income threshold from which people will pay. In other words, more low income people have been excluded from paying the Medicare levy, and that is typical of this Government's approach. It ought to be said that this approach to families and Medicare is the overall thrust of this tax reform and the Budget undertakings. In looking at the welfare of ordinary Australians and issues such as the health system, I see in my electorate developments such as the Broadmeadows Community Health Centre, with its use of salaried doctors and its provision of fee for service, using the Medicare system. Bulk billing is working beautifully and is widely and well accepted in the community and by the medical practitioners who use the system, and I commend them for it. In central Victoria the Cobaw program is developing in conjunction with the home and community care program to help particularly our elderly people to stay in their homes and be catered for within the local community. This is all being funded under a budget approach that is working and has at its heart the principles of fairness and equity for ordinary people. I will divert to give a personal example. In my home town of Heathcote are a couple of lovely people, Mr and Mrs Nicol. Recently Molly Nicol had an operation. Mr Martin —Is she all right? Mr O'KEEFE —She is okay but she has to go back into hospital for another operation, which is unfortunate. They are a couple of ordinary retired people who have worked hard. Mrs Nicol is getting the best care and attention that our hospital system can provide under Medicare. Yet those on the other side complain about waiting lists and the conditions for consulting physicians when ordinary people who deserve the best care and attention that our system can provide are prepared to wait and also support this system. Mr and Mrs Nicol are very strong supporters of Medicare and want to see it stay. Mr Robert Brown —And the Labor Party as a result. Mr O'KEEFE —And the Labor Party, the Labor Government, as my colleague interjects. I turn just briefly to the family package because the arrangements that are outlined in the tax amendment Bills are addressing the fundamental principles of redistribution which incorporate very substantial payments for low income families with children. I urge the 1,500-odd families in my electorate who will benefit from the family package to ensure that they get their applications in and start planning now for the best way to apply the increases of between $50 and $70 a week which will be given to ordinary families. Families should start planning a budgeting program now to consolidate debts or to start a savings scheme towards bridging the home loan gap. I hope that many women in families will have the opportunity to use a little of the family package money to enrol in a course for personal development, word processing, or in some other area, in, say, a technical and further education college which would gear them up for returning to the work force. Education is a key way of ensuring the longer term future of their families, and that is what we are trying to provide for them. I again reiterate that all of these provisions have been made possible by the determination of this Government to press ahead with a very major tax reform, a number of components of which are incorporated in these Bills. Despite calls from the Opposition, we will not be backing away from the capital gains tax, we will not be backing away from the fringe benefits tax and we will not be backing away from crackdowns on those who have been using every possible device to minimise their tax. I think that is something to be applauded. Finally, I will say something about wealth because there has been some debate about it in the community in recent weeks. We really have to look at what is happening in the community that is focusing attention on this matter. Many are using the term `conspicuous consumption'. I can take honourable members to places in my electorate where, only two kilometres apart, are some of the wealthiest and some of the poorest areas of Melbourne. They can see for themselves, in very direct comparison, the conspicuous consumption that now exists in our community. In 1983, when the prices and incomes accord was established, the Government at the time asked those in the business sector not to take short term profits off the top to use the profits that we were injecting into the system via wage discounting and the approach taken by the Government and trade unions to achieve a resurgence of Australian industry. We pleaded with those people not to cream the profits off the top but to churn the money back into their businesses, to reduce their business debt and to get into productive investment to better place us in the world market so that we could see what was needed. What has happened is that $9 billion of extra profit has been created in this country and very little has turned up yet in either reduced debt or in investment in productive enterprise. It has been creamed off the top and it is reflected in conspicuous consumption. So we have to look at this problem. I believe these are the frustrations that the ordinary person in the community is experiencing. That is why the ordinary person is saying, `What has been going on? Why is all this happening while I am taking the bite? I am pulling in my belt; why aren't they?'. The politics of envy is being created in our community by the people who are not prepared to play the game fairly. I received some information today which I guess was not surprising, but it is disappointing. I understand that one person who features very highly in the top 200 of the Business Review Weekly is a leading light in the Liberal Party of Australia; in fact, he may even be its new Federal President. Mr Robert Brown —Can I guess? Mr O'KEEFE —Yes, the honourable member might be able to guess who it is. He is on a quoted salary of hundreds of thousands of dollars. I have it on very good information that his personal tax contribution to the system this year was $950. Mr Martin —How much? Mr O'KEEFE —A sum of $950. If that is true, those who represent these sorts of people stand condemned in this society as far as I am concerned. Honourable members opposite look a little surprised. Let me tell them that not all the leaks in Australia are against the Government. The fact of life is that these people are around the place all the time bleating that we need to provide incentivation and something to work for. I will tell honourable members what we need to do. The only way we can get them rolling in Australia is to write out a government guaranteed cheque for profit-no sort of entrepreneurial burst, but a government guaranteed cheque for profit. Then they might actually do something about creating something productive. These are the people who continually dud our tax system with takeover write-offs. They race off-shore and borrow foreign capital. The minute the Government gets a bit tough, what do they do? They threaten to take their money overseas and invest it elsewhere. They are real good Aussie made stuff. In my view we have reached the point in Australia where we ought to be reforming the tax system or taking a new approach to tax. I do not think that coming into this Parliament month after month with page after page of legislation to close off loopholes is the approach. I think we ought to be looking at a new approach which hands a lot more power of definition and a lot more power of determination to the Commissioner of Taxation. As a member of the Government, I am prepared to wear the responsibility. If the Tax Commissioner turns into a Hitler for the business society, I will wear the responsibility for that. But, by gee, I am not going to stand here and watch certain members of our community continue to sit with their microscopes finding loophole after loophole, working out ways to continually dud the tax system at the expense of the ordinary person and making zillions of dollars doing it. I was explaining to one of my colleagues at dinner tonight that I had outlined to me last weekend the latest device for getting around bankruptcy and negative gearing. I was given the example of a $6m property investment consisting of three $2m lots tied together. One property is able to be declared bankrupt and immediately becomes a write-off against the whole system. Such activity is taking place out there. It is going on all the time and it is being funded by the ordinary taxpayer. Mrs Darling —It's not on. Mr O'KEEFE —As the honourable member for Lilley says, it is just not on any longer. I support this legislation, but I do think the honourable member for Dawson was right when he called for a reform of the Income Tax Assessment Act. Although he was using the same words as I have used, I do not think he had quite the same intention. There needs to be a simplification of taxation legislation. We need an approach of putting it all on the table and looking at it before we allow it to be enforced in the community because it is just not working. If we need a wealth inquiry to outline the sorts of things that are going on, so be it. Given that, I am happy to let my contribution rest there. Dr WOODS(Lowe)(9.30) —`I now give this understanding-that for the term of our next Government the Medicare levy will not be increased'. I do not need to remind the House that these are the words of the Prime Minister (Mr Hawke) in his policy speech from the 1984 election. To any normal human being the presence of the Medicare Levy Amendment Bill before us tonight would represent a broken promise-No. 31, or is it No. 41-- Mr Sharp —One hundred and forty-one. Dr WOODS —Perhaps it is No. 141. But this is not the case with our beloved leader, Mr Forty-Nine Per Cent, whose popularity must have been listed on Wall Street judging by the way it is in free-fall. Let us examine this Medicare levy. Let us see whether Australian Labor Party rhetoric matches the facts. What does the levy produce? The answer is about $2 billion of taxpayers' money. Whatever it may be called, the levy is an extra tax from this Hawke-Keating Government with its record taxation levels. The Medicare system is so inefficient and so cost ineffective that the levy, contrary to Labor's initial promises, does not even begin to match the pretence that it will pay for our health care system. The reality is that in 1986-87 health care cost the Government $5.8 billion over and above the income from the Medicare levy and in 1987-88 it will cost a projected $6.2 billion over and above the income from that levy. Honourable members might think that this is a good reason for increasing the levy