Monday, 26 October 1987 Madam SPEAKER (Hon. Joan Child) took the chair at 2 p.m., and read prayers. Mr HOWARD —My question is addressed to the Treasurer. I refer him to his admission this morning that the stock market decline would affect world growth and that that would have an impact on Australia's balance of payments and domestic demand. Does the Treasurer agree that investment, jobs and the Budget deficit are also likely to be affected and, therefore, that the strategy behind the Government's last Budget has been significantly undermined? Mr KEATING —The answer is no. The strategy has not been significantly affected. What I said this morning was that it may be a consequence of this collapse in capital values on the stock market that consumer spending, consumer confidence and investor confidence in the United States of America come off somewhat. If that were to happen it may slow down the growth of the United States economy. However, I remind the House that last Thursday's statistics of its national accounts for the quarter showed that the American economy was growing a lot faster than the American Government wanted it to grow and that it is growing from the wrong places-growing from consumption. I also remind the House that when I returned I said that I thought the world was going to be growing faster than we had originally contemplated in the Budget. That is a view with which the Organisation for Economic Co-operation and Development (OECD) concurs. If the world were to slow down somewhat, that potential slow-down may be such as only to correct the more bullish assumptions for world growth-that is, assumptions more bullish than we had originally had factored into our own Budget and economic strategy. So in saying that, I thought that I was saying the obvious. I made the next link point that even if world growth slows down somewhat, world trade has been growing faster than world growth. It is possible that that could have some impact upon our exports. It is also possible that the shake-out in our own stock exchange will have some impact upon Australian consumption spending. That can also have an offsetting balancing impact upon the current account. In short, it is just a bit too early to say what we think all these impacts will be. That is why I said at the interview-I thought eloquently-that we are not running around, as Opposition members are doing, like chooks with our heads chopped off trying to find the policy settings for 9 o'clock this morning and perhaps another lot for 9 o'clock tomorrow morning. That is the sort of stuff that we see. I noticed that the Leader of the Opposition, in reply to a question on a radio interview, `When you say tighten fiscal policy, what do you mean?', said: . . . cutting spending further because one of the effects of the stock market fall could well be that revenue collections will not be as great and if the revenue collections are not as great then the deficit will grow and some adjusting action on the spending side will be necessary to make up the lost revenue. We do not think the revenue collections will decline as a result of this activity. As I said last week, all the company income revenue has lagged by one year off the 1986-87 income, and all the other bases in the tax system are growing pretty much along with our budgetary expectations, indeed, one or two are growing faster. So, if the only rationalisation for another round of spending cuts from the Leader of the Opposition is that he thinks that the revenue is not going to cut the mustard, I think he is going to be wrong about that and, therefore, this whole phoney rationale for another round of budgetary cuts is just a knee-jerk response from an outfit that does not have any original ideas. Let me just say a couple of things about economic conditions and policy. As I said a couple of minutes ago, we will be making our assessment of the fall-out of this change over the next few weeks. The Government has already achieved a substantial windback in fiscal policy more rapidly than any other OECD country and in that sense one deplores hearing comment not just from the Opposition but also from the media as though our fiscal position is the same as that of the United States; it is not, our fiscal position has been ambitiously changed for the better and one has to comprehend the Australian policy settings in terms of the change in that fiscal and wage setting. There will be no mini-Budget during the remainder of calendar year 1987 and, as is usual, the Government will consider the option of a statement of initial budgetary measures-in other words, a May-type statement-at the appropriate time which is, of course, early next year. So whether the option to proceed with a May-type statement is taken up will depend on a range of factors to be weighed much closer to that time. Let me conclude on this point. Every day we hear the Leader of the Opposition on any radio station that will talk to him-which is most because they know he will talk to them-say that Australia has to make these rapid and offsetting adjustments. In my last visit a week or two ago to the Northern Hemisphere, in almost every place I went-Germany, Britain, the United States and France-people in financial institutions and official organisations were talking about the speed of the Australian economic changes. I just make the point to the Leader of the Opposition that last Wednesday in the Wall Street Journal, which would have been probably the most read paper in the country on that day, was an article headed `Australia points the way'. Let me read a bit of this to those people on that side of the chamber; I know they love this sort of stuff like a dose of castor oil, but they should listen anyway. The article states: As the recent recovery of the Australian dollar will testify, a country does not have to fully eliminate a balance of payments deficit in order to enjoy a recovery in foreign demand of its currency after a confidence crisis. Mr Sinclair —That is why our market fell after that report. Mr KEATING —The right honourable gentleman should just listen to this. It continues: It simply has to develop an economic strategy that is credible and shows some clear signs of progress towards shrinking its external deficit. After experiencing a major currency crisis during the summer of 1986, Australia regained investor confidence through three different policy adjustments. It goes on to talk about the three adjustments-wages, fiscal, et cetera. The article merely reflects the current state of mind in the Northern Hemisphere about Australia and this Government. If those opposite want to get up and talk with any credibility about policy settings-we have this position-- Mr Tuckey —Madam Speaker, I raise a point of order. My point of order is that the Treasurer has been speaking for 10 minutes and he is now repeating himself. Mr KEATING —Having gone to an election and lost-and this is a view being put particularly by the Deputy Leader of the Opposition-the Opposition thinks it is now dealing with a clean sheet of paper, and can make criticisms of the Government's economic policy in a vacuum. It believes that there is a clean sheet of paper, because it has lost the election, and that it can start from scratch. That is wrong; there is a big black blotch right in the middle called `election policy'. Then there are black blotches all around called `former economic performance as a Government'. By the time one gets through the big black blotch in the middle called `election policy' and the black blotches around the outside called `former economic performance in government', there is no white space left. Mr LEE —My question is addressed to the Minister for Employment, Education and Training. Has the Minister's attention been drawn to reports that Dr Terry Metherell, a prominent member of the New South Wales Opposition, has queried the effectiveness of this Government's Priority One program, and that the New South Wales Education Minister, Mr Cavalier, believes that it was a mistake to establish what he called `another separate institution to cope with youth unemployment', rather than directing the relevant funds through the technical and further education (TAFE) system? Will the Minister inform the House of the progress that the Government has made in the area of improving young people's education, employment and training prospects as announced by the Prime Minister in 1985? Mr DAWKINS —One does not normally take much notice of what Opposition members in State parliaments might say about this or any other matter, but I was concerned to find Rodney Cavalier echoing some of these thoughts. The point is that there has been a very substantial improvement in the prospects for young people both in the education system and in the labour market and all our efforts, from the launch of Priority One onwards, have been dedicated towards one single objective, and that is ensuring that there are better opportunities, particularly for young people. If we are to compare one of the widest measures, we find that since the election of this Government, the teenage level of unemployment has come down from 26 per cent to 21 per cent-a very substantial improvement indeed, given the circumstances in which we find ourselves. If we take into account the number of young people who are in the education system, we find that the teenage level of unemployment is not much different from that for the community as a whole. I suppose that the most important thing about this point is that Priority One was never just about traineeships, as impressive as they have been. Over the last few years, we have seen a very impressive build-up in the number of young people enrolled in traineeships and if we look forward to the end of this year, we expect to see some 20,000 young people involved in traineeships during this financial year. What is important about recent developments is that not only are young people recognising more and more the importance of traineeships, and not only are employers recognising, particularly in the private sector, the advantage of traineeships, but also an increasing number of trade unions are seeing traineeships as a very important way of recruiting young people into the work force. Through the work of my predecessor Ralph Willis, and many of his State colleagues, particularly among those such as Pat Hills in New South Wales itself, we have seen traineeships build to make a great contribution to increased opportunities for young people. Nearly half of the traineeships in Australia are in New South Wales and Rodney might talk to Pat about his views about the important contribution that traineeships are making to young people. One of the difficulties in having separate Ministers for education and training is that sometimes they construct this rivalry between TAFE colleges and other kinds of training programs. I want to make the point that traineeships as a whole will ensure that, by the middle of 1988, about $30m will have found its way into TAFE systems throughout Australia, as a means of providing training opportunities for the trainees. Indeed, over 80 per cent of the training for trainees is provided through TAFE colleges, and I would expect that trend to continue. As well as that, if we look across the range of training programs in which we are involved, we see that something like $70m or $80m coming from the Commonwealth is finding its way into TAFE colleges, which are run by State governments. Finally, we have seen secondary retention rates increase quite dramatically under this Government from a percentage figure in the high thirties up to the high forties in terms of the proportion of young people starting and completing secondary school. One of the great contributions to that improvement has been the great enhancement that we have been able to bring through Austudy. We now find that of some 215,000 people receiving Austudy, some 94,000 are in secondary education, and that figure is up substantially from last year. That means that for poorer families-those in the lower socio-economic group-Austudy is becoming a major contributor to increasing the retention rates for young people from those poorer families. Typically, those children would have left school as soon as possible to take their chance in an uneasy job market or go on to the unemployment benefit, but they now find that they will be rewarded to the same extent by remaining in school. We now find that the participation rate among poorer families is equal to the participation rate for middle income families. That is a substantial improvement and one of which we are justly proud. It is improving equity enormously in terms of educational opportunity, and that was one of the important objectives of Priority One. I think it is time that Priority One was recognised for its very great success to date, and that will increase in the future. Mr PEACOCK —My question is directed to the Treasurer, and I refer him to reports this morning that part of the rescue package to save Rothwells Ltd comprises a loan from a bank backed by Western Australia's Labor Government. Will the Treasurer clarify the extent to which public moneys have been used by the Western Australian Government to back up financial institutions such as Rothwells and in particular to what extent is the Commonwealth Government acting as an implicit guarantor for the loans backed by the Western Australian Government? Mr KEATING —I am not familiar with all the details of Rothwells' financing or its structure, apart from what I have read in the newspapers. The position is that the Commonwealth has made it clear to the trading banks that it will provide liquidity if needs be where a trading bank encounters difficulty with a client and where the fundamentals of the client are such and where support by that bank is such that the difficulties can be overcome. What we have seen in relation to Rothwells is an interest on the part of the Western Australian Government to protect depositors-who in the main are Western Australians-from what in old fashioned terms is a run on the institution, and following that a restructuring of Rothwells' assets and some support through underwriting by major companies in the market-place. Mr FREE —My question is to the Minister for Social Security. What arrangements are being made by the Department of Social Security to promote the Government's family allowance supplement? Mr HOWE —In response to this question I make it clear to Parliament that the administrative arrangements with respect to reforms concerning family income assistance will be phased in over two years. I think it is important to say that some honourable members have raised with me a confusion about who will receive the family allowance supplement in December of this year. I want to make it clear that in terms of income, people who are in the social security system, people receiving additional pension and additional benefit, will receive that payment but at a higher level taking account of the increases announced in the Budget. Those families will receive $22 a week rather than $17 a week, the current payment, or where there is an older child, $28 a week. Similarly, the follow-up with respect to people who are currently in receipt of family income supplement will be done by the Department of Social Security and such recipients will not need to take any initiative. Furthermore, the Department will be issuing advices to people so that it is clear that they have received that increase. Of course, the Government, in introducing this new family allowance supplement, has in mind particularly the needs of working families and a campaign will be carried out from the middle of November through to the middle of December designed initially to advertise and promote the existence of the family allowance supplement insofar as it relates to working families because quite clearly those families will need to apply to the Department of Social Security to receive that payment. In particular, apart from general publicity, an attempt will be made by the Department of Social Security to contact employers, trade unions and particularly schools and community groups to make sure that people generally in the community are aware of the existence of the payment. There will be targeted strategies to inform ethnic communities. The leaflet concerning the supplement will be printed in 25 languages. A particular effort will go into communication in relation to Aboriginal communities, particularly using radio in the north of Australia in different Aboriginal languages. For the first time we have designed an information leaflet with a tear-off coupon, postage paid, which families can send away for an application form to be posted to their home. The target is to reach 200,000 families with 440,000 children by the end of this financial year. We are aiming in that initial campaign, which of course will need to continue through next year, to make sure that as many families as possible receive the child payment by Christmas. We are seeking to contact working families about the new payment but of course, as I suggested earlier, a very large number of families-something like 400,000 families, with 740,000 children-who are currently in the social security system will receive that payment on advice before Christmas. I do not think I need to remind the House how significant the gains in this package are for low income families and I know that in the debate last week some interest was shown, I think from both sides of the House, in the new scheme and I hope that all members of parliament will do what they can to ensure that the family allowance supplement is very well known, particularly by working families in their electorates. Mr N.A. Brown —I ask the Minister for Land Transport and Infrastructure Support whether he recalls the words of the Menzies report into the Amann Aviation Pty Ltd contract that: The watchwords for a Commonwealth purchasing agency are-best value for money, probity, fair dealing, equal opportunity and public accountability. Can the Minister explain why none of those principles was followed when the Minister's Department, with his approval, recently gave to the lucky licensee of the duty free concessions at Sydney (Kingsford-Smith) Airport a three-year extension to its five-year contract without putting the contract for that extension out for public tender? Why were no public tenders called? Will the Minister now, before it is too late, follow the Menzies recommendation in the Amann case and in this case direct his Department to cancel the secret deal that it has made and put this multi-million dollar contract out for public tender? Mr DUNCAN —This matter, as I recall, involved a contract at the international terminal at Sydney. The international terminal at Sydney, as the honourable member would know, is being upgraded at a cost of many millions of dollars. The concession, I understand, was extended by three years because there had been considerable disruption to the business arrangements at that terminal. As a result of that, an arrangement was entered into which was thought appropriate in the circumstances. It is intended that that contract will be put out to public tender at the end of this time. The extension was given in the circumstances of the disruption that had occurred. It seems to me that, in those circumstances, that was an appropriate thing to do. Mr KENT —My question is directed to the Minister for Industrial Relations. Is it a fact that, following the plunge on stock exchanges, the Minister supported a week's adjournment of the national wage case? Will the Minister now urge the Australian Conciliation and Arbitration Commission to resume the case so as not to penalise further the Australian work force for the gambling habits of the elite gentlemen belonging to the wealthy minority? Mr WILLIS —I thank the honourable member for his question without notice. The position of the Government in this matter has been quite clearly stated. We sought a week's delay in the opening of the national wage case because the case was due to commence the day after the spectacular events on the international and Australian stock exchanges. The Government needed time to assess the possible impact of that on the real economy. That assessment is being undertaken. The Government will consider this matter prior to Wednesday and make its decision accordingly about what it thinks should happen to the national wage case. Mrs SULLIVAN —My question is directed to the Minister for the Arts, Sport, the Environment, Tourism and Territories. It refers to his oft-repeated self-congratulations on the Hawke Government not having increased the $20 departure tax. Is it not a fact that international travellers will now pay a total of $25 into Federal Government coffers, thanks to the introduction of a $5 entry tax in this year's Budget? Does the new $5 tax therefore amount in practice to little more than a 25 per cent increase in the departure tax? Mr JOHN BROWN —With some justification, I think, I have said quite often that the Government has not increased the $20 departure tax, which was introduced by the previous Government, I think in 1980 at $10, was increased in 1981 to $20 and would, no doubt, had that Government stayed in office, now be a multiple of that. Mr Donald Cameron —Oh, come on! Mr JOHN BROWN —Can the honourable member deny those facts? I do not think he can. Madam SPEAKER —The Minister will get on with answering the question. Mr JOHN BROWN —This Government made a very firm decision when we first came to office that we were not about to increase that figure. From 1983 to 1987, despite increases in costs and in the consumer price index, that figure has not increased. The extra $5 for the visa is in the nature of cost recovery. Most other countries have a similar charge. Given that the cost of an air fare to Australia is about $1,500, I do not think that anybody will be put off a trip to Australia because of a charge of $5 for the reissuance of a visa. Ms McHUGH —Can the Minister for Foreign Affairs and Trade confirm that the United States House of Representatives recently passed a resolution in favour of United States signature of the Treaty of Rarotonga? Mr HAYDEN —On 20 October, the United States House of Representatives approved, without objection, a `sense of the Congress' resolution