and other taxation on the people of Australia in order to pay for their health care. The problem is, of course, that under this Government this has already happened. None of us would begrudge paying extra for an improved health care system, but what have we got? We have an apology for a health care system. We have a Claytons system-the health care one has when one does not have health care. The delivery of an effective health system is a primary and indeed a major responsibility of government. It is a major challenge to all three spheres of government-Federal, State and local. The very basics of our health system lie in good drains and sewers, clean water supplies, unpolluted air, sensible food and drug laws and sufficient green belts and forests to provide the primary lungs for our cities and towns. Those considerations should lie foremost in the creation by governments and community groups of a positive attitude in individuals towards the maintenance of good health. A health system must never see itself essentially as a wholly or even predominantly remedial or palliative system. Good health must be the norm to strive for and to maintain, and preventative medicine must be the starting point. This does not just mean good environments and immunisation programs; it means the education of everyone in the principles of sustained good health. The Hawke Labor Government has been in office for 4 1/2 terrible years. During those years there have been Labor governments in four of the six States. Thus, both in its direct Commonwealth policies and in its specific grants and influence through the Commonwealth-State Health Ministers Council, the Hawke Government has had a full opportunity to shape an overall health policy throughout Australia according to its own concepts. It must take full responsibility for the result. It cannot blame anyone else. It has had more than ample time and resources to put its clear imprint on Australia's health programs. The result has been disastrous. Year by year, throughout the Government's whole term in office, both the quality and the quantity of health care have seriously declined. The Minister for Health in my own State of New South Wales tells us that the problems are the Commonwealth's and he disclaims responsibility for the pitiful state of our health care system. We have buck passing here of enormous dimensions. Let us look at the situation. In 1982-83 the Federal contribution to State health costs was $1,449m. In 1986-87 the contribution totalled $2,770m, an increase of 91 per cent. Perhaps it is just that New South Wales misses out on the Commonwealth moneys. Let us look at New South Wales in particular. In 1982-83 the total outlay for New South Wales was $488m. In 1986-87 it was $1,069m, an increase of 119 per cent. It just so happens, by coincidence of course, that that was the period of the operation of Medicare. Under Medicare, these costs have gone up almost twice. I ask honourable members whether the quality of health care has gone up anything like the same amount. I see that Government members cannot keep a straight face; they are sniggering. The Labor Party does not even have the decency to pretend that it cares about health care quality. It cares only about ideology, socialising medicine, reducing it to its lowest common denominator-- Mr Price —Mr Deputy Speaker, I raise a point of order. You would have observed, as I did, that no Government member was sniggering when it was suggested that we were sniggering. Mr DEPUTY SPEAKER(Mr Blanchard) —Order! There is no point of order. I call the honourable member for Lowe. Dr WOODS —The Labor Party cares only about ideology, socialising medicine, reducing it to its lowest common denominator, increasing government control and, of course, increasing the costs. Who cares about the quality of the service? Who cares about the poor? Who cares about the disadvantaged? Not this Labor Party. The poor and disadvantaged under this Labor Party should be grateful even to have any service, or at least that is what the Labor Party implies. Why is it that this often pragmatic Government does not exercise its pragmatism in this regard? Why does it maintain its ideology at the expense of the sick? After all, its other policies have gone by the board. I seem to remember some sort of pragmatic policy about uranium mining. I give up; I do not know the answer. Since Medicare costs have increased almost 100 per cent in terms of health contributions to the States, one would expect that the money would result in a better system, so much better that nobody would pay to be privately insured. Why should they pay for something they can get for free? But no, Australians are voting with their feet. They are marching straight into the private health insurance offices in every State. With the exception of Queensland, more than 50 per cent of the population in each State has taken out private insurance. Why is that if the Government's Medicare system is so good? Let us go back to May, to those halcyon days before the Prime Minister realised the problems that we poor card subjects were facing. Honourable members will remember that it was months before we became individuals again and could breath the clean fresh air of freedom, rescued from the threat of the identity card. We were in big trouble then, of course. We had not found the Argentinean road; we were just an ordinary banana republic. Those were the days of the so-called mini-Budget. What happened is what happens every time this Government does anything-it took more from our pockets and it gave us less. Firstly, the rebate to privately insured in-patients was reduced from 85 to 75 per cent. Perhaps even more significantly, the maximum gap of $20, which the Government had promised it would retain, was removed. Not satisfied with that, it also savagely attacked the services. Now, if one has a simple wart or pre-cancerous keratosis, one cannot get it removed by a plastic surgeon or even a general practitioner (GP) specialising in this. This procedure just qualifies as an ordinary GP consult. This may be okay if a person has a face as wrinkled as most of us, but what if a person happens to be an 18-year-old girl? According to the Government, she does not need the best of care, any old care will do and she does not need to worry about a few scars on her face. It is bad enough if a person gets sick from nine to five, but heaven help him if he gets sick after hours, because this Government has removed the loading paid to doctors to work outside normal hours. I understand that bulk billing was causing a problem and that the system was being misused, but if the system is being misused one fixes the system. One does not create another problem and destroy health care for the needy people who happen to be inconsiderate enough to get sick after hours. This Government has reduced health services to an embarrassingly low level. It has reduced rebates. For example, if a person has a few skin cancers removed, which is very common in this country, the Australian Medical Association (AMA) fee is $230. The Medicare rebate now, after the May changes, is $138. The gap is $92. Should a person happen to need something major like a coronary artery bypass graft, he had better have a friendly bank manager because he will face an enormous bill at the end of it. The doctor's fee alone, if he follows proposed AMA guidelines, will be $1,680, but the rebate will be only $952. The patient will have to find $728 for the doctor's fee alone. Should a person be lucky enough to find somewhere to get a hip replaced-and frankly, he has more chance of winning a lottery-he will have to find the gap between the proposed AMA fee and the rebate of $538. One must remember that hip replacements usually occur in the age group whose financial needs are greater, the poorer end of the population, the 60-plus group. Should a woman have that terrible disease, pregnancy, she will get back $307 from a fee of $655, a gap of $348-less than half. And that is assuming that there are no complications. Should a person feel the need, as I am sure some Government members do, to have a frontal lobotomy, a type of brain surgery for the mentally disturbed, the rebate will be $390 of a fee of $880-a gap of $490. The rebate for a cataract removal, another disease of the elderly, is only $337 of a fee of $1,035-a gap of $998. The rebate is only 32.5 per cent of the proposed fee. Oh for those glorious days when the maximum gap was $20! Under this Government one cannot fully insure oneself to cover the costs of being sick. It is unacceptable to the Minister for Community Services and Health (Dr Blewett). Never mind the hardship. What are these changes going to cost? They will save $116m each year, according to our Minister for Community Services and Health. Let me explain what those savings are. We are talking about $116m extra in taxation, paid not by the whole population-that would be bad enough-but by those who can least afford it, the sick. Sure, it is covered by health insurance, but who pays for the health insurance premiums? One pays more and gets less. There is no doubt that we pay more, but do we get less? Let us look at the level of care offered. I have already pointed out that one dares not get sick after hours, but if one does get sick at least one can be assured of the very best care; or can one? Not under this Government which does not, for example, believe in the best care from the experts available, the medical consultants. One can visit them three times but then one is obliged either to visit a non-expert or to pay through the nose for an expert because of a reduction in the rebate. That is okay if one is rich but not if one is poor. It is another example of a two-tier system of health care. What are the costs? After the third visit to a consultant, the schedule fee remains the same, that is, $43.50, but instead of getting a rebate of $37, one gets a rebate which can be as low as $18.75. Sure, one visit is not going to wipe out one's savings but if one needs regular care, if one is chronically sick, with each visit costing $24.75-that is assuming one just gets charged the Medicare fee-one will soon need to take out a loan to stay healthy. So, after three visits it is back to one's local GP. Many GPs are superb physicians, well able to cope with most medical problems, but to deny expert care in many situations can certainly be life threatening. In my own specialty of cancer medicine, many of the drugs used would not have been heard of by many GPs, let alone the problems of using them. So what the Minister is really saying is that if one has a cancer which needs drug