urging the President of the United States to reconsider his decision not to sign the protocols to the South Pacific Nuclear Free Zone Treaty. The resolution noted, firstly, that the treaty was fully consistent with ANZUS and with United States security commitments in the South Pacific; secondly, that it satisfied established United States criteria for nuclear weapon free zones; and, thirdly, that the signature and ratification of the protocols would be in the national interest of the United States. Naturally, the Government is pleased and encouraged by this resolution of the United States House of Representatives. We sincerely trust that the United States Administration will review its earlier decision not to sign those protocols, in particular in the light of this expression of the `sense of the Congress'. Mr McGAURAN —My question is directed to the Minister for Aboriginal Affairs. Following the Prime Minister's promise of a compact or treaty with Aborigines, I ask: Has even the most basic outline of such a document been formulated by either his office or his Department? If not, will the Government ever meet, and in what form, the expectations it has so cynically raised? Mr HAND —It is not a cynical exercise in which the Government is engaged. No document has been prepared by the Government. As the Prime Minister has outlined, what we are going to do, though, is to engage in dialogue with the Aboriginal community, and other members of the community, to reach an agreement. Mr Sharp —All words and no action. Mr HAND —The comment was made, `All words and no action'. The point about this is that if members of the Opposition joined with honourable members on this side of the chamber, we could reach agreement on this all important issue. I say to the questioner that here is an opportunity for this country to settle down, for us to discuss this issue with people rationally and try to reach agreement. If honourable members opposite let this opportunity go and call it a cynical exercise, I think that they will be roundly condemned by the rest of the nation and the world. Mr GRIFFITHS —I address my question to the Minister for Employment Services and Youth Affairs. Does he agree that the rate of teenage unemployment, which stood at 21 per cent in September 1987, is unacceptably high? What measures does the Government propose to deal with this problem? Mr HOLDING —I thank the honourable gentleman for his question. Yes, the Government does regard that figure of 21 per cent as unreasonably high. It ought to be remembered that when we came to office in April 1983, the youth unemployment figure stood at 26.4 per cent. Although we have reduced that figure, we still believe that there is a considerable distance to go. Caution should generally be used in referring to statistics on youth unemployment because the figure can vary quite considerably at various parts of the year, for example, during school holidays. The proportion of those in the 15- to 19-year group looking for full time work is currently only about 8 per cent. That is related partly to the emphasis that the Government is placing at two levels. The first is to encourage younger people to stay in school longer rather than join the work force. There has already been a considerable degree of success in that regard. The other is the development of our traineeship programs. We expect that in 1987-88 some 20,000 young Australians will participate in traineeship programs. That is a considerable achievement. I point out that all of those traineeship programs involve quite considerable and complicated negotiations with employers and unions in order to produce arrangements which can then be followed up by my Department. We believe that negotiations which are currently under way with key unions will produce a situation in which we can expect a considerable upturn in the near future in the figures that I have already given the honourable gentleman. Mr COWAN —I ask the Minister for Defence Science and Personnel: What steps has the Government taken to address the inevitable safety considerations resulting from the extraordinary wastage of trained pilots and pilot instructors from the Royal Australian Air Force (RAAF)? Mrs KELLY —I thank the honourable member for his question. I know that he is concerned about this issue, mainly because Williamtown is in his electorate. He raised during the consideration of the Estimates these sorts of issues and his concern that some people were leaving Williamtown. I am happy to tell him that some of the people who had actually notified their resignation have since withdrawn that notification. I assure him and other members that there will be no reduction in RAAF readiness, RAAF capabilities or safety standards of operational crews. The Chief of the Air Staff has directed that RAAF flying training be given priority. I emphasise that point: training is to be given priority. RAAF activities will be adjusted as a short term measure to provide the additional resources for training. Reductions in operational activities will be only temporary and probably only marginal in terms of total flying hours. The retention of qualified flying instructors governs the rate at which RAAF pilots can be trained. The RAAF is presently urgently reviewing its qualified flying instructor and pilot training requirements as a launching base for recovery. I made some points in the House last Thursday, which I now reiterate in order to highlight some of the positive things that this Government is doing to address this very serious problem. We are working towards increasing to 55 years the compulsory retiring age for pilots with the rank of wing commander and below. We are working towards introducing a limited air crew specialisation, which will allow an extended flying career for selected officers, and adopting policies designed to widen promotional opportunities for non-pilots in areas such as personnel and materiel, thus reducing the demand for pilots in staff posts. This Government is addressing the problem. We acknowledge that it is a problem, and we are putting policies in place to ensure that the problem is overcome. Mr SNOW —I ask the Minister for Veterans' Affairs: Will the Government ensure that totally and permanently incapacitated (T and PI) pensioners continue to receive their benefits after the age of 65, subsequent to a Federal Court of Australia decision which called into doubt the validity of the benefits? Will veterans receive benefits pending legislative action by the Government? Mr HUMPHREYS —I thank the honourable member for his question. I know he is very concerned about the T and PI pensioners, not only in his electorate but throughout Australia. I know that many T and PI pensioners were concerned that they would lose their pension after the age of 65 after the Federal Court decision. The Government has decided to amend the Veterans' Entitlements Act to ensure that all of those veterans receiving the T and PI pension will receive their pension for the whole of life. We have been promised a speedy passage of the Bill through the Parliament by the Leader of the Opposition. Dr WOOLDRIDGE —Did the Treasurer issue a Press statement on 6 July, just five days before the election, while campaigning in Chisholm, to the effect that an office of the Australian Taxation Office could be opened in the electorate, which at that time was the most marginal Government-held electorate in the country? Did the Treasurer claim that the proposed office would employ 500 to 600 people and provide a vastly improved service to the people of the electorate? Does the Treasurer intend to proceed with his pre-election proposal? If not, does he agree that he misled the people of Chisholm with a cynical pre-election promise that he never intended to fulfil? Mr KEATING —I do not know what the honourable member is complaining about; it did not work. The Australian Taxation Office is going through a process of decentralisation away from these large centralised structures which have been generally located in the central business districts, where rentals have been at very high levels and where simply the provision of physical space has become a problem in any of the buildings that are likely to be currently leased and where free space becomes available or in any of the new areas. As well as that, of course, we have had the administrative inefficiencies of having these very large groups of people there, plus the staff difficulties of people travelling from various parts of the suburbs of the cities to the central business areas. In the last few years we have seen the opening of regional offices, in Melbourne and, in New South Wales, in Newcastle. There is another one opening soon in Chatswood, there is one which the Tax Office believes-the Government agrees-it would be in its best interests to open in that region of Melbourne; and also another in the south-western area of Sydney. They are decentralisation objectives which the Tax Office still has very firmly in its view. It has been in the process of evaluating accommodation and, at the same time, testing with its staff their willingness to serve in the various regional offices. But I cannot say any more about that now. Mr MARTIN —Has the Treasurer's attention been drawn to newspaper reports in the Illawarra Mercury on Friday, 23 October and Saturday, 24 October which indicate his support for the plans of the Broken Hill Proprietary Co. Ltd (BHP) to shed a further 2,600 jobs at the Port Kembla steelworks? Are these reports correct? Mr KEATING —They are not correct. What I said was reflecting upon both the decision of BHP and the requirements on BHP under the steel industry plan for any shedding of labour at its steel establishments to occur by attrition rather than by retrenchment. Indeed, that has been occurring and will occur into the future. The other point I made was that if we are to continue to compete in the world in terms of the competitiveness of Australian steel, obviously the steel industry's productivity will continue to need to rise. We have seen a fairly healthy lift in the profitability and productivity of the Australian steel industry; but, as fast as we have been going, some other countries have been going faster. In other words, nothing is static; everyone else is moving too. That implies continuing improvements in management and work practices at Australian steel establishments. I made the obvious point that, given the fact that world steel production is fairly static, for productivity to improve for a given level of production implies, over time, a smaller work force. That is implicit in the BHP announcement, but the Government is saying that that must be in line with the attrition clause of the steel industry plan. In an economy in which the Government has fostered faster employment growth, in the past those lay-offs have been taken up in other industries in other parts of those particular locations, plus the fact that there has been regional support in areas in which these steel industries exist. So it would be wrong-and was wrong-to take my views as some sort of blanket endorsement for a policy of slashing employment at the Port Kembla steelworks. I do not endorse that, but I do endorse over time the improved productivity of the steel industry by attrition and by changes to both management and work practices. I emphasise management practices because I think the management style of the steel industry is as important an issue as the work practices which have been unwound in the last few years. As a result of the occasion of my visit to Port Kembla for the opening of the new continuous slab cast from a rolling mill, one can be pleased by the $800m worth of investment and the ongoing investment at Port Kembla and say that it augurs well for the continuing competitiveness of the Australian steel industry. Dr WOODS —I refer the Minister for Social Security to his previous statements, firstly, that the Government could raise more than $700m a year from death duties and, secondly, that not taxing deceased estates was inequitable. I ask: What is the basis for this revenue estimate? Does the Minister consider that a wealth tax would be a desirable complement, on both budgetary and equity grounds, to measures aimed at reducing corporate and high personal marginal tax rates? Mr HOWE —I do not know the source of the statement that was attributed to me, but let me say that certainly I support, and this Government supports-over and against and in contrast with the Opposition-equitable taxation policies. As I suggested last week, whenever we have sought to improve the overall equity and efficiency of the taxation system we have had nothing but opposition from those on the other side of the House. I feel very strongly about this issue if for no other reason than that in terms of the portfolio of social security we are determined to achieve a fiscal system that is appropriately balanced. This Government has taken measures to ensure that people who do not need social security payments do not receive them. It has also taken a series of measures to ensure that people who have not been paying their fair share of tax do so. As I said, I am not at all sure of the source of the statement in the honourable member's question. Mr MacKellar —Did you say it or not? Mr HOWE —As far as I know, I did not. As I understand it, the honourable member attributed to me a statement in support of some particular measure relating to estate duty or death duty that might raise of the order of $700m. According to the various rates that might apply to inheritance taxes, of course we can raise very substantial amounts of money. In statements I have made in recent days in terms of advocacy of what government policy might be, I certainly have not made a statement as specific as that. I have pursued, and I will continue to pursue-I think all members of the Government will seek to do so-taxation policies which are equitable. Until the Opposition can convince the Australian electorate, as it failed to do in the most recent election, that it is in favour of equitable taxation policies it will remain in opposition. Whatever else may be said about the Australian electorate it is concerned to see much greater fairness than the erosion of the tax base that occurred when the Leader of the Opposition was Treasurer. Mr JOHN BROWN(Parramatta-Minister for the Arts, Sport, the Environment, Tourism and Territories) —For the information of honourable members, I present a report on the winding-up of the Canberra Commercial Development Authority for the period 28 February to 30 June 1986. Mr JOHN BROWN(Parramatta-Minister for the Arts, Sport, the Environment, Tourism and Territories) —For the information of honourable members, I present the annual report of the Pollution Control Authority for 1985-86. Mr JOHN BROWN(Parramatta-Minister for the Arts, Sport, the Environment, Tourism and Territories) —Pursuant to section 5 of the Parliament Act 1974, I present the following proposals for works within the parliamentary zone, namely: (a) Heritage 200 Plaques (b) High capacity fire hydrants The views of the Joint Standing Committee on the Parliament House are also being sought. When those views are available, I shall be in a position to take further action under the Parliament Act to seek approval of the work by the House. The following Bills were returned from the Senate without amendment or requests: Occupational Superannuation Standards Bill 1987 Insurance and Superannuation Commissioner Bill 1987 Insurance and Superannuation Commissioner (Consequential Provisions) Bill 1987 Madam SPEAKER —I have received the following message from the Senate: Madam Speaker, The Senate, having considered Message No. 8 of the House of Representatives, has agreed to the following Resolution in connection therewith: (1) That the Senate concurs in the Resolution transmitted to the Senate by Message No. 8 of the House of Representatives relating to the appointment of a joint select committee, subject to the following modifications: (a) paragraph (1), after ``joint select committee'', insert ``, to be known as the Joint Select Committee on Video Material,''; (b) paragraph (1), after ``operation of'', insert ``the Customs (Cinematograph Films) Regulations,''; (c) sub-paragraph 1(a), leave out ``by comparison with previous legislation purporting to govern'', insert ``to adequately control''; (d) sub-paragraph 1(c), leave out `` `X' ''; (e) after sub-paragraph 1(c), insert the following new sub-paragraph: ``(ca) whether `R' rated videos should be permitted to be displayed for sale or hire in the same area and side by side with `G', `PG' and `M' rated videos and, if not, what restrictions should be imposed on the display of `R' rated material;''; (f) after sub-paragraph 1(d), insert the following new sub-paragraph: ``(da) examine the extent to which videotapes/discs containing pornographic and violent material are available to the community in general;''; (g) after sub-paragraph 1(f), insert the following sub-paragraph: ``(fa) whether the sale, hire, distribution or exhibition of films and videotapes/discs that would, under existing laws, be accorded a classification above `R' should be made unlawful;''; (h) paragraph (2), leave out the paragraph, insert the following paragraph: ``(2) That the committee consist of 11 members, 4 Members of the House of Representatives to be nominated by the Government Whip or Whips, 2 Members of the House of Representatives to be nominated by the Opposition Whip or Whips, 2 Senators to be nominated by the Leader of the Government in the Senate, 1 Senator to be nominated by the Leader of the Opposition in the Senate and 2 Senators to be nominated by any minority group or groups or independent Senator or independent Senators.''; (i) paragraph (6), leave out ``4'', insert ``5''; and (j) paragraph (10), leave out ``Classification'', insert ``Material''. (2) That the provisions of the Resolution, so far as they are inconsistent with the Standing Orders, have effect notwithstanding anything contained in the Standing Orders. The Senate requests the concurrence of the House of Representatives in the Senate's modifications of the Resolution transmitted to the Senate by the House. KERRY SIBRAA President The Senate, Canberra, 23 October 1987 Motion (by Mr Young) agreed to: That the message be taken into consideration forthwith. Motion (by Mr Young) agreed to: That the modifications of the Senate be agreed to. Madam SPEAKER —I inform the House of the following nominations of members to be members of the Joint Select Committee on Video Material: Mr Charles, Ms Crawford, Ms Jakobsen and Dr Klugman have been nominated by the Government Whip; Mr Jull has been nominated by the Opposition Whip; and Mr Adermann has been nominated by the National Party Whip. 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 outlaw destructive experimentations on human embryos. And your petitioners, as in duty bound will ever pray. by Mr Ian Cameron,Mr Cobb,Mr Langmore,Mr Lavarch,Mr Moore,Mr Ian Robinson,Mr Ruddock,Mr Sharp and Mr Snow. 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 Ian Cameron,Mr Downer,Mr McArthur and Mr Ruddock. 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 Dobie,Mr Tim Fischer,Mr Porter,Mr Sharp and Mr White. 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 Jenkins,Mr Kent and Mr Milton. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned Australian citizens shows that: An ID Card numbering system for all Australians would give future governments tremendous power to collect sensitive information and use it against us. Criminal elements could benefit by forging cards and documents needed to obtain them, or by illegally accessing the data in the system. The dangers are much greater than with current systems such as Medicare, as the Australia Card number could link so many different confidential records. The cost to government and private enterprise of implementing the ID Card would be enormous, outweighing any gains. Tax cheats can be stopped more effectively by better checks in the present system. Your petitioners therefore pray that you will reject the Australia Card Bill. by Mr Bilney,Mr Downer,Mr Porter and Mr Wilson. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of certain citizens respectfully showeth that: The Hawke Labor Government's ID Card proposal is the most far reaching and intrusive piece of Australian legislation yet introduced, and that on all the evidence available, it will not tackle in the most cost-efficient and effective manner tax and social security fraud. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Reject Labor's ID Card proposal to prevent a gross waste of taxpayers' money and a significant infringement of civil liberties. And your petitioners, as in duty bound, will ever pray. by Mr Cadman,Mr Cobb and Dr Harry Edwards. 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 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 humble 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 the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of 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, it will not tackle in the most cost-efficient and effective manner tax and social security fraud. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Reject Labor's ID Card proposal to prevent a gross waste of taxpayers' money and a significant infringement of civil liberties. And your petitioners, as in duty bound, will ever pray. by Mr Cowan. 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 resubmitted to Parliament. As in duty bound your petitioners will ever pray. by Mr Hawker,Mr Hunt,Mr Ruddock and Dr Wooldridge. 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 be reconsidered and rejected because the proposal; 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, Will constitute an unwarranted infringement of individual privacy by the aggregation of a wide variety of personal information of a private matter, Will cause a further large and costly growth in the bureaucracy and burden on the taxpayer, and Cannot be guaranteed against misuse for purposes other than for which their introduction is stated to be intended. And your petitioners humbly pray that the problems which identification cards are intended to reduce should be attacked by other, more effective methods. And your petitioners humbly pray that the problems which identification 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 and Mr Sharp. 