treatment one can get that from a doctor who does not even know the names of the drugs, let alone the first thing about the treatment. There are many other similar examples of caring for the chronically sick. That is the problem. The Government, with its typical bully boy tactics, picks on the weaker members of our society. The ideal is a blend of specialist care and family GP care, but that is not possible with this Minister-unless one happens to be rich, of course. If one is poor one is likely to have to wait not only for elective surgery but also possibly for some life-threatening problems. For example, again using the instance of my specialty of cancer medicine, patients with cancer awaiting urgent chemotherapy are still at present having to wait to be admitted to hospital to receive that therapy with consequent risks to their chances of cure. This is an area in which in New South Wales we have lies, damned lies and Mr Anderson's statistics. Mr Anderson claims that there are minimal waiting lists. At one stage he even claimed that there were no waiting lists. Clearly, there is distortion here to the nth degree. If one has a hip which needs replacing and one knows, for example, that Westmead Hospital in the west of Sydney replaces only three hips a year, quite clearly one does not put oneself on a waiting list for Westmead Hospital unless one has rocks in one's head. The statistics, of course, will not show any long waiting lists. Obviously one will enhance one's chances of having surgery if one is privately insured. Despite this, and despite Mr Anderson's claims, it was today revealed that not only are there long waiting lists but also at one hospital, St George in Sydney, 13 people have died while on the waiting list for admission. The average waiting list for surgery alone at St George Hospital was 936 patients. Three hundred and forty-four patients have waited more than 12 months. Either Mr Anderson was incompetent or he lied. In either case he misled Parliament and should resign immediately. With all these waiting lists we have a major problem. How can we resolve it? At this very moment there are over 9,000 private hospital beds which are unused. If they were utilised properly the problem could be solved at a single stroke. Why can this Government not put compassion above ideology and allow Medicare patients access to these beds? Why is Medicare so expensive? There are many reasons: the basic inefficiency of the system, the lack of any incentive to cut costs and prevent overservicing and the cost of the salaries for the increased number of staff required. For example, during the 12 months following the setting up of Medicare the number of staff employed by the Health Insurance Commission, not including temporary staff, rose from 1,863 to 4,346-2,483 extra staff. Just think what an impact 2,483 extra nurses would have had on our health system. There is some fat in the system-fat which needs to be trimmed; fat which is encouraged by the bureaucracy of Medicare. For example, again in New South Wales, the number of administrators employed by the Department of Health and public hospitals in 1987 is 8,676. Just for comparison, the number of full time doctors employed is only 3,471. The implication is that it takes 2 1/2 times more administrators than doctors to offer good health care. I do not know why we cannot put our money where it will help the sick and the needy. But no, this Government pushes ahead with its socialist ideology and ignores the sensible, worthwhile options. The worst feature of all has been the Government's abject failure to maintain the principle of a universal scheme, applicable to all Australians, regardless of their financial position. It has effectively destroyed the principle of universality. It has created two classes of Australians: the first class, the people who are well-off financially, who have immediate open access to private hospitals and unlimited capacity to receive long term specialist care; and the second class, all those on pensions, fixed incomes and low wages who cannot readily afford private health insurance and cannot afford the extra financial burden of continuous specialist care, a burden recently inflicted on them by restrictive government policies. These are the second class citizens and they are compelled to wait in queues for elective surgery at public hospitals for two years or more. In a civilised community and particularly in an advanced industrial democracy, the health of individuals should never be forced to depend on the size of the pocket or purse. While no health scheme can ever be open ended, it is vital that the basics of health care and delivery should be available to everyone equally and without significant delays. Labor's failure is psychologically as well as physically damaging; it fails to maintain and respect the dignity of the individual. When at its best, the practice of medicine is both a science and an art. Practised solely and predominantly in a clinical scientific approach, it can be dehumanised, soulless and very limited in its horizons. Good health and medication cannot simply come from the pill and scalpel. The human factor remains imperative. The ill person needs to be assured that he or she will be treated with respect and understanding and that the standard of delivery of medicine is high. Reassurance, the preservation of dignity and confidentiality, the uplifting of self-esteem and genuine interest in the individual and family groups-these are often much more important than just the prescriptions. But it is not sufficient for the doctor-patient relationship to be well developed. The intervention of government within that relationship has given rise to new problems, attitudes and stresses. It is a tragedy within the community, and a failure of government, for the aged and the infirm to come to determine by hard experience that they are regarded as second class citizens entitled to second class health services. We cannot leave our poor and underprivileged without good health care any longer. It is more than an optional extra; it is their right. Mr ROBERT BROWN(Charlton)(9.48) —I have just heard quite a strange contribution to this debate. The honourable member for Lowe (Dr Woods) undoubtedly is a surgeon of high public standing. I was quite surprised not only at some of the expressions he used but also at the way he presented the general case. It was quite a savage onslaught against Medicare, a national and universal health system following the introduction of a similar scheme in the early 1970s, again on that occasion by a Labor government. That system was universally applauded. People knew that without a universal health scheme of that kind there would continue to be many people who, for any number of reasons, would find it difficult or impossible to get any type of health care, and not the first class health care, for example, to which the honourable member for Lowe referred. In 1975, in the light of an election which was coming about, a very firm undertaking was given by the Leader of the Liberal Party of Australia on that occasion, who subsequently became the Australian Prime Minister, that Medibank would be maintained. After a few major surgical operations on Medibank, it ceased to exist. It ceased to exist until the end of the period of government of the conservative coalition. I remind everyone that as a result, in March 1983, when the Australian people decided that after seven disastrous years of the Fraser-Howard Government they would change the Government, there were almost three million people-almost one person in every five-not covered by any type of medical insurance at all. It has been suggested that there were some people who chose not to be covered by health insurance for reasons other than the fact that they were too poor to afford it. But the reality is that the vast majority of those people were not covered because they were unable to afford it. I suppose there are plenty of examples throughout Australia where growing children continue to carry the scars and the disabilities associated with ailments that they had at that time which their parents, because they were poor, were unable to do anything about. One example-I will not go into the details-is a child in my electorate who will carry a disability for the rest of his life as a result of the fact that at that time his parents were unable to afford health insurance and were too proud to do anything about it. Then we have the statements that have just been made by the previous speaker, the honourable member for Lowe. He referred to the fact that people are increasingly taking out private health insurance. He said that they are voting on this question with their feet. I am surprised that a person from the medical profession would not be sufficiently honest at least to acknowledge the fact that one of the main reasons why people increasingly are going into private health insurance is the intimidatory attitude adopted by doctors. They tell people that if they are covered by private insurance and if they will go into a private hospital, the doctors can operate almost immediately, but if they are going to wait to go into a public hospital, it will not be possible for the doctors to carry out the operation. Dr Woods —It is not the doctors' fault. Mr ROBERT BROWN —The honourable member cannot interject from back there, by the way. He should learn the Standing Orders. He has to occupy his seat. Even if he is sitting in his seat, he is not allowed to interject. Mr Carlton —Come on; you are not in school now. Mr ROBERT BROWN —The honourable member needs to return there. Mr Carlton —I am waiting for your standard speech. Have you forgotten your standard speech now that you have moved your place? Mr ROBERT BROWN —No. I will come on to my standard speech shortly. If I do, the honourable member might be wearing an embarrassed look as a result, because he knows some of the things that might be included in it. So he should not provoke me to go on to that standard speech to which he refers. I know the one he means. (Quorum formed) For about 10 years it was my privilege to know the former member for Lowe. Mr Chynoweth —What a great member he was. Mr ROBERT BROWN —An outstanding member not only of the State Parliament but also of this Parliament. He is a man of great talent, great dedication, great commitment and great compassion. Mr O'Keefe —He will return. Mr ROBERT BROWN —Indeed, he will return. The people in Lowe will vote not with their feet but with the pencil on the next occasion. I do not know whether very many people had the opportunity to hear that earlier contribution to which I have