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 an I.D. 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. 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 Dr Hewson. 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 Downer and Mrs Sullivan. To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. We, the undersigned, call on the Federal Government to give notice to terminate the lease of the US base at Pine Gap before October 1986. We believe that in the interests of world peace and the Australian people, this lease should be terminated and the base closed because Pine Gap is a spy base and a war base: Since it was opened in 1969, it has eavesdropped on Australian telephone and telex communications. Information obtained in this way was used by the CIA to destabilise the Whitlam Government in late 1975. It provides communication facilities of CIA in countries throughout the world, much of which is connected with overthrowing other country's governments. Last year it became clear Pine Gap was spying on Greece. The electronic and photographic information its satellites receive is used to select nuclear targets in the territory of the Soviet Union and its allies. Many US military activities short of nuclear war are also co-ordinated by Pine Gap. These include the war against Vietnam and the invasion of Lebanon by US marines in 1984. Pine Gap spends only a tiny percentage of its time monitoring arms control agreements, and even then the data gathered is so top-secret Australia has no access to it. Pine Gap's role will be expanded under Reagan's Star Wars scheme to extend the arms race to outer space, threatening the existence of our planet. by Ms Fatin and Mr Milton. 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 it's 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 Blanchard. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of the undersigned citizens of Australia showeth: That many Australian wage and salary earners and self-employed persons do not enjoy secure retirement incomes provided by superannuation; and That the Government issued in December 1985 Guidelines for the implementation of the proposed productivity decision by the Conciliation and Arbitration Commission and draft Operational Standards for Superannuation schemes. Your Petitioners therefore humbly pray that the Government: 1. Guarantees to every employee the right and freedom to select the Superannuation scheme of his/her choice. 2. Protects the individual exercising that freedom of choice from any coercion, influence or other pressure which may be applied by any employer, association or trade union. 3. Will recognise only those schemes which provide genuine superannuation and reject those schemes which do not provide for- preservation of benefits to retirement vesting of employer contributions equal employer and employee Trusteeship control to ensure security of investments. And your Petitioners as in duty bound will ever pray. by Mr Cadman. To the Honourable the Speaker and Members of the House of Representatives. The petition of the undersigned respectfully showeth that the Fringe Benefits Tax is an iniquitous and unjust impost which will further damage the Australian economy and further increase costs to employers. The Tax will: (1) further increase the level of unemployment; (2) increase the administrative costs and overheads for business and Government; (3) particularly disadvantage small businesses and farmers; and (4) act as a disincentive to those who are the most productive and skilled; and we the undersigned call upon the Government to immediately repeal the Fringe Benefits Tax. And your petitioners, as in duty bound, will ever pray. by Mr Cadman. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled, 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 in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That we oppose plans by Telecom Australia to close many of the Telecom Business Offices (TBO's) and replace them with a reduced service to be co-located with the District Customer Services Office. We believe the public should be able to make telephone bill payments, applications for new services, selection of telephones and complaints, in person at a convenient and easily accessible location. Telecom Business Offices provide this service, and therefore it is wrong that their contribution and performance will only be assessed on their sales revenue. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: instruct the management of Telecom Australia to immediately cease all action to close any Telecom Business Offices, and to re-establish the services provided by TBO's already closed. 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 in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: Any proposals to time local telephone calls gravely concerns all country people. Isolation and communication was the second biggest problem facing rural women according to the `Survey of Rural Women' questionnaire and any attempt at timing local calls will only add to this problem, not decrease it. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Ensure that Telecom does not proceed with the timing of local telephone calls. And your petitioners, as in duty bound, will ever pray. by Mr Ian Cameron. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We, your petitioners, humbly pray, that Parliament in its wisdom will take no action to legislate for the Australia Card Bill. And your petitioners, as in duty bound, will ever pray. by Mr Ian Cameron. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That we oppose the reductions in staffing of the Department of Social Security over recent years, and deplore the plans to reduce staff further. Social Security payments are the only source of income for many Australians. It is important that these people and their dependants receive their correct entitlement in a timely and efficient manner. This has been made difficult by the effect of widespread changes in the last Federal Budget and the May Economic Statement, combined with a continued reduction in staff. We believe that people who are dependent upon the Department of Social Security for their most basic needs of food and rent should not be expected to put up with inefficiencies in the Department caused by insufficient staffing and the resultant inadequate training. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to instruct the Department of Finance to accept the findings of the recent Joint Staffing Review (JSR II) and increase Social Security staffing levels accordingly. And your petitioners as in duty bound will ever pray. by Mr Cross. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectively showeth: That the time taken of at least six to eight weeks to process applications for the Austudy tertiary allowance in Brisbane is intolerable and causes severe hardship and distress to many students. Your petitioners therefore humbly pray that the Government takes every action to minimise the delay in processing applications for the Austudy tertiary allowance. And your petitioners, as in duty bound, will ever pray. by Mr Cross. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully shows: We are concerned that- (a) the proposed changes in legislation to Unemployment Benefit for young people adds to the already ill-conceived and over-bureaucratic welfare system and (b) the abolition of CEP and the inadequacy of other training programs and (c) cuts in funding for education, public housing and other welfare areas Mean that young people's needs are being neglected by the Government. Your petitioners therefore pray that the Commonwealth Government immediately takes steps to: (a) establish an anti-poverty level of income for all young people regardless of whether they are in training, retraining, education, employment or unemployment. The first step in achieving this is the full reinstatement of Unemployment Benefit for sixteen and seventeen year olds with automatic indexation linked to CPI increases. (b) increase educational opportunities for all young people. The first step in achieving this would be to create 120 000 new places in higher and further education. This would make up for the 100 000 people turned away from TAFE courses and 20 000 people from universities and CAEs this year. (c) establish a long term job creation program. The creation of 53 100 jobs for those young people who have been unemployed over 12 months is required immediately. And your petitioners, as in duty bound, will ever pray. by Mr Cross. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully sayeth: Your petitioners humbly pray that your honourable House direct that the existing 4 (C4) zoning on the Kurnell Peninsula, in New South Wales, be removed and that this be replaced by a zoning more appropriate to the unique ecology of the area and to the historical significance of the Kurnell Peninsula, being the birthplace of the nation. And your petitioners, as in duty bound, will ever pray. by Mr Dobie. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That we consider the 2% discounting of Commonwealth Occupational Superannuation Scheme pension adjustments on 10 October 1986 to be a serious breach of trust by the Government. The Commonwealth has reneged on an established commitment as incorporated in Commonwealth legislation and benefit promise pensions are not being paid in full. In particular we resent the long-term effect of the discounting. The pension loss is compounded throughout the life of a pensioner and surviving dependants-into the 21st century for many. We consider this Government-induced penalty to be out of all proportion to the short-term ``extraordinary circumstances of the economy'' given as the reason for the discounting. Your petitioners therefore humbly pray that the Government: 1. limit the pension discounting effect of the Superannuation and Other Benefits Legislation Amendment Act 1986 to the period 10 October 1986 to 1 July 1987 so that pensions are restored to the 9 October 1986 levels as a base for the 1987 pension adjustment; and 2. consult with organisations representing pensioners before changing the terms and conditions of Commonwealth Occupational Superannuation Schemes. And your petitioners, as in duty bound, will ever pray. by Ms Jakobsen To the Honourable the Speaker and members of the House of Representatives of the Parliament of Australia assembled. We, the undersigned, plead that Parliament call upon the Video Committee to release its recommendations to ban violent and damaging videos forthwith, and desist with the plan to re-impose X-rated videos in all states wherein they have been banned. We entreat that the ACT be brought into line with other states in the banning of X-rated videos, and that the Committee be not allowed to further delay its findings until after the polls. Because we have waited for a long time, patiently, but are becoming alarmed over their evidence, p2770, 300 and 2989, 2990, and call upon Parliament to end the Canberra connections. Your petitioners therefore humbly pray that you will give this matter your earnest attention. And your petitioners, as in duty bound, will ever pray. by Ms Jakobsen. To the Honourable the Speaker and the honourable members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia showeth that whereas: They are completely satisfied with the design of the existing Australian National Flag. Your petitioners therefore pray that your honourable House will: Give a speedy passage to the Flags Act Amendment Bill which provides that the Australian National Flag can only be changed by a referendum. And your petitioners as in duty bound will ever pray. by Mr Jenkins. To the Honourable the Speaker and the members of the House of Representatives in Parliament assembled. The humble petition of citizens of Australia shows- That the people of New Zealand and the New Zealand Government have given an example to the world in their efforts to achieve a nuclear free South Pacific, and such decision being endorsed by the people at a general election. Your petitioners therefore pray that the Australian Government support the principled stand taken by the New Zealand Government and urges it to condemn any efforts by the U.S. Government to impose economic or other sanctions on New Zealand in retaliation for their stand on nuclear vessels. We further urge the Australian Government to urgently implement its policy to promote the development of zones of peace and nuclear free zones in the Indian and Pacific Oceans. by Mr Kent. To the Honourable the Speaker and members of the House of Representatives assembled in Parliament. The petition of certain citizens of Australia calls to the attention of the House that from 1st September 1987 virtually all recipients of sole parent pensions whose youngest child reaches the age of 16 will lose pension entitlement. Your petitioners therefore request that the House immediately take action to reverse this decision and to continue pension eligibility until the youngest child has completed full-time education. by Ms McHugh. 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 Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth that: Any proposals to abolish the Department of Veterans' Affairs gravely concern ex-servicemen, ex-servicewomen and their families, because they renege on clear and unequivocal commitments from various Commonwealth Governments to properly care for Australia's Veterans. Your petitioners humbly pray that the House of Representatives in Parliament assembled, urge the Parliament to: Ensure that the Department of Veterans' Affairs continues to exist as a separate and distinct Department of State servicing the needs of Veterans and their families. And your petitioners as in duty bound will ever pray. by Mr Ruddock. 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 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. Petitions received. Mr DEPUTY SPEAKER(Mr Leo McLeay) -Madam Speaker has received a letter from the Leader of the Opposition (Mr Howard) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The urgent need to recognise the vulnerability of the Australian economy to sudden shifts of world economic sentiment. 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 HOWARD(Bennelong-Leader of the Opposition)(2.58) —When the 1987-88 Budget was brought down by the Treasurer (Mr Keating) it was greeted by the Australian media, and by a large number of economic commentators, with one or two conspicuous exceptions, with almost universal praise and applause. We all remember the headlines about the 1987 Budget. The essential thesis of the Opposition at the time and, dare I say it, the essential thesis of a number of economic commentators who had looked beneath the surface, had worked out how the Budget aggregates had been arrived at and discovered such interesting facts as that the level of expenditure restraint in the May economic statement was a fraction tougher than the level of expenditure restraint in the Budget itself, was different. The reaction of those people and of the Opposition was rather more circumspect and cautious. Our attitude was summarised when I replied to the Budget on 17 September, a little over a month ago. I said: The Treasurer (Mr Keating) has brought down a Budget which seeks to paint a coat of veneer over a brittle and fragile economy. . . . My fear . . . and the fear of the Opposition, is that Labor's fifth Budget will not, as time passes, match the extravagant praise heaped upon it in recent days. . . . On behalf of the Opposition I simply say: Let the buyer beware. What I was saying then and what the more prudent economic commentators were saying was: `Look beneath the surface and look at the economic context in which Australia was placed then and is placed now, and look at the fact that 40 per cent of our gross domestic product on an annual basis is represented by overseas debt, compared with a figure of 13 per cent in the Unite States of America'. That figure should be emblazoned on the consciousness of every Australian, irrespective of his or her politics, who is concerned about the economic future of this country. What also should be emblazoned on the understanding of those same Australians is the fact that that figure has doubled in percentage terms over the past four years. In June 1983 it was 21 per cent of gross domestic product; it is now 41 per cent of gross domestic product. Those simple and unassailable facts are sometimes forgotten and sometimes ignored, in particular by the Treasurer and members of the Government as they shower themselves in self-praise about their alleged economic achievements. The attitude of the Government regarding the 1987 Budget was best summarised by none other then the Treasurer himself when he was interviewed on The Midday Show of 18 September. The Treasurer's words bear remembering at this time when he said: `This is the great coming of age of Australia. This is the golden age of economic change'. He was then asked: `How much credit do you take?' The Treasurer replied: `Oh, a very large part'. That was the end of the interview. If ever an exchange symbolised the besetting risk of this Government's economic approach, it is the supreme arrogance of the Treasurer as epitomised by that remark. A Treasurer should have a proper understanding of the economic condition of this country. Realising that we are staring in the face an overseas debt which is 40 per cent of our gross domestic product and remembering that the Argentinean foreign debt in 1982 was only 29 per cent of gross domestic product and that the figure for the United States is only 13 per cent, we get some idea of the arrogance that besets this Government. Indeed, that is one of the mortal fears of the Opposition-and, I suspect, a growing number of the Australian community-that this Treasurer and this Government do not recognise that for a long time we have lived with policies that have taken the Australian economy to the edge of risk, that we have lived with policies that have responded too slowly to the need for economic change. The relevant question to be asked in the wake of the enormous upheaval on world stock exchanges is not whether or not Australian stock exchanges should have fallen, although some will ask why it is that our fall was significantly greater than that of Wall Street and most other major exchanges. That is not the fundamental question to ask because no one could fairly say that government policy could have prevented a world collapse of stock markets from spreading to Australia. The fundamental question to ask ourselves is whether the policies that are being followed at the present time are forcing the pace of adjustment in the Australian economy quickly enough and whether they are firm enough and making the Australian economy lean enough to minimise to the extent possible the impact of external shocks on the Australian economy. The measure of effectiveness or otherwise of an Australian government of any political complexion in relation to its response to world economic adversity is the extent to which its domestic policies either speed the impact of that adversity or in fact slow it down. Our argument all along has not been some naive, simplistic approach addressed to the proposition that because this happens overseas does not mean it will not have an effect on Australia. Of course it will, and governments before this Government have had to contend with adverse international economic developments and governments beyond this Government will have to contend with adverse international economic developments. But our complaint, our concern-and I believe this week the growing concern of a significant number of people in Australia-is that just as this Government and this Treasurer sat on their hands for 18 months from the beginning of 1985 until well into 1986 and did nothing about our deteriorating economy, they are going to do the same thing again. This is the Treasurer who authorised an approach to the Australian Conciliation and Arbitration Commission in March of 1986 to support the 3 per cent superannuation claim knowing full well that his own Treasury had warned him six months earlier that we were facing a downturn in the terms of trade. Did he mention the downturn in the terms of trade in March 1986? Of course he did not, yet he would now seek to tell all of us, to tell the Australian public, that the main reason that the Australian economy has suffered adversity over the past couple of years is that downturn in the terms of trade. Our concern is that he will sit on his hands again and he will not recognise that one cannot live in the fool's paradise of imagining that some adjustment to economic policy might not be necessary as a result of the convulsions of the past few weeks. We argued that that change was necessary before those convulsions. We said that the 1987 Budget took the Australian economy to the edge of risk. My colleague the Deputy Leader of the Opposition (Mr Peacock) has argued regularly over the past couple of months that the pace of adjustment of economic policy has not been rapid enough. All of those things were said before the events of the past couple of weeks and they were said again when we had that unexpectedly large current account deficit figure last Friday week, the largest September current account deficit in Australia's economic history. What is the response of the Treasurer? It is to say that anybody who raises the possibility of economic change in the face of events of the past couple of weeks is indulging in panic. Let me remind him that his own colleague the Minister for Industrial Relations (Mr Willis) is not a very happy member of the Hawke Government at present. The poor old Minister for Industrial Relations worked for two years on trying to get his Hancock legislation up and then it was grabbed away from in front of him immediately before the election. A great debate is going on inside the Government as to whether it will be brought back. He is not a very happy member because he has had most of his marbles stolen by either the Treasurer or some other members of the Government. This is what he had to say on 23 October: `Well, no one is suggesting that wages should be tied to the stock exchange. Simply, what we looked at in the middle of this week was the collapse of stock exchanges around the world, and including Australia, with very large reductions in share prices with unknown ramifications for the real economy'. He went on to say, `I mean the whole array of effects could be very considerable and at this stage we have no idea of where it is all going to end'. That was the summary, that was the thrust of what the Minister for Industrial Relations was saying. We say to the Government very simply and very quietly that the first thing that it ought to do is to abandon its unambiguous support for an across the board wage increase of 1.5 per cent. In the present economic circumstances one cannot support an unambiguous approach to the Arbitration Commission which says one supports that 1.5 per cent increase. There can be no justification for that. Wage increases based on productivity gains, wage increases that are earned, can be supported, but that kind of open-ended commitment to an across the board increase cannot be supported. Secondly, the Treasurer once again with his supreme arrogance says, `Oh, the downturn of the last few weeks is not going to have any impact at all upon the Budget revenues'. We will wait and see about that. We will wait and see whether the confidence that the Treasurer displayed on that occasion is borne out. We wonder whether he is right or whether Syntec Economic Services Pty Ltd is right. Mr Cleeland —Oh! Mr HOWARD —If the honourable gentleman opposite does not want to rely on the statements of the Opposition, let him rely on the statements of Alan Wood of Syntec on 21 October, when he said: The deficit could, of course, start to blow out in this setting unless the Government does do some further adjustment because of the losses on the revenue side, which potentially are quite large. He said further: What that crash in world markets has done is make that strategy irrelevant. We now have to go to a strategy of much more rapid adjustment in order to try and minimise the impact of this very severe external market crash on us. That sentiment, expressed by Alan Wood of the Syntec organisation, is a sentiment that is expressed widely throughout the business and economic community at present. Members of that community are now saying to the Treasurer that he needs a faster pace of adjustment, that he should change his approach to wages policy and that he should put himself in a position to tighten fiscal policy further. I would add to that the need for a further relaxation, not a further tightening, of foreign investment restrictions. The events on the stock market over the last couple of weeks have demonstrated how knee-jerk and short-sighted was the Treasurer's decision to impose foreign investment restrictions on real estate acquisitions. He did it in the name of allegedly taking the top off the Sydney property market. The crash on the stock market has contributed to that in a far more direct way, which illustrates what a short-sighted decision that was. I say to the Treasurer that now is the time to relax further, not to tighten, foreign investment restrictions. The fact that the honourable member for Calwell is smiling in disbelief at what I say strengthens my conviction that what I have said is absolutely correct. Dr Theophanous —You have nothing to offer; that is why. Mr HOWARD —He is going off like a two-bob watch. That is absolutely terrific. Mr Deputy Speaker, I take you back to what I said at the beginning of my remarks; the besetting characteristic of this Treasurer and this Government as far as their management of the Australian economy is concerned has been a supreme smugness and a supreme arrogance. They demonstrated it from the beginning of 1985, when it was plain for anybody who looked that major adjustment to the Australian economy was necessary after the Australian dollar began to fall. It took them 18 months to make those adjustments. We say to them now that their Budget strategy was too complacent and that the vulnerability of the Australian economy to external shock has been revealed quite graphically by the events of the past few weeks. If the Treasurer imagines that he can proceed, as he indicated at Question Time, on the assumption that no adjustment to economic policy is necessary, he is living in the fool's paradise that his language suggests. Mr KEATING(Blaxland-Treasurer)(3.13) —The title of this matter of public importance, coming from the honourable member for Bennelong (Mr Howard), defies belief. It reads: The urgent need to recognise the vulnerability of the Australian economy to sudden shifts of world economic sentiment. What is the most sudden shift in world economic sentiment and conditions to have affected this economy in the last decade or so? The answer is the massive slide in the terms of trade in commodities between 1985 and 1986. Who was in charge of the Australian economy for most of the last 30 years and left us exposed to that vulnerability? Who was in charge of the Australian economy in the seven years up to 1983-- Opposition members-Oh! Mr KEATING —No wonder honourable members opposite groan. They ought to be too embarrassed ever to put these words on paper. Who was running around talking about the quarterly publications showing the billions of dollars going into community projects? Do honourable members opposite remember those lists which came out? We heard phrases such as `The overvalued exchange rate cutting the heart out of the manufacturing sector; and the then Secretary to the Treasury, who is now the Opposition's finance spokesman, was running around saying that we needed more imports. The fact of the matter was that those opposite had a disastrous fiscal policy. Under them wages blew out by 15 to 20 per cent and Australia's competitiveness languished to its lowest levels ever. Yet we have the affront and sheer hide of those opposite who speak about the urgent need to recognise the vulnerability of the Australian economy to sudden drifts in world conditions. The biggest shift in world conditions occurred when commodities let us down. But who left us wholly in the commodities basket and destroyed our secondary industry and our secondary structure? It was the Liberal Party of Australia and the National Party of Australia. With terms of trade far more advantageous than those which we enjoy today, they left us with the biggest recession since the Great Depression, the first negative growth in 30 years, double digit inflation, double digit unemployment and the biggest fiscal imbalance in our history. Yet Opposition members talk about vulnerability. They should slink away and hide for a couple of decades after such a performance. But no, the Leader of the Opposition (Mr Howard) comes back, as only an Ash Street Liberal can do. He bounces back like a Jack-in-the-box saying that there is an urgent need to recognise the vulnerability of the Australian economy to sudden shifts in world conditions. The very essence of everything which the Government has been about since 1983 has been to claw back Australia's economic sovereignty and to take control of its own events. The No. 1 legacy of the previous Government was our extreme vulnerability to international economic conditions without the capacity to fight back. The very theme of everything which the Government has been about for the past five years has been seeking to restore that competitiveness and to diminish that vulnerability. The point is trotted out incessantly by the Leader of the Opposition that in the 1984 Budget documents there was some reference to a modest decline in the terms of trade. He pounces on that and says that we should have seen it coming. He says that we should have foreseen the oil price fall in November 1985 from $27 to $9, the flow-on consequences to the coal industry and the collapse in grain markets and base metals. It was a terms of trade fall that the world has not experienced in a long time. It put the absolute level of the terms of trade for Australia and other developing countries which sell commodities at the lowest level since the Great Depression. When we put together the 1985 Budget, Budget Statement No. 2 contained a reference to a further decline in the terms of trade-meaning something greater than the trend decline of one per cent, but not the 16 per cent variety we experienced followed by the rapid shift of policy which occurred in 1986. To pretend that that was all apparent in early 1985 is the height of dishonesty. But that is the argument which is trotted out. We hear all that without one reference whatsoever to the fact that in the last election campaign, just a few weeks ago, the person who now says that we ought to be lifting Australian competitiveness and making economic adjustments said that the best way we could fix the fact that our national income had been cut to pieces was to lift our living standards by paying ourselves more through a tax cut. Only a Liberal could say that in July and say what he has said today in October. Only a Liberal could run around the country during an election with dollars falling out of his hands and pockets, trying to slip over those in front and, having come a gutser, say in October, `The Government is not making the economic policy adjustments'. And it had a $6 billion unfunded tax cut. There was also that deceitful, dishonest stuff about supply-side incentive effects when the supply side, the Laffer curve stuff, blew the fiscal policy of the United States to pieces. It is that fundamental imbalance which is causing this shake-out in the stock markets of the world. The very essence of that policy was the hallmark of the Liberal Party's election campaign speech of July. The Leader of the Opposition might think that he lost that one, that it was just one over the shoulder. He might think that he gave it a try; he threw a decent economic policy to the four winds, made a lunge for the line and missed. But there is a cost-that is, the credibility of honourable members opposite has had it. If one travels around the rest of the world-does the rounds of Wall Street, the City of London, and Frankfurt, to see what they think of honourable members opposite-one finds that they think honourable members opposite are a joke and that they have no economic respectability left. They are regarded as a party of fools, which is what they are. The fact is that honourable members opposite are now saying to us, `You've taken our Budget imbalance from $10 billion to zero, but it is not enough'. They are saying, `We left you with a $10 billion imbalance, but zero is not good enough'. The audacity and indecency of that statement are startling. Let me say also that the Leader of the Opposition made the fatal mistake of referring in my presence to a couple of quotes by Syntec. Syntec has been wrong for 4 1/2 years. For 4 1/2 years it has been saying, `The dollar will collapse; the fundamental policy imbalances are there; wages policy won't hold together; the accord will fail'. It is more of the same stuff and it has gone on for 4 1/2 years. I almost take the argument by Syntec for a further shift in policy as an endorsement of the Government's position. Working on the basis that it is invariably wrong, one can take the converse view that we are therefore right. That has been the position. How clever is it for doomsayers to write, `The world as we know it will end. The sky will fall on you. The accord will fall apart. The Government won't have the courage. The Parliamentary Labor Party will overhaul the rationalists in the Cabinet'. It has been going on for 4 1/2 years. One would think that Syntec would get sick of writing that muck; but it writes it, week in, month in, month out. The Leader of the Opposition should not talk to me about Syntec. As far as I am concerned, I put the dunce's cap on its head, and very fast. Let me make another point about the major problem; that is, the imbalances of the rest of the world-the United States budget imbalance and the trade imbalances of the United States, Japan and Germany. I have been making this point for 18 months-at the Organisation for Economic Co-operation and Development meeting in 1985 and at the International Monetary Fund meeting in 1986. I have also discussed it in the meetings I have had with finance Ministers around the world. I have made the point that until the G5 or G7 get their act together and have decent policy co-ordination to deal with the trade surplus of Japan, the current account deficit of the United States and the budget deficit of the United States, at some stage one of these markets would fall out of bed, be it the bond market or the stock market. In the end, we could not resort to private savings to finance the current account of the United States and its budget deficit. Every time I have said that, I have been attacked by the Opposition for gratuitously giving advice to others, when it failed to comprehend that the very essence of the incorrection of these imbalances would lead to this kind of condition. We are now seeing these changes occur. I am not being wise after the event; this was said nearly two years ago, and it has been repeated. This Government has made the corrections. The same fiscal policy action should occur in the United States. Japan should open up its country to imports. Japan is now rapidly adjusting its industrial structure to deal with a cross rate of 125 to 130 yen to the dollar. In other words, it is adjusting to maintain the imbalance. It is not dealing to adjust to open its country to imports to pull the imbalance down; it is adjusting to maintain that. The United States has been taking all the adjustment on the exchange rate and none on fiscal policy. Of course, with that comes the implication for inflation and interest rates. In the end, this position had to arise because of this policy inaction and the fact that the group of five was unable to get its act together. In the case of the United States, the rest of the world will try to accommodate its economic condition because it is so vast, but no one will do that for us. It means that we have to be competitive and we have to maintain our competitiveness. That is why we have rapidly changed fiscal policy. That is why we have rapidly changed wages policy. That is why we are continuing to keep up, by way of these microeconomic changes, the efficiency and productivity of the Australian economy, so that, no matter how the world looks, we will be better able to cope with those conditions, eke our living out of the world economy and world trade, and take a larger share of it. That is the essence of where the Government stands and of its policy. It has kept that up. I wrote down the quotation from the Leader of the Opposition saying that the Budget deficit was a risk strategy. Taking the Budget deficit from 3 per cent of gross domestic product to zero in 18 months is a risk! In other words, it should have gone to a massive surplus. That is what he is arguing. We should have gone from 3 per cent to a big surplus in 18 months; zero was not enough for him. A 10 per cent decline in real unit labour costs over four years is passe-from the man who blew wages to pieces and, with that, the inflation rate. The fact is that there is a thing in this world called credibility. It takes a long time to build it up; it is hard. One gets the points slowly. But those opposite blew it out of the door; it has gone. The honourable member for Bennelong is having a grin at me, a little laugh, a titter, and a mutter; a little nervous giggle. But the fact is that his name is mud where it matters, in these international forums. Opposition members should not think that these days, with the internationalisation of our economy, news services and everything else, they can behave in the way that they have and it will not be noticed. Those concerned overseas have got the Opposition pegged. The fact is that this Government will never be complacent about economic conditions. As I said today, we will maintain our vigilance in terms of the import of these changes, but we will not be panicked or rushed into mindless policy changes which may not be appropriate. As I have said, there will not be any change to fiscal policy through to the end of 1987, and the extent to which the Government again takes up for a fourth time an option of foreshadowing changes in May to outlays, and to receipts for that matter, if it sees fit, is entirely a matter for some time closer to then and when we can get some better understanding of the impact of these changes upon the rest of the world. But again, for the Opposition to be putting forward a motion in terms of the urgent need to recognise the vulnerability, is to repeat the theme of the Government for the last five years. The very essence of what the Government has done is to internationalise the place and try to make it internationally competitive. For the Opposition to try to put me in the position of defending our policy when 10 weeks ago its members were running around at an election with a $6 billion unfunded tax cut is just a joke. I conclude on the point by saying that we on this side of the House take nothing cheap. We will watch with vigilance the changing conditions in the world economy flowing from this collapse in capital values on the stock market. We will continue urging the G5 countries to make fundamental adjustments to remove these imbalances so that we can keep world trade growing, keep the financial system properly funded at this time, and then comprehend what changes, if any, we need to make. Dr HARRY EDWARDS(Berowra)(3.28) —The Treasurer (Mr Keating) says that the terms of this motion are essentially what the Government has been saying over the whole period of its office. It may be what the Government has been saying, but it is not what it has been doing. That is what we are urging that the Government should change. In addition to that, we have heard the usual stuff from the Treasurer about the great slide in the terms of trade. What is new? That has been on for the last 25 to 30 years. We have heard again about the massive deficit that the previous Government bequeathed to this one. It would have been $5 billion at most; yet this Government brought in a deficit of $8 billion that year, and nearly $7 billion in the next year, a cumulative series of Budget deficits which sowed the seeds of the massive imbalance in our balance of payments, which I shall be addressing shortly. We heard also the usual stuff about the destruction of Australian manufacturing. I only remind the Treasurer in that regard that the car industry plan on which the Government sets such store is essentially, with its centrepiece, export facilitation, that which was foreshadowed by the previous Government for post-1984. In a moment I will come back to some of his comments on the United States of America, Germany and Japan and the world economy. It ill becomes him to attempt to preach to other countries. But we are not dealing at the moment with the state of the world economy; we are debating the vulnerability of this economy under the stewardship of this Treasurer and the Hawke Labor Government over 4 1/2 years. Mr Aldred —How long? Dr HARRY EDWARDS —Four and a half years. The Treasurer continues to talk as though he has suddenly taken over a bad situation. This Government has been governing for 4 1/2 years. It is the Government under which Australia lost its AAA credit rating. It is the present vulnerability that we wish to debate. The starting point, of course, is how vulnerable we are in terms of our balance of payments-the vast, persistent, intractable balance of payments deficit. For the month of September, just concluded, our spending on imports and the payment of interest on our vast overseas debt exceeded our receipts, our earnings from exports, by $1.3 billion. Mr Hunt —This didn't happen in '29. Dr HARRY EDWARDS —It certainly did not. We are talking about $40m extra that we are in hock every day-since this time yesterday we have moved an extra $40m into hock, and Government members laugh about it-contributing to our vast overseas debt, which has built up under this Government from a gross figure of $29 billion to over $110 billion. In all the years to 1983 the debt built up to $29 billion, while this Government has caused that to increase to $110 billion, with the effect that the payment of interest and the necessary capital repayments take about $1 in every $3 of our export earnings. It is a great element of rigidity and a great burden on future generations. Why we are so vulnerable is that with this deficit in the balance of payments of $12 billion to $14 billion we have to attract capital inflow and rely on the sustained confidence of the international financial markets. What policy response has the Government adopted to which the Treasurer refers? It is not denied, as he has argued, that that policy in recent years has broadly been in the right direction, at least in some respects. But the right direction is one thing; what is important is the strength and the magnitude of what is being done. We have had a continuous record of too little, too late to match the seriousness, the entirely critical situation, of our economy. As the Leader of the Opposition (Mr Howard) and the Deputy Leader of the Opposition (Mr Peacock) have pointed out, the pace of change is what is at issue. The Government is not pressing on with the strength and vigour that the seriousness of the situation requires. It needs to be understood by the Australian people-the Government's own economic body, the Economic Planning Advisory Council (EPAC) has stressed this-that it is necessary to have a disciplined fiscal policy, that is, to really do something about excessive government spending, to take a tough line on wage and salary increases, and to have a continuing favourable international environment, particularly an expansive one, just to stabilise our overseas debt, not to get it down, at around 40 per cent of gross national product, and over five years. Yet we get the phoneyness and dishonesty in the recent Budget; a patina of fiscal rectitude covering a very brittle and exposed economy. We were supposed to get a balanced Budget. We know that is an illusion. As has been pointed out by this side of the House, allowing for asset sales and other factors, we have a deficit of the