already made reference, but I know that Mr Shepherd, the new President of the Australian Medical Association, is on record as saying that he will crush and destroy Medicare. We know, of course, that he has many allies-people who misrepresent Medicare and, incidentally, people who have made the claim that those poor people out in the community for whom they have so much compassion can get out of the surgery if they cannot pay the bill. Mr O'Neil —Greed before need. Mr ROBERT BROWN —As my colleague the honourable member for Grey has said, it is greed before need: if they cannot pay the bill, they can get out of the surgery. Increasingly, of course, that is happening throughout Australia. Particular reference was made to the position of consultant physicians. I hope I am not oversimplifying this, but I think all honourable members know that in general there are three levels of medical care available to people in the community. First of all, we have the consultant physicians, then we have the specialist physicians and then we have the general practitioners. The purpose of being referred to a consultant physician is precisely for consultation and an expert opinion about the particular medical ailment that that patient happens to be suffering from. Having received that expert opinion, it was usual practice for those people either to be referred to the specialist physician or, if that is not necessary, to go back to the general practitioner. What has happened? In many cases-not all cases, because many of these people are talented and honourable people-increasingly, and these consultant physicians were adopting the role of a general practitioner with continuing visits by these patients. Alternatively, they were adopting the role of a specialist physician for services which would have brought in a schedule fee of about $15 if they had been provided by a general practitioner and which, if they were being provided by the specialist physician, would have brought in a schedule fee of about $24. As a result of the fact that they were classified as consultant physicians and continued to claim as consultant physicians, they were getting between $40 and $45 per visit. Then, when their patients were in hospital, many of these honourable men would visit them daily, despite the fact that it was not necessary. They would say, `Yes, Mrs Jones, and how are you? Let me look at your chart, Mrs Jones. I will take your pulse, Mrs Jones. I will look into your eyes, Mrs Jones'. That would be 45 bucks-and on to the next bed. Mr Dubois —Not on weekends, though. Mr ROBERT BROWN —No, not on weekends, because they were out on the golf course. An increasing number of these consultant physicians-as I said, not all of them; many of them are honourable men and women with great talent-were quite clearly ripping off the system. For these tasks of going along from one bed to another and saying, `Yes, Mrs Jones', and in the consulting room saying, `I have seen you now; make sure you come back next Tuesday, Mrs Jones-- Mr O'Neil —And bring your cheque book. Mr ROBERT BROWN —Yes, they would ask them to bring their cheque book, if they had to pay. But I am talking about this coming out of Medicare. They would say, `Make sure you come back next week' to Mrs Smith, Mrs Jones, Mr Brown, Mrs Turner and all the other people. Of course, the cash registers kept on ticking over. Many of those doctors finished up with an annual income in excess of a quarter of a million dollars-some of them with incomes approaching half a million dollars. Those are the people who are supposed to have all the talent, all the concern and all the compassion. Are these the people who in the future will say to their poor patients, `I am terribly sorry, Mrs Brown. I know that you cannot afford my higher fee, but come back and I will give my service to you gratis.'? Like hell they will! Those doctors will not tell their patients to come back and they will get their services gratis. They will be saying, `Mrs Brown, if you cannot pay the fee, get out of the surgery'. Of course, that has been happening increasingly. We have heard the sort of nonsense that has just been spoken by the new member for Lowe. A lot of people are concerned about the implications of this. I will repeat one point in connection with Medicare. As I have said before, when we came into government in 1983 there were almost three million people in Australia who, as a result of the dismantling, the disintegration, the destruction and the fragmentation of Medibank by the Fraser Government, were not covered by any type of medical insurance. Without going into the details, I referred to the fact that there is a young growing lad in my electorate, and probably others elsewhere right across Australia, who will carry with him for the rest of his life injuries and ailments because his parents were not covered by health insurance, nor did they have the money to go along and pay for those services. Many such parents had too much pride to seek charity. We have changed that. On three occasions the Australian people have endorsed what we have done. Increasingly, the Australian people are starting to identify those people who have been responsible for the attacks on Medicare. The Australian people are not as foolish as those on the Opposition benches seem to think. At one time it may have been possible for Opposition members to frighten the public, mislead them and misrepresent situations in Australia. But that will become less and less the case. A number of amendments in the package of Bills before us relate to taxation provisions. The honourable member for Burke (Mr O'Keefe), who made a great contribution to this debate earlier, referred to a person earning a very high income. He was not sure whether the details were correct, but he referred to a well-known person in Australia who earned a very high income and who paid about $950 in income tax on the very high income that he had earned. Mr Lee —He probably got Austudy too. Mr ROBERT BROWN —Yes, he probably got Austudy for his children because an income that qualified him to pay $950 in tax would probably have been low enough to entitle him to an Austudy allowance for his children. I want to draw attention to the fact that that situation does not apply only to individuals. Let us take, for example, the Vestey company in the United Kingdom which, between 1940 and 1980, paid a total in tax of #26. In 40 years the Vestey company paid #26 tax. In that period, including 1940 to 1945, the Second World War, when the sons of workers in Britain were making the supreme sacrifice in the defence of Britain, companies such as the Vestey company continued to operate and make their profit. That company's contribution during that period of 40 years was about #26. Some of the reasons for this legislation are to put into operation measures announced in the statement by the Treasurer (Mr Keating) in September 1985 concerning reform of the Australian taxation system. That statement was probably one of the most important ever made in this Parliament because it ripped out of the system once and for all a lot of the rorts, ramps and abuses that had been built into and institutionalised in it by our predecessors. It was necessary for us to tear them out. As a result of that statement and the policies put into place by it, we have done precisely that. Not only, for example, have we been able to ensure that the contribution people make to taxation from their income will be related to their income and will be appropriate as a proportion of their income; we have also found it possible as a result of the changes that have been introduced to haul back the marginal rates of taxation. Those people on the Opposition benches who claim to belong to low tax parties with low tax policies are the ones who maintained the highest tax rate of 60c in the dollar, and we have been able to reduce the top rate to 49c in the dollar. So now, whenever a person earns an additional dollar of income, irrespective of that person's level of income, he or she will keep at least 50c out of that extra dollar. We no longer have the situation that existed before, when the Liberal and National parties would rip off 60c in the dollar from those people, leaving them with 40c in the dollar. There is no question about which party and which government has been responsible for the most significant and far-reaching adjustments in the Australian taxation system to ensure that the system would operate with equity, that people would make a fair contribution and, at the same time, would not be able to misuse, abuse and manipulate the system-to create blatantly artificial systems to get around it-and that the system would treat everyone fairly. Mr DEPUTY SPEAKER(Mr Ruddock) —Order! The honourable member's time has expired. Mr ROCHER(Curtin)(10.08) —We have heard the honourable member for Charlton (Mr Robert Brown) with the same speech he has made over the 4 1/2 years since the Australian Labor Party came to office. Government members choose to use emotive terms because it enables them to apply collective thinking without regard to individual taxpayers. It seems to me to be a crime against the intelligence of Australian people that, in these general terms and by the use of words such as `ramps', `rip-offs' and `rorts', they capture the imagination of at least enough people to enable them to be re-elected, albeit with a lesser primary vote than the combined coalition parties at the last election. Nevertheless, the result is that they are in government. They choose not to address the conditions and provisions in the Taxation Laws Amendment Bill (No. 3), the Income Tax Amendment Bill (No. 2) and the Medicare Levy Amendment Bill before us tonight but to generalise in a collective way, and as I said earlier, so that they may avoid the particular issues in the legislation. I want to address my remarks tonight almost exclusively to the Taxation Laws Amendment Bill (No. 3). It involves in particular changes to sections 46a, 46b, 46e, 108 and 109 of the Income Tax Assessment Act. In my introductory remarks I think it is worth referring to what is involved in the proposed new section 46a. That particular section was originally introduced in 1972. Let met remind the House that when honourable members opposite refer to what has happened over the last 30 years they choose to ignore the three or so years of the Whitlam Government in which they allowed to prevail the things they accuse us of being guilty of. They were unable to change effectively economic management, taxation law and all those things they now accuse the coalition parties of. Perhaps that is why that Government was thrown out of office, but it was only one of the reasons. Section 46a has been amended many times since 1972. There will be three changes which will have some application in the year commencing 1 July 1987 as a result of these Bills before the House tonight. Section 46a comprised 10 pages; now it will be 12 pages of very complex law. That is not unusual these days and, unfortunately, it has implications for professionals in the field, both accountants and lawyers. Section 46a is directed at the stripper who receives the dividend as a consequence of the stripping operation. Part IVa is directed at the person disposing of shares in the company to be stripped, while section 52a is directed at denying deductibility for artificial losses created via dividend strips. While there are many variations, a basic dividend strip comprises, firstly, the purchase of a company which has accumulated profits; secondly, the stripping of accumulated profits via a dividend; and, finally, the sale of a company at a loss, which is tax deductible. As such there are at least three stages in the transaction at which anti-avoidance legislation might be aimed. We in the Opposition have no argument at all against measures designed to forestall contrived tax avoidance schemes. Of some interest to the House is the proposed insertion of a new sub-section 46a (12) (a) which is similar to sub-section 46a (12), but which is expressed in terms of assets acquired after 19 September 1985. Effectively, it permits the Commissioner of Taxation to reduce the amount of dividend available for rebate by the cost base of shares disposed of as well as costs associated with the strip. The drafting is reasonably complex because of the need to cope with shares purchased and sold within 12 months as well as shares subject to capital gains provisions. It should be noted that the overall effect of this will frequently be to tax income currently at the expense of capital losses which will be deductible only against capital gains, that is, a tax flow timing problem will almost certainly ensue, not necessarily in the large company situation but in those effective small companies. That effect is due to the interaction of section 26aaa and the capital gains tax laws. Proposed section 46e is probably of more immediate importance and interest to me. Needless to say, it is drafted in cumbersome terms, and that is a very kind description indeed. It should be observed too that the term `asset' is not the same as that defined generally for `capital gains' in section 160a. So regardless of the debate as to whether cash is an asset for capital gains purposes, it is clearly an asset for the purposes of this proposed new section 46e. The state of affairs with the stock market in Australia makes some reference to section 26aaa important, particularly in terms of the proposed amendments to sections 108 and 109 which involve conferring on the Commissioner of Taxation greater discretionary power. The honourable member for Mitchell (Mr Cadman), who is in the chamber, knows very well that I have had a concern with this matter for many years now, both in government and in opposition. As a result of the granting of another discretionary power, it seems relevant to mention that already, in terms of share trading-- Debate interrupted. Mr DEPUTY SPEAKER(Mr Ruddock) —Order! It being 10.15 p.m., I propose the question: That the House do now adjourn. Mr Humphreys-I require that the question be put forthwith without debate. Question resolved in the negative. Debate resumed. Mr ROCHER —I was about to make the point that already the Australian Taxation Office is signalling its intention to profitise gains made by individuals trading in shares for the first time or people who are not classified as share traders, and to capitalise, perhaps I should say socialise, share traders' losses. Whereas in the past only net gains-that is, the total of profitable transactions over a 12-month period derived after the deduction of total loss transactions-were taxable under section 26aaa of the Income Tax Assessment Act, it is now more than suggested that only the gains of a profitable transaction will be taxed as income. Mr Cadman-It is disgraceful. Mr ROCHER —It is disgraceful because losses that previously it was possible to offset can be claimed against capital gains only in subsequent years. It should be obvious to all that traders in any item or commodity can expect losses in some individual transactions, while chasing an overall and eventual profit. After all, that is the nature of business. The chances of new and casual share traders having assets purchased since September 1985 subject to capital gains tax, to offset against those share trading loss transactions, are very remote indeed. Let me illustrate this by giving a simple, but hypothetical example. For instance a trader who made $20,000 from profitable share deals and a $30,000 loss in identical circumstances will be up for $6,000 income tax. His trading loss, although totalling some $10,000, is increased by $6,000 income tax. He or she will still be up for provisional tax the following year unless the Commissioner of Taxation can be satisfied otherwise. So much for the claim of tax fairness in the Budget Speech of the Treasurer (Mr Keating)-a claim parroted by honourable members opposite time and time again, including the last speaker, the honourable member for Charlton. Somewhere down the track the benefit of any carried forward loss is, of course, diminished as well by the effects of inflation. Even that applies only if the person concerned has a capital gain against which a share trading loss or losses could be offset. Given the wording of capital gains tax law as it now stands, some measures of fairness in this context would be restored if section 26aaa of the Income Tax Assessment Act were repealed, with immediate effect. The profits, or the so-called profits, intended to be taxed are ad- equately snared by capital gains tax provisions. Such a move would forestall the threatened, but nevertheless assumed, discretion residing with the Commissioner which he signals he wants to exercise in a vexatious and, in my opinion, inequitable way. In the meantime, individuals having a flutter in the share market should beware. Those people who have suffered losses in the last week will find that when they come to file their returns or, if not then, when they come to be assessed on their tax returns for the year ending 30 June 1988, they will be in dire trouble because on top of the imposition I have mentioned could well be provisional tax and, maybe, even as a result of ignorance, some penalties. Mr Braithwaite-A shocking situation. Mr ROCHER —It is, indeed. I do not think that it can be overestimated. It is an example of where members of the Australian Labor Party, in their collective attitude to tax legislation, ignore the effects of law on individuals. They ignore equity or they claim, in the most righteous manner, overall benefit to taxpayers in the country. Mr Braithwaite-They do not think of the person at all. Mr ROCHER —The Government does not think of individuals, and that is the point I want to stress. Proposed new section 46e is of special concern in the form it takes in the Bill before us. Broadly, it seeks to deny the inter-corporate dividend rebate to a company when these criteria are met: first, a dividend is paid to a corporate shareholder after 4 June 1987; secondly, the dividend is paid out of an asset revaluation; thirdly, before, at or after the time of revaluation, any person disposes of a share in a company which is `related' to the asset holding company; fourthly, at the time this last-mentioned person disposes of the share, the value of the revalued asset constituted 75 per cent or more of the net worth of the asset holding company; and, fifthly and finally, a company-whether or not the recipient of a dividend-has obtained a capital tax benefit out of the arrangement to revalue the asset and pay the dividend. A capital tax benefit is essentially a situation where, had it not been for the arrangement which these measures seek to attack, a company would have included an amount in its assessable income due to section 26aaa, involving sales within 12 months of purchase, or Part IIIa, the capital gains tax provisions. We have had occasion previously to complain about the ever-increasing practice of legislating by Press release, but in the example before us it is being raised to new and totally unacceptable heights. Whatever the merits-I repeat; whatever the merits-of proposed new section 45e as it is now finally proposed, people have ordered their affairs on the basis of the clearest possible statement of Government intent, a draft Bill for an Act of law. The second version now before the House-remember the first was tabled on 4 June this year-was first available for public scrutiny when introduced in this House on 23 September. Some 16 weeks elapsed before those prepared to order their affairs in a way which complied with the Government's proposed legislation over the period of 5 June to 22 September discovered that they could be in conflict with the provisions of proposed new section 46e of this Bill. Fairness, equity and natural justice demand that proposed new section 46e be effective only from 23 September of this year. Mr Webster-They won't get it from the Government. Mr ROCHER —They will not get it from the Government. That is an example of the collectivist thinking that I have sought to describe already tonight. The changes to the Bill released on 4 June are substantive; they are not simply stylistic or grammatical amendments. It is intrusive to observe some examples of the changes to the earlier Bill in the 23 September model now before the House. The earlier Bill applied only if the shareholder who received the dividend then proceeded to sell his or its shares in the asset holding company. The current Bill applies if the shareholder receiving the dividend or any other person or entity then proceeds to sell his or its shares in the asset holding company or a company `related' to the asset holding company. Another fundamental change to illustrate my point can be found in the fact that the earlier Bill applied only to the disposal of shares after the revaluation of the asset. The Bill under consideration tonight applies to a disposal of shares that occurs before the revaluation of an asset. If that is not a fundamental change, I do not know what is. Apart from these specifics, it needs to be said that the proposed new section has been dramatically widened by the second and therefore the relevant Bill. Regrettably, the only