order of $2.5 billion to $3 billion. The Leader of the Opposition has pointed to a further possible deterioration. We were supposed to have got the greatest cut in government spending in 35 years. Mr Hunt —A con trick. Dr HARRY EDWARDS —It was a con trick indeed. This great cut of upwards of $3,000m included $1,000m in cuts to the States. I do not necessarily disapprove of that. It included $1,000m in asset sales. What a tortuous use of the language it is to say that the sale of the Tokyo land and the Paris Embassy and such like constitutes a cut in expenditure! Yet that is how the Government has shown it in its books. In respect of the balance, we have a situation where, in the areas of the Government's direct responsibility, we have some cuts from the Forward Estimates but projected expenditure for 1987-88 which will actually exceed, in real terms, that in 1986-87. What expenditure restraint and what tax reform, what reduction has really been achieved in the domestic and overseas debt as was so trumpeted by the Treasurer! The whole thing was a phoney exercise. The other major area of concern for our vulnerability in this increasingly uncertain international climate is our rigid and inflexible wages and industrial relations system. The current national wage case, focusing on the 1.5 per cent further increase in the second tier of this so-called two-tier system, was, it is true, postponed last week. But we had a very relaxed answer from the Minister for Industrial Relations (Mr Willis) today to a question from one of his own backbenchers about what attitude the Government would adopt. What is needed is a firm affirmation that that increase is not on, that it must be deferred at least. In the context of the head of steam that we have in the so-called productivity based wage increases, we will be heading for a rate of wage increase in this country something like double that of our major trading partners. In that area and in the area of industry policy, we get from the Treasurer, as we got in his speech, lip service as to what should be done but no real action. In preaching to the world economy, as the Treasurer has indulged in today, he should look to the Japanese example in the areas to which I have just referred. We have seen a suppleness in Japan's economy in recent times which is nothing short of microeconomic magic. When we look at the problems of the world economy we see Germany and Japan, two countries with huge appreciations of the exchange and huge trade surpluses, balancing the American situation. But in that context, despite the appreciation in the Japanese exchange rate, industrial output has increased and exports are set to increase in such a way that, whereas people were looking for an end to the Japanese miracle, they will see yet another miracle. That is what we need to see. A key element in the Japanese performance is the flexibility of its wages system. So the Treasurer needs not so much jetting around the world economies but more concentration on the critical tasks here, not only in overall macroeconomic policy-although that is very important as I have pointed out-but in these other microeconomic areas, particularly the areas of labour and industry policy. Mr ROBERT BROWN(Charlton)(3.38) —The degree of cynicism behind the matter of public importance raised by the Opposition is almost unbelievable. For a coalition now in opposition to bring forward a matter of public importance expressed in the terms in which it has expressed this matter indicates that it learnt nothing in the period it was in government. The first part of the matter of public importance is something with which we would take no issue. That the Australian economy which, quite clearly is integrated with the world economy, is therefore vulnerable to the world economy is not only a position that we accept but also a position to which members of the Government-the Prime Minister (Mr Hawke), the Treasurer (Mr Keating) and other spokesmen for the Government-have drawn attention. The second part of this matter of public importance refers to sudden shifts of world economic sentiment. That is the sort of expression that is used by people who do not know how to express what they want to refer to. It does not mean anything. The matter of public importance we are debating today is: The urgent need to recognise the vulnerability of the Australian economy to sudden shifts of world economic sentiment. What in heaven's name does that mean? I would like to emphasise that the Government is not concerned about shifts in world sentiment, but the Government certainly would be concerned with shifts in matters of world substance. We would be concerned and are concerned about shifts that take place in the world with economic growth, employment, inflation, interest rates, capital flows and exchange rates. We are concerned about issues and matters of that kind. But concerned about world economic sentiment-I do not even know what it means. It is a new concept which has arisen from the Opposition. On the Opposition side we have no fewer than two former professors of economics, one of whom just made the second contribution to this debate. He had sitting alongside him as his guide, counsel and mentor, his colleague, the other economics professor from the Opposition. I am waiting for the dean of the faculty to arrive; then perhaps we will have the development of some economic policy of substance on the part of the Opposition. One of the matters to which the honourable member for Berowra (Dr Harry Edwards) referred in his contribution-he was repeating similar comments to those that were made by the Leader of the Opposition (Mr Howard)-was whether or not this Government was exercising a sufficient degree of fiscal responsibility. Those opposite have remarkably short memories. Why should they not? Their Budget deficit in 1981-82 was $500m. The next year it had blown out to $4,500m. What did we inherit in prospect-a Budget deficit of $9,600m, almost $10,000m, and these are the people who suggest that we should be exercising some degree of fiscal responsibility. In five Budgets we have reduced a Budget deficit, which was $10,000m in prospect, to a Budget deficit of $27m. The Treasurer has just come into the chamber. He should take the credit for that; he should take the compliments of this nation because that achievement was nothing short of incredible. The honourable member for Berowra, in his more honest moments, would admit to that. It is nothing short of incredible. In five years, despite the enormous problems of economic adjustment and in spite of the enormous structural problems that this Government inherited in 1983, it has been possible to turn that situation around completely. As the Treasurer said on numerous occasions in the financial forums of this world, people from other leading countries-responsible, competent and capable spokesmen-are impressed with the achievements that this Government has been able to make. On more than one occasion the Treasurer, quite correctly, has referred to the fact that if the United States of America were to exercise in its own budgetary approach the type of fiscal discipline which has been sought and achieved by this Government in this country, the problems of the world would be significantly diminished. If the countries with which we trade had been able to achieve a rate of development that this Government was able to achieve after negative growth under the previous coalition Government-an average of 5 per cent for the first three years; twice that of our trading partners-the problems of the world today would be significantly diminished. This Government had to gear back on that rate of growth because of the problems that domestic growth was posing for our external balance. We had to gear back the rate of growth that we had achieved. What we should have been saying and what we were saying to the rest of the world was, `Unleash all of those fetters you have on the potential, the productive capacity, that your countries have and allow your own domestic economies to realise their internal potential'. Had they done that, we would have still been experiencing and would have still been able to experience rates of growth of the kind that we initially achieved. When members of the Opposition talk about the situation that we face in Australia at present, I think what we need to do is to continue to remind them of the fact that when we came to government in March 1983 we inherited an economic desert, an economy which had been devastated as a result of the absurd, inconsistent and inadequate policies which they had been adopting. We had massive unemployment-10 1/2 per cent unemployment, representing 750,000 people-growing at the rate of 250,000 every year. We had double digit inflation of 11.5 per cent; we had negative growth for the first time in 30 years; and we had manufacturing industries which had been devastated by their artificially overvalued Australian dollar which brought such a flood of imports into Australia that industries in Australia were smashed against the wall. Factory after factory and company after company had been literally smashed against the wall. When we came into government there was no manufacturing potential. We had widespread and growing poverty with the result that one person in every five, including 800,000 children, were identified in Australia, with all its magnificent potential, as living in poverty. Members of the coalition now try to teach us. The Australian people rejoice in the fact that we reject their advice. Those opposite have learnt nothing. We also had record levels of bankruptcy; shattered confidence; a blow out, as I have indicated, in the Budget deficit; and an over valued Australian dollar which was responsible for our industry being devastated. In the period that the Hawke Labor Government has been in office, the results have been nothing short of spectacular. After 1975 there were seven years when the coalition Government had the opportunity to put into place effective and constructive policies that could have brought about a restructuring of the Australian economy and could have provided the basis for significant and continuing growth that would have been of continuing benefit to this and future generations, and they blew it! They were seven lost years as far as the potential of this country was concerned. In 4 1/2 years we have turned it about. There is an air of confidence in the Australian community. We know that while the difficulties are there, they have been squarely and fairly faced and the policies have been put into place to deal with those issues. Of course, the Australian economy is vulnerable, but we must have an economy which is structured properly, an economy which is flexible and capable of responding to all external shocks. We have such an economy now; we did not have it before. Mr DEPUTY SPEAKER(Mr Leo McLeay) -Order! The honourable member's time has expired. The discussion is concluded. Public Works Committee Act Mr WEST(Cunningham-Minister for Administrative Services)(3.48) —I move: That in accordance with the provisions of the Public Works Committee Act 1969, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report: Construction of new telephone exchange building at Charlotte Street, Brisbane. The proposal is to construct a new telephone exchange building at Charlotte Street, Brisbane for Telecom Australia. The proposed building will provide local customer requirements for the southern sector of the central business district. It will also support a wide variety of telecommunication services and provide equipment and other network facilities throughout the central business district of Brisbane and the State of Queensland. The new building will be medium rise and will contain a basement, ground floor, office and amenities floor, eight telecommunications equipment floors, plant floor and roof plant area with a satellite dish antenna area. The proposed construction timetable indicates a construction time of 20 months, with construction scheduled to commence in mid-1988, subject to parliamentary approval. The limit of cost estimate for construction of the telephone exchange is $20m at July 1987. I commend the motion to the House and table the plans. There will be an opportunity for the Public Works Committee to examine this proposal thoroughly, as it is certainly my wish and I hope the wish of the Opposition. When its report comes to the House, we will be able, if we so wish, to move an expediency motion and at that time, if the Opposition wishes, it can discuss the matter in detail. Mr PORTER(Barker)(3.51) —The Opposition welcomes this reference to the Public Works Committee of the new telephone exchange in Brisbane, but a couple of points need to be made. Firstly, this is the first reference in this Parliament to the Public Works Committee. We have had before the Parliament two other motions seeking declarations of urgency in cases where the Opposition raised genuine concerns about the avoidance of the referral to the Public Works Committee. They were in relation to the purchase of survey vessels to survey the northern coast of Australia and the upgrading of work for the Jindalee. They were two defence contracts, and in those instances, the Government sought to avoid reference to the Public Works Committee and had the matters declared urgent. Therefore, they were not referred to the Public Works Committee. At that time, we expressed our concern both in relation to those two projects and, generally, that they should not become the rule but rather, these matters should be referred to the Public Works Committee, which, as the Parliament has already indicated, has a specific role in relation to construction activities. Therefore, we welcome this reference and I refer the Public Works Committee to the recent building undertaken by Telecom Australia in South Australia. Certainly, in that instance-- Mr DEPUTY SPEAKER —Order! The honourable member for Barker has adverted to a couple of other matters that he thought should have been brought before the Public Works Committee and is now speaking about another building being constructed by Telecom. He should probably address his remarks to the particular reference before the House, which is the Telecom building in Charlotte Street, Brisbane. Mr Lloyd —But it is a friendly exchange, Mr Deputy Speaker. Mr DEPUTY SPEAKER —I thought that I had been more than lenient with the honourable member for Barker. Friendly exchanges with the Deputy Leader of the National Party are always welcome but, in this case, irrelevant. Mr PORTER —I will not take up the time of the House for very long, Mr Deputy Speaker. I was saying that I would urge the Public Works Committee, in relation to this reference, to take account of what has occurred in Adelaide, where a similar facility-surely, Mr Deputy Speaker, the relevance is clear to you-is in the process of being completed, and there are some significant cost overruns in relation to that project as a result of changes to the design of the building that were undertaken after the original design was approved. What I am saying is that, as this matter is being referred to the Public Works Committee, the Committee should take into account what has happened with the most recent building that Telecom has erected, in Adelaide, to ensure that the same sorts of problems do not arise if it agrees that this building ought to be built in Brisbane. Surely that is relevant and pertinent to this reference to the Public Works Committee. I say again that the Opposition supports the reference, and we look forward to the Public Works Committee report. Question resolved in the affirmative. Debate resumed from 18 September, on motion by Mr Peter Morris: That the Bill be now read a second time. Mr DEPUTY SPEAKER(Mr Leo McLeay) —I understand that it is the wish of the House to debate the Fishing Industry Research and Development Bill 1987 concurrently with the Fishing Industry Research Amendment Bill 1987 and the Fishing Legislation Amendment Bill 1987. There being no objection, I will allow that course to be followed. Mr LLOYD(Murray)(3.55) —The purpose of the Fishing Industry Research and Development Bill 1987, the Fishing Industry Research Amendment Bill 1987 and the Fishing Legislation Amendment Bill 1987 is to strengthen the powers of fisheries inspectors under three existing Acts, to formalise fishing industry research under the Rural Industry Research Fund guidelines and to use surplus moneys from the existing Fishing Industries Research and Development Trust Fund to assist in the purchase of a new fisheries research ship for the Commonwealth Scientific and Industrial Research Organisation (CSIRO). These Bills were actually presented to the House of Representatives prior to the dissolution of Parliament for the July election, and reached the Senate, but there was no resolution there in time, and hence the Bills are back here again before Parliament. To my understanding, the only differences to this legislation and the situation generally with that legislation is, first of all, the more definitive proposal for the research ship, in relation to what was being discussed and proposed earlier and, secondly, the heightened concern in the fishing industry over the additional charges and levies forced on the industry in the recent Budget. First of all, the Fishing Legislation Amendment Bill makes administrative and procedural changes to the Continental Shelf (Living Natural Resources) Act 1968, the Fisheries Act 1952 and the Torres Strait Fisheries Act 1984. It is claimed that the Bill will streamline administrative actions in preparing notices containing prohibitions against certain activities within the fisheries covered by the Acts. It widens the powers of fisheries officers to search vessels or motor vehicles-in some cases this can be done without warrant-or enter land or premises, and tightens rules governing undersized fish catches. At the same time, provision is made for fish caught undersized or otherwise contrary to the Acts to be returned to the sea promptly, without penalty. I am not sure whether that penalty applies to the fish or to the person who caught the fish-it is a little hard to return a fish without penalty. Because the Bill does extend powers of enforcement, and those powers of officers other than police officers, there is legitimate cause for concern by members on both sides of Parliament about legislation that, in any way, encourages or allows police powers to be used by officers other than those duly constituted for the enforcement of the well-being of the country and in the correct way. I have been advised that these particular additional powers were considered and approved by the Senate Standing Committee for the Scrutiny of Bills prior to the dissolution of Parliament for the election. The point should be made that, irrespective of whether a member of parliament is in the House of Representatives or in the Senate, he should have similar concern for the question of the powers of the individual versus the powers of officers, whoever those officers may be. I have no doubt that this will be considered again in the Senate. I am also aware of the particular problems of enforcement that can occur with fisheries and therefore of the need for powers for fisheries officers to ensure that the management of those fisheries is conducted in the appropriate way. The Fishing Industry Research and Development Bill and the Fishing Industry Research Amendment Bill maintain the industry's research effort, but establish an administrative framework which closely resembles the rural industry research fund guidelines. A Research and Development Council is to be established to replace the current Fishing Industry Research Committee and it will comprise an independent chairperson, a Government member and three to seven representatives with industry expertise. Those with industry experience will be appointed by a selection committee comprising an independent chairperson-or chairman in my terminology-a member with experience in fisheries administration or management, a member experienced in fisheries research and development, a member nominated by the Australian Fisheries Council and three members nominated by the national Fishing Industry Research and Development Council. I understand that the industry supports the changes and in fact is anxious that the new research arrangements be put in place as quickly as possible so that the allocation of research priorities for the next 12 months can come from the new committee rather than the old committee because there is a belief and a hope in the industry that perhaps the priorities for fisheries research under the new arrangement will be more commercially based or commercially oriented than was the case in the past. The research committee will produce a five-year plan for research and development plus annual operating programs-the usual procedure. Unlike the other research arrangements with regard to primary industry commodities, no direct levy is placed on fishermen and then matched dollar for dollar by the Commonwealth Government. Because of the nature of the industry and the levy structure, the Commonwealth will be matching on a dollar-for-dollar basis up to one per cent of the gross value of industry production. Those matching funds are provided from State revenue rather than, as I said earlier, directly from fishermen-although it would have to be acknowledged that the States themselves as well as the Commonwealth collect levies and therefore the industry can claim that it is playing its part in the provision of levies or money for necessary research. As I said earlier, the further development in regard to the legislation that went through this House some months ago is that the Government has now decided to use the surplus funds in the old research account to acquire a new research vessel for the CSIRO Division of Fisheries Research. I have been advised that at present there is about $6m in that account and that it will be put towards the cost of the new vehicle which could be as much as $15m to $20m. The present fisheries research vessel used by the CSIRO, the Soela, is leased from Kailis and France. There is no criticism from the industry or the Opposition about the need for a new research vessel, or for that matter more than one vessel when one looks at the area of potential for fisheries development in this nation and therefore the physical impossibility of one ship covering the area that needs to be covered for this purpose. However, there are two areas of concern: first, the lack of consultation in relation to the new vessel and, secondly, the general concern as to whether or not the CSIRO should be a ship operator as part of its responsibilities. From a cost-benefit point of view and from the point of view of the CSIRO being able to concentrate on what it is there for-that is, research and not the running of research vessels-serious consideration should be given to a lease or management arrangement whereby the crewing and general operation of the ship is let out to an organisation such as Kailis and France-on this previous occasion-to actually operate the vessel and then allow the CSIRO to concentrate on that vessel and for that matter other vessels involved in the research operation. However, there is greater concern in the industry in general terms over what it believes is the lack of consultation by the Department and the Government in relation to fishing matters generally, the dramatically increased levies and charges that are being imposed on the industry as a result of the Budget, and the lack of accountability by the Australian Fisheries Service of the Department of Primary Industry in relation to the expenditure of those levies from licence fees and so on that are charged on those who operate in the Commonwealth fisheries. At present there are three Commonwealth managed fisheries: the Northern Prawn, the South-eastern Trawl and the Southern Bluefin Tuna. In the Budget it was announced that the attributable cost recovery for those three Commonwealth fisheries will increase from 44 per cent last year to 60 per cent this year, to 75 per cent next year and 90 per cent in the following year. In other words, over a period of about two years the cost to those with Commonwealth licences operating in those fisheries will double from about $1,500 to $3,000 per vessel. That is a dramatic increase and the industry has really had no ability to question whether that money is efficiently spent or how it could be spent more efficiently at the present level of the licence fee rather than what is perceived to be necessary by the Australian Fisheries Service to require that significant increase to occur. In addition, there is a completely new $295 levy of which, in my discussions with the fishing industry, only $8 can be discovered at this time, that is, the $8 charged for the operation of the National Fishing Industry Council. How will the remainder of that $295 be spent, because in a full year the total collected amounts to about $1.8m? That is a significant new impost on an industry which has no idea how that money will be spent and has no ability to question or alter the level of impost placed upon it. I should also say that other levies and charges are imposed on the fishing industry at both Commonwealth and State levels. I believe that there is a great responsibility on the Australian Fisheries Service to declare how funds from the additional levy will be spent and whether or not it is an appropriate form of expenditure on behalf of the industry of this country. The Australian Fisheries Service should also say how it intends to expend the dramatically increased cost recovery percentage, because we face the same problem on cost recovery with the Department in this regard as do a whole range of primary industry export products with cost recovery on export inspection. It is a very nebulous statement that 50 per cent, for example, of the cost is attributable to export inspection cost recovery, because it is 50 per cent of what cost? That has never been identified. There is no budget for it and there is no list on it. I believe that it is a completely unfair situation for any industry to be required to pay 50 per cent of export inspection charges or 90 per cent of cost recovery on Commonwealth managed fisheries without ever being able to check and debate and, if necessary, alter what that actual magical 100 per cent is. I have been advised that, for example, one of the charges levied by the AFS is an additional 84 per cent on-cost on behalf of itself and the States for services rendered. I would be pleased to hear from the Minister for Primary Industries and Energy (Mr Kerin) in his reply to this debate whether that is a fact and, if so, how is the 85 per cent determined and, more particularly, how is it justified? I would also like the Minister to say whether it is a fact that the Australian Fisheries Service with 120 personnel is the biggest section in the Department. Is it becoming even larger with an additional 11 officers to be appointed this year? How is it that that number is necessary, particularly now that the industry is being called on to pay for 90 per cent of the costs? How does this fit with the Government's general statement of reducing the cost of the Public Service to the general taxpayers of Australia by this so-called reduction of 3,000 people? If the Department is reducing its numbers-I have heard one figure of about 156-how does that fit with the overall level of personnel in the Department? Why is it so necessary to have these additional people? I note in the statement of the Minister for Primary Industries and Energy, released after the Budget under the heading `Fisheries Management and Development Programs', he explained: There will . . . be a comprehensive review of the corporate and institutional arrangements associated with the development, implementation and maintenance of the Commonwealth's fisheries management programs. It is anticipated that the review will result in a more positive role and greater level of responsibility for the industry. I have been advised that as yet the industry has not been consulted on any aspect of that review. I would welcome in the Minister's reply a statement on the position. What are the criteria for the review? Who are the personnel being appointed to the review? What input will the industry have? After all, the industry must have every right to be fully involved in a review of what is becoming a very expensive operation to that industry. I hope that in that review far greater account is taken not only of the accountability but also of the whole principle of who should be controlling Commonwealth fisheries. Should it be a department or should it be more deregulated? I acknowledge there is a need for a control in these fisheries but it should be a more self-managed operation; that is, the industry itself should manage their operation to a far greater degree than it is allowed to now and therefore would be directly responsible and accountable for the charges placed on that industry. I believe it is essential for the industry to be given the ability to self-manage those fisheries. The industry already has an example before it. One can recall that before the dissolution for the election the Senate used its regulatory blocking power to block a most unsuitable proposal put forward by the Government in relation to surplus ships in the northern prawn fishery through an industry controlled buy-back arrangement. There is also some frustration in the industry at present in relation to that operation. There are accusations that the Department is not being as quick and as helpful as it could be to allow that scheme to be put in place. If the statement I have just made is incorrect I-and I am sure the industry-will be pleased to be advised in reply of the actual position at present. I believe it indicates in general terms the desire, the willingness, the ability of the industry to manage its own affairs to a far greater degree, particularly now that these additional imposts are being put on the industry. Nothing imposes more discipline in accountability and cost efficiency than people being forced to pay for the total-or close to the total-cost of an operation. The Opposition parties do not oppose the legislation but we do want these sincere and, I believe, significant questions that have been put by me-others will be put by other speakers-to be answered in this debate. We give notice that unless there is a significant move towards self-management within these Commonwealth fisheries that will be a high priority for the next coalition government. Mr SNOW(Eden-Monaro)(4.15) —Mr Deputy Speaker, the Fishing Industry Research and Development Bill is an important Bill for the fishing industry. The development of the Australian fishing industry under the Government has been a remarkable success because the Government has been game to make hard decisions in the fishing industry, as in many other areas of Australian government. For many sections of the industry there has been prosperity and success, not least because of the emphasis on research and development. I can recall five, six and seven years ago people coming to me with concerns, particularly for the future of the southern blue- fin tuna industry, the abalone industry and the Australian trawl industry. In the electorate of Eden-Monaro those engaged in the trawl and long-line industries are now on a profitable basis and for the first time have a secure investment. But this success, Mr Deputy Speaker, has brought its own problems to which we must now pay heed. Secure investments attract investors, and these investors are people who can now afford to buy into the industry or, to put it another way, buy out the small operators. This concerns me a lot as the fishing industry in Eden-Monaro, where almost 70 per cent of the trawl is located, is based on the small operator. Communities up and down the coast rely for their economic well-being on the continuing viability of the small locally based operators. Those who have money to buy into this now successful industry are mainly the big operators from New Zealand and a few big Australian companies which are not based in New South Wales. These large operators may put the small local operators in jeopardy and thereby the fishing communities along the south coast. So the challenge is not only to government if we are to have a viable industry; it is also to the industry itself. The small operators in particular can combat the trend to big ownership but they must be prepared to maintain a voice on industry committees which have been set up by the Government and they must be prepared on these committees to ask for government involvement. The large companies, including New Zealand interests, are in the financial position to engage highly paid lobbyists who are able to take advantage of the present encouragement by government of industry self-management. Self-management is an ideal the industry has long sought. It is important, it is helpful, but it cannot work if there is not equal representation. Recently, quite dramatic changes to the current management plan were proposed at a south-eastern trawl industry consultative committee meeting. These changes may seriously disadvantage New South Wales and the trawl industry in Eden-Monaro. But trawler owners from the south-east trawl were not represented at this meeting. It is like the southern bluefin tuna saga all over again. Fishermen need to keep a vigil and pay for lobbying even when things appear to be going well. An industry levy to ensure equal representation is one way of ensuring the fair and equitable development of the fishing industry which has been put on such a strong footing by the Hawke Government and particularly by the Minister for Primary Industries and Energy (Mr Kerin), who made decisions that the previous Government was not game to make. The Minister for Resources (Mr Peter Morris) has also shown himself to be more than capable with respect to the fishing industry. He is quickly grasping the important and complex issues of the industry, and I have great faith in his ability to maintain and develop present successes for all Australian fishing operators. I mention briefly consultations with the Royal Australian Navy, which need improving if the fishermen's concerns are to be taken properly into account. It is good to see the Minister for Defence Science and Personnel (Mrs Kelly) in the House at the moment. I make the point that currently about three-quarters of a mile of most valuable trawl waters are to be closed for minefield trials. Fishermen would like to have meaningful consultation before this occurs. I am pleased that the Minister has acknowledged this and I am confident that she will take it up with the Department of Defence. Fishermen have themselves checked alternative areas in the same vicinity with echo-sounding systems that meet the Navy criteria. The proposed closures will mean the loss of the most productive trawl areas in the region and a substantial loss of fish for the Sydney domestic market, thus creating a demand for imported fish. The result will be a substantial impact on the livelihood of local fishing operators. Obviously, development needs to take into account adequate consultative mechanisms with the Navy and any other bodies having an impact on the fishing industry. I conclude by saying that the fishing industry is urgently in need of attitudes that are oriented to a viable industry throughout Australia, not just through big owners but through the economically sensible operations of small owners. Initiatives are being taken by all sorts of firms. In my electorate, the Oceanfresh organisation has taken some amazing initiatives which I believe will result in a large degree of prosperity in the fishing sector in Eden. The co-operatives at Ulladulla and Eden and in other areas throughout Australia have also taken important initiatives. They have adapted to the times. Laurie Walker of the south-east trawl organisation has taken important initiatives. I believe that the Department of Primary Industries and Energy, through Bruce Lilburn and with its excellent resources, has shown empathy as well as sympathy and support for the industry. It is important that all operators, small and large, have a voice in representations to the Department of Primary Industries and Energy and to the Government. I am pleased to support the legislation. Mr HAWKER(Wannon)(4.22) —In speaking to the Fishing Industry Research and Development Bill, the Fishing Industry Research Amendment Bill and the Fishing Legislation Amendment Bill, I would like first to talk about the size of the fishing industry in Australia and its importance to our economy. The fishing industry is a rapidly growing industry and one that is increasingly making a very large contribution to our exports. In 1986-87 the total exports of edible fish products rose by 22 per cent over the previous year to total $591m. Of interest in the growing fishing industry is the orange roughy, fields of which have been found in southern Australia, particularly in Bass Strait and around the coastal waters of Tasmania. I will come back to that matter in a minute as it is of particular interest to me because of the growth in the number of fishing boats coming out of the port of Portland in my electorate. The fishing industry is now the sixth largest primary industry in Australia and it employs over 25,000 people. It is estimated that the growth in fish consumption in Australia has risen from 6.2 kilograms per head in 1979-80 to something like 7 1/2 kilograms per head in 1984-85, and I suspect that it is probably growing further. Looking further at the industry and its structure and at the composition of our catch, we find that about 63 per cent of the value of Australian production comes from the lobster and prawn industries and about 18 per cent comes from pearl, abalone, scallops and oysters. About 19 per cent comes from fin fish but, with the growth in the orange roughy catch, I suspect that this percentage could be increasing. The fishing industry is in some ways unique because if the harvest exceeds the rate of supply we will obviously over-exploit Australia's fishing fields, which could lead in the not too distant future to many areas being fished out. It is for this reason that sensible management practices obviously have to be followed. The Government is continuing to follow such practices. It will be interesting to see how successful they are. We hope that they are successful, of course, but it is important that those practices take account of the probability that a finite amount of fishing can be done without over-exploiting the industry. One of the encouraging signs in the fishing industry is the growth in value added products. Some of the Japanese-type fish products are being utilised more and more, particularly in the export areas. I refer both to sashimi, sashimi being raw fish, which is very popular in Japan and is gaining some acceptance in Australia, and to surimi which is made from fish products being turned into other products such as crab sticks and the processing of different types of fish into a fish flesh type of food used in very tasty dishes. These have terrific value added potential and provide a great opportunity for us to increase our exports. I said that I would talk a little about the orange roughy fields, which represent one of the most exciting developments in the Australian fishing industry and something that will add dramatically to our export income. The New Zealanders have been leading the way on the orange roughy. They are now processing something like 50,000 tonnes per annum, almost all of which is shipped to the United States of America, where the white flesh of the orange roughy is particularly well received. It is interesting to note that the acceptance of the orange roughy has even reached such hallowed halls as the television series Dallas. It was mentioned on one program a few months ago. Mr Braithwaite —It's not as good as barra, though. Barramundi is better. Mr HAWKER —Yes; barramundi is very good too. I would like to say a little about the orange roughy because it represents a very interesting development. The fish have been in our area for a very long time but the fields were not discovered earlier because they are found at a very great depth. The fish have a reddish skin colour, hence the name orange roughy, and are typically about 30 centimetres long. The size of the fields in Australia is unknown because the fish is caught at such a great depth, but recently the fishing boats have made some fantastic catches. The Government, probably as an over-cautious measure, has decided to put a limit of 20,000 tonnes per annum on the allowable catch of orange roughy until research is undertaken to show the size of the fields. Orange roughy tends to gather in large agglomerations or what is known in the local jargon as `hot spots'. These are often associated with undersea pinnacles but sometimes are on mud bottoms. They have been found off the west coast of Tasmania and around the south coast of mainland Australia. Some of the individual agglomerations are estimated to contain up to one million tonnes of fish. As I have said, the total volume is not fully known at this stage but it could be enormous. No one is sure what the sustainable yield is but the Government has been very cautious and set a 20,000 tonnes per annum limit on the catch. The age of the fish is also unknown. It is quite possible that the average age of the fish being caught is 30 years. This could lead to a limit on the sustainable yield if it means that the fish do not reproduce rapidly. Although the maximum sustainable yield is unknown, it is quite reasonable to say that it could be of the order of 50,000 tonnes per annum or similar to that of New Zealand. This matter is of great interest to my electorate. It has certainly led to a rapid increase in the catch in southern Victoria, and I believe that it will lead to a dramatic increase in the value of fishing exports. The potential of all this is obviously enormous and, as I have already mentioned, the opportunities for `value added' in our fishing and our fish catch have not yet been fully exploited. Turning now to the Fishing Legislation Amendment Bill, I support the words of the honourable member for Murray (Mr Lloyd), who has covered most of the issues in some depth. As he mentioned, there is some concern about the part of the Fishing Legislation Amendment Bill which widens the powers of fisheries officers to search vessels or motor vehicles. The Bill also extends their powers to enter land or premises and it tightens the rules governing undersized fishing catches. While we would support those amendments in principle, we must always be alert to the potential to abuse such powers. It is very important that the Government monitor that very closely. I can assure the Government that the Opposition will be keeping an eye wide open to see whether there is any abuse. I wish to talk a little about the Fishing Industry Research and Development Council. The Minister for Primary Industries and Energy (Mr Kerin) has, as he has with several other rural industries, set up a research and development council along fairly standard structure, as we have come to know it under his ministry. There is no doubt that that structure has worked well in some industries. It is yet to be seen whether it will work as well in all industries. We look forward, with interest, to seeing what will happen with the one in the fishing industry. Again, the Opposition will be monitoring the situation closely to make sure that the Fishing Industry Research and Development Council does, in fact, do what the legislation proposes. I add, in passing, that the Australian Meat and Livestock Research and Development Corporation has set about, very aggressively, to improve the direction of research in the livestock industries. It has been generally well received by the industry. It is too early to see what the results will be but, from what I have seen, I have no doubt that it will lead to some very positive developments for the livestock industry. All members of the Meat and Livestock Research and Development Corporation visited two research institutes in my electorate about a month ago. They were very well received and, I might add, very well hosted. Returning to the fishing industry, there is some concern about the way in which the Government has increased the levies. As the honourable member for Murray pointed out, there is to be a quite dramatic increase. In