substantial portion of the proposed new section that remains unchanged is the date from which the proposed new section has effect, and that is 4 June 1987. That is both retroactive and retrospective in its application. A further, but no less important, criticism I have of the proposed new section in its present form is that it provides for a blanket approach to the denial of inter-corporate dividend rebates. Under proposed new section 46E, if one of a multiple number of shareholders subsequently sells his or its shares after an asset revaluation dividend has been paid, all the shareholders will be denied the rebate. Accordingly, and without doubt, an injustice is done to those shareholders who will not be selling their shares. They will suffer penalties even though they have not made a sale or have not had the cash benefits from the proceeds of a sale. That is scurrilous legislation. It is taxing people on proceeds that they simply have not realised. I cannot stress too much the inequity which arises. People acted quite properly in respect of the 4 June legislation, which, I emphasise, was in Bill form. It was not just the subject of a Press release, although Press releases had preceded it. People acted on the intentions of this Government which has been re-elected. Basic and fundamental changes are involved and I am sure that the observers and advisers to the Minister who are sitting in the officials area know exactly what I am talking about because this could not have escaped their attention. I hope they drew it to the attention of the Government, but I suspect that they did not. This might be an unduly cynical approach, but it seems to me that successive governments have been confronted with legislation by representatives of Treasury or the Australian Taxation Office which they have not understood. Certainly, many of our Ministers, both on my side and on the other side of the House, have not understood the implications of proposals that have been put before them. Mr Cadman-Keating is too busy preening himself. Mr ROCHER —He is busy preening and he has a lot of overseas duties to perform. Unfortunately, this means that he, like some Ministers who preceded him, does not look at the implications of legislation which is presented to him or, if he does-and I have been generous in giving him and the present Government the benefit of the doubt-he chooses to ignore them. If Ministers have chosen to ignore the implications, they deserve to be condemned for their approach and for their lack of any sense of justice in taxation matters. I might add that the same sort of injustice may be inflicted on some holding companies where the cost of denying the rebate might be borne by people who are not part of any real or perceived abuse. So these people are being roped in because of either a lazy or an uncaring Government inspired by its own message and the assumption that it has created that everyone is perceived to be a tax cheat before the fact. Everyone is being regarded in this way. Indeed, these days, such an assumption applies to pay as you earn taxpayers. In the very near future I would like to have an opportunity to give some very real examples of that. I know that the honourable member for Hotham (Mr Kent)-- Mr Hollis-A good member. Mr ROCHER —A good member-a good libertarian, if not a good liberal. I know that he would understand what I am talking about. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. Debate (on motion by Mr Hollis) adjourned. Motion (by Mr Humphreys) proposed: That the House do now adjourn. Mr WEBSTER(Macquarie)(10.29) —Mr Deputy Speaker, you have no doubt heard that the Government is considering commissioning a wealth study. I personally do not believe that we should undertake such a narrow politically and socially negative study. Instead, I believe that the Government should heed the advice of the Institute of Family Studies and provide it with the resources necessary to undertake a survey of family well-being. I understand that the proposal for a wealth study was costed over three years ago at between $4m and $6m. Compare such an outlay with the $320,000 research budget of the Institute of Family Studies and one will be forced to question the Government's sudden desire to study the poverty which is so extensive in Australia today. If the Government was sincere about providing research and a database to underpin economic and social policy, it could have increased rather than cut the budget of the Institute of Family Studies in this year's Budget. In the United States at the moment a study of the family in all its configurations is being undertaken by the National Institute of Child Health and Human Development. Our own Institute of Family Studies proposes that we undertake a similar study. The problem as the Institute sees it is that none of the surveys it has been able to undertake, with its limited budget, combines in one data set for the same families, information on all aspects of family well-being, standards of living and quality of life. Thus it and the Government cannot tell what combination of factors explains why families are un- stable, not functioning properly or coping with life. It and the Government need information that integrates the three main elements of family well-being-material resources, social supports and personal and social psychological well-being-in one data set, so that comparisons and correlations can be made to test the likely impacts of diverse policies and programs on the family. Over six months ago, before the Government discovered the political value of anti-poverty rhetoric, and before the media discovered the problem of family credit and debt management, Canon Allan Whitham of the Anglican Church's Home Mission Society called on us to give attention to poverty in Australia. He reminded us that 2 1/2 million of our fellow Australians every day have to choose between clothing, food, rent and the light bill, as they cannot afford them all. He first related the significance of marital break-up to the abuse of personal credit, bankruptcy and economic problems in creating poverty. We should realise that what has pushed so many Australian children into poverty is not Mr Alan Bond's lifestyle but that of their own parents. If that is realised, one will realise why a public exploration of the bank accounts of our wealthy citizens will not necessarily help us fight the long term causes of poverty and disadvantage. Canon Whitham did acknowledge wealth disparities. He also, however, referred us to the awful truth that it is average persons in our country who are greedy and avaricious, who had, he said-and I quote: . . . become liars and thieves prepared to take an illegitimate sickie without even considering that to do so would put their finger in everyone else's pockets. Most significantly, he argued the very important point that our national problems are not primarily economic, but spiritual. A wealth study will not address the question of family credit management. It will not address the impact of family law on the number of women and children in poverty. It will not address the value of questions which underlie the national statistics of poverty, neglect of the aged, productivity, and so on. It will not help us understand why different families use their assets so differently. More importantly, it will not help Australians to understand the nature of our common problems and common obligations in dealing with wealth creation, social policy and support for families and individuals who face hardship. It will, instead, encourage division and resentment. The proposal for a broad and multidisciplinary survey of the well-being of the family and the interaction of various policies on the family will go a lot closer in meeting those goals. It will also be much more likely to gain bipartisan support. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. Mr HOLLIS(Throsby)(10.34) —The annual reports for 1986-87 of the Australian Archives and the Advisory Council on Australian Archives were tabled in the House on 8 October. As honourable members will know, I hope, I am a member of the Advisory Council. Recent debates in this House have centred on privacy. I wish to draw the attention of honourable members to the work which the Archives has been doing in the field of information privacy. For 15 years the Archives has been dealing with privacy considerations as they apply to the release of information from Commonwealth government records, more recently under the terms of the Archives Act. Over this period the Archives has built up considerable expertise in this field. This year the Archives has undertaken a thorough examination of the issues involved in protecting the personal affairs of individuals who have had dealings with government. The results are embodied in a substantial paper which has been seen by the Advisory Council on Australian Archives. The Council thought that the paper provided a most useful and professional contribution in this difficult area. I hope to see the paper published before too long. In addition, the Archives has issued new guidelines as they relate to privacy and access to records. These guidelines deal with questions of access when Commonwealth records contain material on such matters as suicide, adoption, immigration, fingerprint records and transcripts of intercepted telephone conversations. The guidelines are publicly available from the Archives access manual. The Archives' last two annual reports have referred to progress in planning and constructing a joint Commonwealth-State records repository in Adelaide. The 1986-87 report indicates that this unique project has now been completed. The facility was officially opened in July of this year by the former Minister for Arts, Heritage and Environment, the honourable member for Robertson (Mr Cohen), together with his State counterpart, the Hon. Barbara Wiese, the South Australian Minister of Local Government. This is a good example of an enterprising approach to solving a problem. By sharing costs and providing certain facilities, servicing arrangements and equipment in common many thousands of dollars have been saved by both governments. The result has been the timely provision of a facility offering services on which both Commonwealth and State departments in South Australia will greatly depend in the efficient conduct of their day by day business. This kind of co-operative endeavour among government records organisations is something which the Australian Archives seeks to encourage wherever possible. I believe the Australian Archives is to be especially commended for its part in seeing this joint project through to completion. In recent years, the Archives has put a lot of effort into helping agencies make efficiency gains in dealing with their records. Taking this a step further, the Archives has prepared and just recently issued a handbook for agencies on how to play a larger and more informed role in the process of deciding which records should be kept and which can be safely destroyed. The approach taken is a self-help one which will make agencies more self-reliant in this important field. Pages 4 and 5 of the Archives' annual report show the lively and informative presentation style adopted. The line of development being taken is in harmony with the Government's philosophy of encouraging devolution within government administration where this can be safely achieved. In conclusion, a word about the need for a high profile public outlet and national headquarters for the Australian Archives in Canberra. Since its inception, the Advisory Council has identified the provision of such a building, proposed by this and previous governments to be located in the parliamentary zone, as a matter of high priority. The provision of such a building is regarded by the Council as crucial to the effective discharge of the responsibilities of the Australian Archives. Such a building is not proposed merely as a monument to the past. The Australian Archives exists to cater for current and future needs in providing a focus for access to government information and records, and it should be able to provide education and extension services on the workings of executive government, in particular, for the community. The concept as developed by the Archives is an exciting one. Provision of this important facility has been delayed for one reason or another for some years. With the completion of the new Parliament House the demand on resources in Canberra will be greatly eased. When that happens, I believe the Government should take a firm decision, and proceed with it, to provide the facility for which the Advisory Council sees such a pressing need. Finally, I would like to compliment in particular Mr Brian Cox, the Director-General, and his very capable staff at the Australian Archives. Mr MILES(Braddon)(10.39) —I want to spend some time tonight talking about unemployment. Often members of the Government talk about equity, fairness and justice and about their concern for people, but in reality over the last three or four years this Government has shown total incompetence in its handling of unemployment in this nation. We sit here day after day and hear the Treasurer (Mr Keating) go on about the record of the Fraser Government. The simple fact is that the Fraser-Howard Government's record on unemployment is 38 per cent better than the record of the present Government. Australia's unemployment record during the Hawke years has been absolutely disgraceful, and that is one of the reasons why there is a great need to look into poverty in this nation. This Government has kept more people in unemployment than any other government in the history of this nation since the Second World War. That is its record on unemployment. I was pleased to sit here and listen to the honourable member for Macquarie (Mr Webster) talk about poverty in this nation. One of the fundamental reasons why we have poverty is the policies of the Hawke Government: it has kept people unemployed, and the time for which people have been unemployed is almost double the time for which they were unemployed at the end of the Fraser years. What is more, the Hawke Government has set in place economic policies that are disastrous for this nation. I want to turn now to something that is of particular interest to me as the shadow Minister for Aboriginal Affairs. In 1977 we set the community development employment project scheme among Aboriginal communities. This is a scheme whereby Aboriginal communities can choose to have people work for their unemployment benefit. It is a lead to the rest of Australia. Some Aboriginal communities had got to such a low ebb in handling their social situations, whether it be through alcoholism, petrol sniffing or other socially degrading situations, that the elders finally said, `Enough is enough and we have to do something about it'. One of the reasons for this, which they traced back to the social dislocation in their communities, was the fact that so many people had time on their hands and excess money. They felt that there was a need for them to do something productive and worth while. The elders took charge of their communities in a very positive way and said to the Government, `Let us pool our unemployment benefits, the people in our community will work and we will then distribute that money'. There are over 50 of those communities in Australia, setting a lead for the rest of the Australian community. I suggest to this Government that it might like to do exactly the same thing in other parts of Australia, that is, to allow municipal councils around Australia to handle the equivalent unemployment benefits which go into their communities to produce productive outcomes. I challenge the Government to take up that initiative and to take the example which the Aboriginal elders in many communities in Australia have given, and allow municipal councils to handle unemployment benefits and have people work for those benefits. It is a challenge which this country should take up, because it would be far better off if the Government were prepared to bite the bullet on this issue and have people work for their government benefits. Mr KENT(Hotham)(10.43) —In 1981, I was a member of a parliamentary delegation to Pakistan and India. On my way to join the delegation, I paid a short visit to Singapore. While there, I visited Parliament House. In the lobby of that building I noticed a portrait of Lee Kuan Yew-depicted by the artist as Leader of the Opposition while making a speech and thumping the table with his fist. I have thought it rather curious that, since Lee Kuan Yew has become the Prime Minister of Singapore, no other member of parliament has had the opportunity to voice his or her dissatisfaction with the Government as freely or vehemently as he did. In fact, shortly there will be no members of the Opposition, since their number has now been reduced to one, casting doubts on the existence of a parliamentary democracy in Singapore. Not only has the parliamentary Opposition been oppressed, but anyone in Singapore today who is even mildly critical of the Government places himself or herself in a position of being locked up and detained indefinitely without charge and without trial. And this is exactly what happened to 22 decent and peace loving young people, most of whom are church and community workers, for their differences of opinion with the dictator. On 21 May and 20 June Vincent Cheng, Executive Secretary of the Catholic Justice and Peace Commission, and 21 others were apprehended and detained under the Internal Security Act. They were imprisoned without trial because they were judged by the authorities as a security threat. Although the 22 church and community workers arrested were accused of involvement in a Marxist plot to overthrow the Government of Singapore, organisations such as Amnesty International have confirmed the view prevalent in the international community, namely, that these people have been imprisoned solely for non-violently exercising their right to freedom of expression and freedom of association, rights which we in Australia and those living in democratic societies everywhere take for granted. While held in detention these young people were not given the opportunity to respond to the accusations made against them. Moreover, whilst in prison they were subjected to prolonged periods of solitary confinement, continuous interrogation under severe psychological pressure by professional teams of interrogators and physical torture. Amnesty International has confirmed that the so-called `confession' made by Vincent Cheng, and broadcast on Singapore television, must also be seen as a result of these interrogation procedures. Six of those originally arrested are still in prison; the remainder have been released. However, their release is conditional. They have been placed on a restriction order, which means that their freedom of movement and freedom of association is restricted and that internal security agents continually monitor their movements and can interrogate them at any time. Their human rights are being violated. It is now time for the international community to insist that both the Internal Security Act, which allows detention without charge or trial, the restriction order and conditions attached to it and other human rights violations perpetrated by the Government of Singapore cease immediately. Consequently, I call upon the Minister for Foreign Affairs and Trade (Mr Hayden) to intervene on behalf of those still detained and those whose movements are restricted because of the legitimate non-violent activities in church and community areas, workers organisations and student groups. It is just not good enough for the Government of Australia or any other concerned government merely to state a concern for human rights violations. Rather, we should express our concern in more concrete ways. We have already demonstrated our strength of opposition to the oppression in South Africa. I propose similar measures to be employed forcefully to put our case to governments which repeatedly violate internationally accepted codes of justice, rights and democracy, especially against such dictatorial regimes in our region. Mr ANDREW(Wakefield)(10.48) —I am prompted to rise in the adjournment debate tonight following remarks made in this House by the honourable member for Dunkley (Mr Chynoweth) on 23 September 1987. I raised the honourable member's comments with him prior to choosing to air them in the House tonight. While I am very aware, as is every honourable member opposite, of the fact that being a shade uncharitable towards members of the Opposition would not be a new experience for the honourable member for Dunkley, I am sure that he did not mean to misrepresent the state of Australia's rural producers when he addressed the House on 23 September. Following remarks by the honourable member for Page (Mr Ian Robinson) about farmers, the honourable member for Dunkley stated: They have come from a state of just about absolute poverty under the last Howard Treasury and have been lifted up from those dire straits through the excellent work of the Minister for Primary Industries and Energy (Mr Kerin). Mr Gear —Very observant. Mr ANDREW —One may think so, but he