fact, the recovery rate for managed fisheries will be increased from the existing 44 per cent to 60 per cent. This will be increased progressively to 75 per cent and 90 per cent of recoverable costs over the next two years. Newly established fisheries will be subject to a full cost recovery. As the honourable member mentioned, another interesting levy of $295 will be placed on every boat holder, some 6,000 in all. I am fascinated as to how that figure was arrived at. It sounds as though it is a price tag out of the supermarket. Perhaps the Minister will explain that when he sums up. I suggest that the Government be a little flexible on the issue of cost recovery. It is important that we allow this export industry to grow. We desperately need to increase our exports. As everyone is well aware, our balance of trade figures are nothing short of disastrous. Therefore, I question whether the Government is wise to increase the levies as rapidly as they will be increased if it leads to some curtailment of the growth of the industry. It is all very well to talk about the user pays principle, but there are many government services for which there is no charge to the user. I reiterate that the Opposition does not oppose the Bills. We are very keen to see the fishing industry grow. We are particularly keen to see a growth in exports and a growth in value added products. Obviously, there is tremendous potential for this. Every bit of encouragement should be given to make sure that this potential is fully realised. The Opposition will be monitoring the performance of the management of fisheries. Obviously, we want to see fisheries develop to the point where they achieve the maximum sustainable yield. It is very important that the industry be encouraged to do that. We will be monitoring the performance of the Fishing Industry Research and Development Council to see that it functions as the legislation proposes. Mr CAMPBELL(Kalgoorlie)(4.35) —The fishing industry, with a total export value of about half a billion dollars, is a very important industry, especially in my electorate which has a long coastline. Honourable members opposite have raised concern about the additional powers bestowed upon fisheries inspectors. It is quite clear that they do have a potential to breach civil liberties, but I point out that the powers are no lesser powers than those enjoyed by many State fisheries and fauna authority people in this day. I do not think that there is any great evidence that their powers have been abused. I see no reason that we should fear abuse of these additional powers, although I believe that the situation should be monitored to make sure that abuse does not occur. I support the remarks of the honourable member for Murray (Mr Lloyd) about necessary research funds. I believe that this was also mentioned by the honourable member for Wannon (Mr Hawker). It is absolutely essential to get commercial objectivity into the application of any research funds. To a large extent, it is beholden on this industry to do so. The industry has representation on the new board and I am sure that the new board will be much more aware of that than perhaps has been the case in the past. For instance, although the crown-of-thorns starfish pose a problem to the Great Barrier Reef, the issue was not really germane to the fishing industry and perhaps it was inappropriate that fishing industry research funds were used in crown-of-thorns studies. I hope that that will not occur in the future and that we will see much more commercial objectivity in the application of those funds. Honourable members opposite lamented the additional cost recovery which the Government seeks. I seem to be forever explaining to honourable members opposite how the free enterprise system works. Very few of them seem to have a grasp of it. It would seem to me that, if the industry were called upon to fund a greater percentage of the costs incurred, it would be bound to take greater notice of how that money was spent. It seems self-evident that if we are to get efficiencies in industry, industry must bear the cost involved. In 1987-88, $30.1m has been allocated for fisheries management and development programs. That is an increase of $8.8m. This has been funded to a very large extent by new levies-for instance, $3.5m for new fisheries management initiatives; $2.5m for Torres Strait capital items; $1m for the northern prawn fishery adjustment scheme, and $1.8m for fisheries research. I rather suspect that the levy of $295 per annum on fishing boats was simply the sum required to make up the balance. I would say that that is how that figure came about and that answers the question raised by honourable members opposite. Previous speakers have alluded to the need for value adding. I think that value adding is essential for Australia in every form of export. There have been some advances in value adding in the fishing industry. Sashimi, southern blue- fin tuna, is a great example of this. It is through the initiative of sashimi that the industry has been sustained in Esperance. When all the licences were bought up by South Australia, there was not enough left there to be of commercial value without adopting sashimi practices, and that has been very successful. There is another value added process which I think needs a lot of credit, and that is the process of smoked tuna. A company in Esperance produces smoked tuna which is a very good product. In my view, it rivals salmon. I think that we should see it on the parliamentary dining room menu. It is also cheaper than salmon, which should be an attraction to the Parliament. The crayfish industry, too, uses the value added principle. I remember some years ago watching developments in the hydraulic pressing of crayfish heads and other body parts to extract meat which is turned into pastes, pates and other products for the catering trade. Traditionally there has been about a 30 per cent recovery of meat from fish-that is, the white fish fillet market. That means that a substantial amount of the meat is obviously being wasted. This cannot be allowed to continue. There are processes available to recover a lot of this meat. I am glad to say that there is evidence that some people are now looking to recover this meat for the making of pates, pastes and fillers for general cooking. That is also to be applauded. Other initiatives need to be taken in fisheries research. It is my view that not enough work has been done. I remember advocating many years ago that the fisheries research industry purchase the remote-controlled underwater vehicles that were available in Australia, as I had seen these vehicles operate. They are extremely good. They show the bottom of the ocean with great clarity and would be an invaluable tool in fisheries development. For instance, in my electorate there is now a conflict between the prawn trawlers off the coast of Broome and the $40m a year pearl fishery. Obviously, we cannot put the pearl industry at risk, but it is equally important that we cannot, and should not, stop a prawn fishery if it does not in any way impinge upon the viability of the pearl fishery. It would seem to me that the argument hinges on whether pearl shell is present in these waters. Pearl fishermen tell me that it is, although they have not tried to exploit it. The prawn trawlermen tell me that it is not. A viewing of this area of the ocean by a remote-controlled underwater vehicle and its very sensitive camera would determine this very quickly, one way or the other. It is a tool that should be used. Also, it should be used to seek out additional crayfish grounds which are thought to exist west into the Indian Ocean. Mullet, which is probably a much despised fish, is used by many people as cray bait. It is a very cheap fish. When one tastes it, one can understand why. Unfortunately, this reputation of mullet has affected the reputation of Shark Bay mullet, which is a very different fish. It is a larger fish and lacks the somewhat muddy taste of ordinary mullet. I find it one of the best eating fish of all. I hope that although this mullet is of the same species as ordinary mullet-it is marketed as Shark Bay mullet-it will find a better market and greater market acceptability. It is a fish that abounds in the very fertile waters of Shark Bay. It could be exploited to the benefit of fishermen and, in fact, the whole industry. I am pleased to note that the per capita consumption of fish in Australia has gone up. It is now about seven kilograms a head per annum. I believe that it has much more potential. Consumption can grow by quite a degree. Of course, that means that fisheries research must be kept up. We have to find new species and new fields to make sure that the stock is not depleted. I believe that there is some evidence to suggest that the fisheries industry in my State of Western Australia is probably the best managed fishery in the country. The joint operations between the Western Australian Government and the Federal Government appear to be working very well. The industry in Western Australia could possibly serve as a model for the rest of Australia. The other thing that concerns me in fisheries research is sport fishermen, because sport fishing is a very popular hobby. I get continual complaints from sport fishermen that the allowing of commercial fishing operations too close to shore is detracting from catches and is generally making the much sought after holiday less enjoyable because fish catches have dropped. I do not know how much substance there is in the complaints, but the complaints are so consistent that I suspect that there is some substance to them. When commercial operators operate too close to shore or to popular sport fishing spots, it is quite likely that there is a reduction in numbers. I believe that we could well use some of the research money for the establishment of artificial reefs and submerged floating platforms to attract the middle swimming range of fish. Artificial reefs, I believe, can be easily constructed by obtaining old Hallpac tyres, filling the bottom half with concrete, drilling holes in the top, tying them together and sinking them. In some places where this has been done on a small scale, it has certainly attracted fish. It has provided habitats which, there is absolutely no doubt, have increased the number of fish in the area. One has only to look at the North Rankin platform and the fish that abound there that were not there before this habitat was artificially provided. There are many areas of the ocean which are now barren which I believe could be stocked or improved if artificial habitats were provided. I believe that this would help to break down any potential conflict between sport fishermen and commercial fishermen. This legislation deserves to be commended. I am pleased that the Opposition is supporting it. Indeed, I fail to see how it could do otherwise. I think it expresses this Government's ongoing concern for the industry. I believe that, with the concern shown by this Government for all areas of fishing, the fishing industry will go from strength to strength. Mr TUCKEY(O'Connor)(4.47) —As the honourable member for Kalgoorlie (Mr Campbell) has said, the Opposition supports the Fishing Industry Research and Development Bill, the Fishing Industry Research Amendment Bill and the Fishing Legislation Amendment Bill. I think he might agree with me that there is frequently support between the parties but, unfortunately, that is seldom mentioned in the Press. It usually wishes only to report those issues on which we disagree. However, the honourable member also raised the issue of cost recovery. He said that in some way we on this side of the House needed to know how the free enterprise system worked. I assure him that we know how the free enterprise system works. Free enterprise, of course, does not work on the principle that one is forced to pay a levy or a charge when one has no input to the cost structure. In this regard the Opposition, on behalf of many industries-be they the meat industry, the fruit industry or the fishing industry-objects to a government which continually says that there must be more cost recovery and that there must be more of the user pays concept. The theory is excellent. The problem from which the fishing industry, for instance, suffers is simply that it cannot in any way control those costs. There is probably no better example of a free enterprise industry and a small business industry than the fishing industry, although these days there are huge costs involved with equipment. But the fishing industry has always been very much about small operators operating a single boat of whatever size. Of course, over the years they have achieved wonderful efficiencies in their operations. When they are told that a charge, which is presently levied at 44 per cent of what the Government deems to be a reasonable charge to operate the system, is to rise to 60 per cent, in the following year to 75 per cent, and the year after that to 90 per cent, they see the cost rising to such a rate that, on average, boat operators will have to pay a licence fee in Commonwealth fishing areas as high as $3,000. It has been increased from $1,500 to $3,000. One can see why they are pretty concerned. Their complaint is not that they have to contribute; their complaint is that there is no way that they can deal with the efficiencies or make recommendations of any note as to how the service should be provided. It is just as I said the other day on a matter relating to health. The great difference between the Opposition and the Government on all these issues is this: we frequently have the same objective-in this case it is to control and advance the welfare of the fishing industry-but often we have an entirely different direction in reaching that objective. We do not believe that it is always necessary to own the shop to deliver the service. In fact, the people are often best served if a government chooses to get others to do the particular work and pays them for it-in other words, if it subcontracts out wherever possible. That raises the next point in all this, and that is that some of this legislation proposes the construction of a new fisheries research vessel, which I understand could be as expensive as $20m, of which some $6m is available out of the fishing research fund. There again, fisheries research is being carried out at this very moment using a private enterprise boat. One must wonder just what we shall achieve by buying a boat. To start with, they are not inexpensive things to move from one place to another. Of course, one does not necessarily have to give a long term charter to a particular company. Admittedly, certain equipment would need to be on board, but otherwise one can frequently hire a boat in one area when one needs it to do a particular research project, and then hire another one in another area, without shifting them the length and breadth of the Australian coastline. There seem to me to be substantial reasons why certain contractual arrangements for the hiring of boats would be satisfactory, and I am sure that researchers' needs could be met in that way, even though it might represent a small amount of inconvenience. Of course, the amount of inconvenience that we are talking about for the taxpayer of Australia is $20m of government expenditure, when that sum could be directly applied to research through the hiring of other people's equipment and leaving them with all the worries and concerns of its general operation. I know that after my making these remarks someone will probably rise to say, `Oh, but when you work out the cost, it is substantially cheaper'. I do not always recognise that that is a fact. The reality is that figures will always be produced to prove that point, but all successful business operators generally avoid getting into businesses in which they are not expert. The Commonwealth Government, of any political colour, is expert in very few. It is becoming more and more noticeable today how the private sector, if it is in the business of selling groceries, sells groceries. It does not build shopping centres. It gives that job to an expert. It is quite happy to pay the rent that the expert requires, because it has learnt over time that that is cheaper, and that it maximises its profits by keeping its capital to do the thing that it does best. In this case, the community capital is needed to undertake research, not to run a research vessel. I am sure that over a period we would have more money for research were we not to build the boat. Nevertheless, they are my personal remarks. The Opposition is not opposing the Government's determination in this area, although I believe that the industry is somewhat concerned about this problem. There are other matters on which I should like to comment. Remarks have been made by previous speakers regarding the powers that are being given to Commonwealth inspectors in this legislation. I have no objection to that. I am one who would support the concept of human rights, but I am also pragmatic enough, having lived in fishing districts for most of my mature life, and representing a number now as a member of parliament, to realise that it is just pointless thinking that a fisheries inspection vessel could come alongside another boat, take note of things that are believed to represent breaches of the legislation needed to protect the fishery, and then duck back into the nearest town where there was a magistrate and get a warrant. That is clearly not practical. To my knowledge it has never applied to State inspectors, and nor should it apply in this area. We are talking about protecting an asset. Western Australia has taken the lead in limited entry fisheries and strict controls on size and the other things that go with that. I am not one who would normally stand for controls past any reasonable degree, and yet in the case of fishing I see the absolute need for those sorts of controls, and I accept that only government can provide them. Limited entry to a fishery is the best means by which one can control somewhat the exploitation of the area. Unlike any other form of farming, of course, we do not plant the crops and we do not allocate the grounds. We can only rely on nature to rebuild the schools of fish. If the resource is over-exploited, we do not get the necessary recovery. We have seen that in other areas, particularly the southern bluefin area, which I was representing until the last redistribution. So, those powers are needed, on sea and on land. It has been noticeable that since sensible arrangements have been in place, the industry has been better off. So, we see that there is a need. I have not heard of too many examples where people have complained about their treatment in that regard. Some of the penalties today are very harsh on those who choose to break the rules. There was a notable case in Western Australia just recently. I think that people must recognise that if they want to break those sorts of rules and put a whole fishery at risk, they will have to pay a substantial penalty. Mention has also been made of innovation in the fishing industry, and that is worthy of a comment in this debate, particularly the move in my electorate towards sending away live crayfish to certain markets, and how successful that has been. It is a peculiar approach to value added, because in truth we send away the whole fish and probably do less to it here in Australia. But it is substantially valuable to the nation because it improves the financial return on the product. As I have mentioned in this place previously, the exploitation of live crayfish-or lobster; however people choose to name them today-relies heavily on the availability of air freight and good connections. That has been a problem, particularly for Geraldton in my electorate, although I have not heard the level of complaint about it in recent times, and I assume-taking the normal rule on that-that if there is no complaint, things must be operating reasonably satisfactorily. No doubt the moment they do not, I shall be informed again. Other speakers have mentioned the Japanese sashimi market. That is clearly the area in which there is a high grade return on a product as compared with turning it into cat food. I have always thought that it was a great pity that we are prepared to use such a huge amount of our fish resources as pet food. It seems to me that a large amount of it should be reserved for human consumption. I have seen wonderful edible fish resources caught by certain fishermen by means which made them suitable only for cray bait because they were worth more as cray bait than they were for human consumption. The salmon industry in the south of Western Australia at one stage was allowed to sell only the heads as cray bait, but the heads were getting longer than the body as they were sawn off because of the returns that could be got. We are now reading of aquaculture, in which fish are being bred at sea in pens. Such developments are a matter of great opportunity, particularly as we are introducing Northern Hemisphere-type fish, which are in huge demand-Atlantic salmon and fish of that nature. That is a wonderful opportunity. It is amazing to think that the common trout can be encouraged, apparently, to grow to three times the size that they generally grow to in fresh water if introduced to a salt-water environment. This is just another area of that. Nevertheless, I note that some of these developments with huge capital investment are concerned about the recovery of seal flocks and things of that nature. Seals are breaking into the pens. No doubt that will be a problem for the government of the day in the future, as the conservationists come in with their arguments about who should survive on this planet-human beings or those animals. They will create difficulties, just as the kangaroo does for people trying to generate an income from growing sheep and cattle. I am one for a balance in all these things but I am also in favour of maintaining a standard of living for the people of Australia. At this time with all the problems we have with international indebtedness, it is absolutely essential that we maximise every opportunity we have to create export products. I would like to raise a matter related to the fishing industry in