then went on to say: Farmers are now getting a fair return for the amount of effort they have put into their farms. I would have thought very few, if any, honourable members opposite-this applies particularly to the new member for Hinkler (Mr Courtice)-would be anxious to run around their rural electorates claiming that farmers are now getting a fair deal for the amount of effort they are putting into their farms. Not only was the honourable member for Dunkley ill-informed and therefore offering a less than fair assessment of the position of rural producers on 24 September, but 10 days later the South Australian paper the Advertiser ran a lead article which referred to the State Secretary of the United Farmers and Stockbrokers of South Australia Inc., a Mr Grant Andrews. I hasten to add, lest it should it be claimed that I have a vested interest in this matter, that he is no relation of mine. Honourable members will notice that his name is Andrews. Mr Andrews said that, unless it rains, this will be a disastrous year for South Australian farmers. In fact, he said that on the Eyre Peninsula, Mr Davis Lewis, the district agronomist, had been quoted as claiming that `the situation is already a disaster'. Many farmers are expecting a harvest yield of only 30 per cent to 50 per cent of the average return. Rain was desperately needed and in an atmosphere as dry as that, as every rural producer in this place would know, the State was ripe for a frost and a frost occurred. Following the speech of the honourable member for Dunkley on 23 September and Mr Andrews's plea on the night of 4 October, on 16 October the Advertiser ran another article about what was, in fact, a major frost throughout the south-eastern part of South Australia taking out 11,000 tonnes of prime wine grape production and seriously affecting the cereal crops throughout the south-east. Mr Hollis —You are not blaming us for that, are you? Mr ANDREW —Of course I am not blaming that on the Government, but I am pointing out how ill-advised were the remarks by the honourable member for Dunkley on 23 September. As if that were not enough, this frost was followed by what were expected to be drought breaking rains that were preceded by a massive hail storm. The Advertiser said on Saturday, 17 October, that the damage from the hail storm could reach $50m. I am waiting for some semblance of apology from those honourable members opposite for what was a disastrously misleading speech in this House by the honourable member for Dunkley. Not only were grape crops affected by this hail storm which went through part of the Barossa Valley and the Riverland; cereal crops and pea crops in what is the State's key cereal producing area, the mid-north in the heart of the electorate of Wakefield, were absolutely devastated. Pea crops that would have been standing almost as high as the bench finished up little more than two inches off the ground. The Government will feel the results of this sort of rural damage. For example, Roseworthy Agricultural College which is partially funded by the Government had one of the original college ceilings collapse. Loxton Research Centre had major damage to glass- houses, all of which will need to be replaced from taxpayer's funds. But essentially I must point out that what the Government would have expected to pick up in tax revenue from farmers across South Australia, it will not now collect thanks to the drought, to the frosts that followed the drought and to the hail that preceded the drought breaking rains. Mr COURTICE(Hinkler)(10.53) —Tonight I wish to bring to the attention of the House a speech made by the Deputy Leader of the National Party of Australia, the honourable member for Murray (Mr Lloyd). The Deputy Leader accused the Government of being preoccupied with technology and manufacturing, claiming it was a serious fault in the Labor Government's attempts to lift Australia's exports. Do National Party members really believe that? Do they really want to run down Australia's manufacturing industry? By virtue of that, the National Party wants Australia to return to the 1950s, riding to prosperity on the sheep's back. They have even rejected the high tariff manufacturing years when John McEwen was a Minister. This policy runs counter to everything we have being trying to achieve in Australia. This Government has floated the exchange rate. Through the prices and incomes accord, it has brought about a sensible wages policy. Through schemes such as the steel industry plan, the heavy engineering plan and the car industry plan, the Government has brought about a fundamental restructuring of Australian industry. This country is now in the most competitive position on world markets in living memory. Yet the National Party wants to deny all that. It wants to return to policies which abolished the manufacturing sector in our nation. In my State of Queensland, we have one of the lowest manufacturing bases in Australia. Queensland has had the lowest number of jobs in the manufacturing sector since 1982. It spends the least per capita in Australia in providing industrial infrastructure. The manufacturing portfolio is of low priority, being given to a junior Minister. Does the National Party really want the Queensland model to be the Australian model? The Queensland economy needs diversifying. All its eggs are currently in one basket. In my own electorate we are working flat out trying to attract new manufacturing industry, particularly in Bundaberg and Gladstone. According to the new National Party policy, Gladstone can simply close down. By being anti-manufacturing, the National Party is really anti-Gladstone. Recently, Bundaberg hosted the Northern Australian Development Conference. The topics for discussion listed the new technologies, yet the Deputy Leader of the National Party criticises `the futility of assisting high technology industries'. The National Party is quite clearly ignorant on economic matters. It should have a word to Austoft, a Bundaberg company that is competing on world markets and achieving success. The National Party should be condemned for advocating policies which simply ignore the great emphasis being placed on manufacturing by businessmen, not only in my electorate but also throughout Australia. Mr CADMAN(Mitchell)(10.56) —I wish to lodge a complaint about the attitude of the Treasurer (Mr Keating). I do not believe that the example he sets in this chamber in regard to his travelling allowance does us any credit. His example really proclaims that anything is acceptable if one is in a position to get away with it. I do not think that that is an encouragement to pay as you earn (PAYE) taxpayers. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! I think that the honourable member should be a bit careful and bear in mind the fact that if one wishes to criticise another member, one should do so by substantive motion. Mr CADMAN —I am looking at the principles rather than the personalities, Mr Deputy Speaker. I think that we all have a responsibility to set an example that will encourage a response from the Australian community. Taxation and the problems associated with it have exercised the minds of successive governments over the past few years and attitudes were prevalent in our society which seemed to indicate that if one could get away with a tax rip-off-a white collar crime-then that was fair game. Both sides of the House condemned those attitudes and took legislative action to deal with them. I believe that the Treasurer is encouraging those attitudes amongst PAYE taxpayers. The integrity that we would like to see those taxpayers exercise in fulfilling their tax obligations is discouraged rather than encouraged. Mr Cunningham —I take a point of order, Mr Deputy Speaker. If the honourable member wishes to get into this type of debate, there are Standing Orders which clearly indicate the way in which he should proceed. If he wishes to put anything of that nature on the record against another member, he must do so by substantive motion and not bring up his gutter-type politics at a very late hour in the House. Mr CADMAN —Oh, come on! I am not adopting that approach. If the honourable member wants a boots and all debate, I can get into that. Mr DEPUTY SPEAKER —Order! Before the honourable member for McMillan entered the chamber I drew the attention of the honourable member for Mitchell to the fact that if he wishes to criticise another member he must do so by substantive motion. I am taking account of what the honourable member for Mitchell has to say and I trust that he will stick to generalities, not specifics. Mr CADMAN —Certainly. On the other hand, if we look at the large corporations, we see the attitudes to which I have referred. We see that the thought has been abroad that if one can get away with it, that is fine. That fact has been taken into account and this chamber has acted upon it. The logic of the way in which the Treasurer expressed himself today defies explanation. If we all adopted those attitudes we would all buy a shack somewhere in Western Australia because we would gain greater benefit by claiming a travelling allowance from that State. Mr Humphreys —I rise on a point of order. The honourable member is clearly reflecting on the Treasurer and I hope that you, Mr Deputy Speaker, will order him to bring his remarks back to the debate to which he should be addressing himself instead of reflecting on the Treasurer. It is quite clear that he is reflecting on the Treasurer and at no stage today did the Treasurer encourage anybody to be a tax avoider. He did not encourage the sort of behaviour that the honourable member for Mitchell implies. Mr DEPUTY SPEAKER —Order! It being 11 p.m., the debate is interrupted. The House stands adjourned until 10 a.m. tomorrow. House adjourned at 11 p.m. The following notices were given: Mr Young to move- (1) That the resolution of appointment of the Joint Committee on Foreign Affairs, Defence and Trade be amended- (a) by omitting ``3 sub-committees'' from paragraph (8) and substituting ``4 sub-committees'', and (b) by omitting paragraph (11) and substituting the following paragraph: ``(11) That the quorum of a sub-committee be 3 members of that sub-committee.''. (2) That a message be sent to the Senate acquainting it of this resolution and requesting its concurrence. Mr Duncan to move- That this House consents to termination by the Commonwealth of the Airlines Agreement 1981. The following papers were deemed to have been presented on 21 October 1987: Aged or Disabled Persons Homes Act-Regulations-Statutory Rules 1987, No. 239. Defence Act-By-laws-Statutory Rules 1987, No. 238.