general which is specific to my own electorate. It comes back to the cost that governments impose upon the fishing industry or any other industry when, if you like, Mr Deputy Speaker, it tries too hard. I refer to the marina that has been established in Dongara which is in my electorate. The area is a major source of crayfish and the town is extremely popular with professional fishermen during the white crayfish season which is a short period after the crayfish moult when they can be caught in very large numbers. It is a time of the year when the catching potential centres on Dongara. At that time of the year the Dongara marina can be overcrowded. A solution proposed by the Department of Marine and Harbours was to establish a lot of pens so that the boats, instead of having to anchor freely within the marina, would run in between piles and pens thereby increasing the number of boats that could be put within the marina. That is fine, but the problem is again that no one is to be told how much that might cost. The fishing industry is not convinced that when the piles and pens are introduced it will necessarily improve the number of boats that can be contained within the marina. The Western Australian coast is very open. There are no natural bays or river mouths of any note. A stone wall has to be built out into the ocean or to a reef to enable the boats to shelter. That is a very successful arrangement but along came the Department of Marine and Harbours offering this great improvement. To their credit, the fishermen fought it bitterly. I support their position. They point out that there are only a few weeks of the year when the harbour is overcrowded but that the fishermen, as permanent residents, would be the ones obliged to rent the pens which would cost them thousands of dollars a year. They do not need that loss to their revenue. At this stage of the game there is really no reason to spend taxpayers' money on this particular development. I hope that consequently the State departmental people have decided that this is no longer a sensible development. I hope that they will not proceed with that development, certainly in the short term or until such time as the fishing industry itself indicates that it thinks the investment by government is worthwhile and therefore is prepared to meet the cost of hiring those pens from the Government. It is amazing how quickly these things get expensive. The small marina at Dongara now requires the employment of a harbour-master. All the costs grow. Having a harbour-master, whose sole responsibility seems to be seeing to it that nobody stays at the jetty too long, is a pretty expensive way of organising the marina. Knowing my fishermen friends from that area, they would have very simple means of getting someone away from the jetty if he stayed there too long and somebody else was waiting. I would not like to be around when words were exchanged or whatever else was exchanged. At times we offer too much and then, of course, we seek to charge for it. Although that is not wrong it comes back to the original argument of striking these levies against people when they do not need them to be imposed. In closing, the honourable member for Kalgoorlie praised the idea of rubber-tyre reefs. I agree with him entirely. I would like him to know that many years ago when I was president of the Carnarvon Shire, part of his electorate, we commenced installing rubber-tyre reefs. Because we were using small tyres we had trouble keeping them on the seabed. The main reason for that was that the fisheries people would not let us put the tyre reefs in protected waters. That seemed a little silly because most amateur fishermen do not want to go out into very rough waters to try to catch a few fish. There is no doubt that they work once that protection is there. One has to look only at the huge stacks of worn-out tyres around the place to be reminded of the fact that a lot of the Australian coastline does not harbour fish because it does not have a reef system or some other system. We know what happens when a tyre reef is built. Skin-divers are quick to tell us about the profusion of fish around any sunken vessel. It is a great way of getting rid of a problem: tyres otherwise have to be burned which pollutes the atmosphere. We can use the rubber tyres to build reefs in appropriate places to improve the quantity of fish that we have in our waters and all that goes with that. It offers a wonderful recreation for Australians to get out and catch a few fish to supplement their diet. Mr WRIGHT(Capricornia)(5.06) —There would be common agreement within this Parliament, and I think in the informed community outside, that the Australian fishing industry is undergoing a period of significant change. I am pleased to be a member of a government that has played a very important part and a very positive role in this period. This Government has embarked upon a proper management strategy for our fisheries. It proposes to establish the Fishing Industry Research and Development Council and, in doing so, it will establish a very important forum for the Government and industry to get together to talk through the problems that have prevailed. The Government has also worked very hard to develop a consultative and co-operative approach, not only with industry but also with the States. This has to be acknowledged as a major win because too often we have a Commonwealth-State conflict instead of Commonwealth-State agreement. The Commonwealth Government has taken what I would see as a specialist approach as well as a broad industry approach in that it has given special acknowledgment to the need to develop management plans for all aspects and the specific aspects of the industry. The Government has targeted the major fisheries such as the northern prawn fishery, the tuna fishery, the south-east trawl, the southern shark fishery and other areas it believes are important as individual sectors of the industry. The Government has also been successful in achieving legal arrangements for fishery management within the off-shore constitutional settlement with, I think, all but two States. That is not because of political reasons because I note that Queensland has given a lead here. There has been an agreement in place with Queensland for almost two years. The Government has achieved so much. Its greatest achievement has been in the acknowledgment of the special needs for money to be put into research and development in the fishing industry. Over a long time a lot of money has been spent by the previous Federal Government and this Government to develop this very important rural industry. I read some figures the other day which showed that the fishing industry was now rated as the fifth, I think, most important rural industry in Australia. In 1986-87, the gross value of production reached $639m. That is an enormous amount of money. The national catch was 152,500 tonnes. We are talking about a huge industry, a vital export industry, an industry which, from an export point of view alone, last year was worth $591m. That has almost doubled since 1981. I believe that some people can take great pride in what has happened at the State level, at the industry level and at the Commonwealth Government level, for we have seen the development of what was a very small industry, one having great difficulties. It is now growing and coming through with great success. There are more than 9,000 boats in the Australian commercial fishing fleet. There are some 21,000 people employed in the harvesting of sea resources. There are almost 5,000 people involved in the processing area. We can add to that all the ancillary backup staff in the transportation, clerical and administration areas. It is a very big industry. It is saving our nation hundreds of millions of dollars in imports as well as earning hundreds of millions of dollars in exports. We all agree-this is obvious from the bipartisan support for the legislation-that the industry has enormous potential in both the export and domestic markets. I think the industry is at a crossroads. I note that the Minister for Primary Industries and Energy (Mr Kerin) in his second reading speech talked about it being a rural industry. He stressed what the Government had done in many of these areas. I am wondering whether we are treating it as a rural industry. For all that is taking place, I question whether we are winning the war. I do not mean to take an analogous approach of there being a war. If one makes comparisons of what has actually taken place with our exports, we see that our exports jumped from $230m in 1980-81 to $591m in 1986-87. That is praiseworthy. We say `Congratulations' to everybody who is involved. If we look at the imports of fish products during the same period, we find that in 1980-81 our imports were $190m, but last year that figure had skyrocketed to $421m. So we are at the crossroads. We see that more money is being spent. In fact, since 1969 some $28.5m has been spent on research and development. Exceptional recognition has been given by this Government and by the States. There has been a willingness to bring about a management strategy for our fisheries to protect what we have. There has been dialogue, consultation and a co-operative approach, yet I am not sure that we are winning. When we look at those figures and at what is taking place we see that imports are still outstripping our exports. This must worry many people in the industry. Clearly we are not addressing the needs and demands of the domestic market. For if we were, then there would not be this propensity to import these products. Or is it because our prices on the domestic market are not as competitive with what we get on the export market? I do not know; but I do know that the import figures continue to blow out. I give full credit to the Government for what it is doing and for the establishment in this legislation of a Fishing Industry Research and Development Council. I give full credit to the Government and the Minister for the very positive role that they are taking in preparing five-year plans for fisheries research and development. I give them credit also for ensuring that there will be representatives on this Council who have fishing experience. One comment made by the Minister-I took it to mind-was that there `shall be a mix of skills and abilities'. Surely this is commendable. We have a new approach that is working and we have consultation and co-operation. Our exports are increasing but, clearly, we are still not competing with our imports. I note that the Fishing Industry Research Act, in its research and development, will allow the Government not only to consider the research and development of our fisheries, but also to look hard at fishermen and businesses. I welcome what the Government has done. I note that the Minister only recently announced the opening of a new area between Sydney and Cape York that will be an explanatory region. I question whether or not we are still doing enough for fishermen. I spoke to two fishermen in the last 24 hours and I said, `What is the greatest problem that you have?'. Both these fellows said, `Money'. One fellow said to me, `Look, we are a rural industry. We are in all the reports as rural industries, but we do not have the same rights as any other ``farmer''. We do not have access to the money that any other ``farmer'' has. We do not have access to the rural reconstruction funds and the rural adjustment schemes that the other ``farmers'' have'. We might put `farmers' in inverted commas because I do not think all fishermen like to see themselves as farmers. They are, in fact, harvesting a product, yet they do not have that access. It is understandable. What bank wants to lend $250,000 to a fisherman? If the bank lends to a farmer or grazier the land will not sink, but a boat can. There are not the same risks involved. Yet it has been very clear in what the Minister and others have said in this chamber that this industry has enormous potential, but we need to develop that potential amongst the fishermen themselves; we need to make finance available to the fishermen; and we need to come up with some sort of insurance scheme to protect them. The other point that was raised with me was that the cost of insurance to fishermen is simply so high that it is almost impossible to meet that commitment. So, too, is the cost of upgrading equipment. When there is a need to upgrade the facilities and equipment, the cost is just enormous. Whilst I am very commendatory in my remarks, I urge that a review take place of the assistance that is actually given to fishermen. As research and development is now allowed within this Act, and revamping will take place, I urge that everything be done to ensure that we sit down and talk with the fishermen to find out what their needs are. One fellow suggested to me that there should be a fishermen's bank. We have always talked about small business banks, rural banks and so on. I am not sure that that is the answer. I do believe that fishermen have to have access to low cost money; they have to have some sort of insurance package deal; and they have to have special assistance when it comes to management skills because they are dealing with businesses worth hundreds of thousands of dollars. We seem to take note of the needs of the small business fellow in the strip shopping area or the supermarket area, but I do not think we have given due cognisance to the needs of these particular businessmen, and that is what they are. As I said, there are some 9,000 boats which are worth many millions of dollars. It is an important industry earning hundreds of millions of dollars for our nation with the potential to replace hundreds of millions of dollars in imports. If we are to address what I see as a continuing problem, then we need to come to grips with the specific needs of fishermen. I support the legislation before the chamber. I welcome the initiatives of the Minister and the Government, but I ask that this be one specific area of investigation when the new Council is set up. Mr BRAITHWAITE(Dawson)(5.16) —We are debating cognately the Fishing Industry Research and Development Bill, the Fishing Industry Research Amendment Bill and the Fishing Legislation Amendment Bill. The Opposition supports these Bills because they involve two things: first, a recognition of what the fishing industry has meant to Australia and what it can mean in the future; and secondly, a recognition that in order to achieve the great potential of the fishing industry a system of research and development has to be fostered in this country if we are to get any industry to realise its potential. A recent report indicated that, on the scope of research and development funds available throughout the world to industries, Australia did not rank well. The report also observed that in research and development private industry commitment was very much lower than the public research and development commitment of governments and, again, in comparison to the rest of the world that was not a good indication either. We also find that Australia has the capacity to develop and research as is indicated by papers which say that while Australians present 2 per cent of the papers believed in scientific circles around the world, only 0.8 per cent of the patents throughout the world are attributed to Australians. So there is a gap in the recognition factor also. Any legislation that encourages the development and research of Australia's fishing industries can only be welcomed in this country. As I said, it is certainly welcomed by the Opposition. It can change a depleting resource into a vibrant and expanded major industry and assist in our trading prospects, particularly within the Pacific rim. The lack of knowledge of the sea in relation to mariculture and the fishing industry in general is enormous in comparison with the extensive knowledge that Australians possess regarding agriculture and other land-based industries. As we are approaching our Bicentenary, it is very interesting to note the enormous changes to, and development of, our land since 1788. However, in comparison with Australia's landscape, Captain Cook could quite well feel at home with our present seascape even though 200 years have passed since he sailed through these waters. That is how little we have done in development of our off-shore resources. Until recently it was said that if one required up to date information on our reef and fishing grounds the best maps and information were available from Taiwan, Japan, Korea or Indonesia-anywhere but Australia. This is significant to the extent that all these countries have been granted fishing rights within Australia and apparently know those areas they are fishing better than we do ourselves. This is, of course, a sad reflection on the resources given to mapping our major fishing grounds and the seas around Australia. The purpose of the legislation before the House is to improve the administrative system of the fishing industry and to provide for the funding, research and development of the industry. The Government's policy will be similar to the legislative guidelines set out for rural industries research. Although this legislation does not refer specifically to mariculture, it is this area of research on which Australia's concentration of effort should be centred. The Australian Institute of Marine Science outside Townsville is presently engaged in research under the directorship of Dr Baker. The threat of the crown-of-thorns starfish has already been mentioned, and it is this institute, not the fishing industry, that is doing such research. The research shows that the knowledge that can be gained from the oceans is incredibly important. Examining the coral core from the Great Barrier Reef can help provide a better understanding of our climate. Artificial reefs can become a rich source of fish and crustaceans. Building materials can be supplied from the sea and fish farms can be established off and on shore. It is these factors that we are only just beginning to research and consider seriously. Dr Joe Baker mentioned the major plus that Australia has, and that is its largely unexplored area, rich in natural species, largely unaffected by intensive occupancy and not yet subject to human manipulation and dominance. He also said: In the most recent studies we have seen the level of pollutants determined in marine species within the Great Barrier Reef region, to be at a lower level than those which are accepted for safety standards throughout the world. In that way we are indeed in an advantaged position compared with other countries. When one thinks of the protection given to our native flora and fauna, the lack of concern when it comes to the marine environment is simply amazing. In the course of this debate we have heard of such problems as the taking of undersized fish, the waste within the trawling industry and the use of our precious fish for fishmeal instead of products suitable for the table. We have corrupted the system to a large extent, yet we still lack this protective concern. Australia is years behind many other countries in the intensely competitive mariculture area. Earlier this year, I went to Taiwan with my wife, and we had occasion to visit a major research facility practising mariculture. It was interesting to know how long that had been established and the type of experience and research that it was giving to its industry in Taiwan. These people are looking towards Australia as a potential area for what they are doing in research. They are adapting their expertise to our climatic conditions yet there are difficulties in transferring that technology. One is that we do not recognise Taiwan, another is that visas are difficult to get, and thirdly, if it comes to a matter of rapid transportation to Taiwan as a market, we are left in some doubt as to whether we can make shipments as rapidly as we would like. In Japan, research is so advanced that the Japanese are already planning to build massive marine cities. The development of the Four Seasons-Barrier Reef Hotel and the Wonderland Aquarium, both in the Townsville region, are signs that Australia has the ability to compete with other countries and is prepared to adopt the necessary technology. However, this type of technology would not have been foreseen until recently, let alone catered for in legislation. In a developed country like Australia, which possesses a high level of knowledge and expertise, there is no excuse for our present backward position. Australia could be a major leader in producing and exporting the products of mariculture, given the correct encouragement and incentive. The legislation before us has been developed since 1979, when the then Senate Standing Committee on Trade and Commerce began a major inquiry into the Australian fishing industry. The Fishing Industry Research Act 1969 will be replaced by this legislation. This will ensure that we remain up to date with the modern technology of the fishing industry. The aim of the legislation is to improve the efficiency and effectiveness of fisheries research through the establishment of the Fishing Industry Research and Development Council, which will provide annual research and development programs, approve payments from the trust fund and monitor and report on projects funded by the trust fund. The research committee will produce a five-year plan for research and development and annual operational programs. The Council will consist of a chairman, government member and between three and seven other members. The Fishing Industry Research and Development Trust Fund will consist of funds from approved State research funds and will be matched dollar for dollar by the Commonwealth Government to a maximum of one per cent of the gross value of industry production. The introduction of this legislation should bring about a whole change in Australia's attitude to the sea. We should be looking to the sea for the potential in farming it, as we farm the land. It is only in recent years that Australia has been involved in any major research involving the improvement of marine species. It is the policies that we implement now that will affect the development and future of our marine environment. We have vast areas of land that have not been touched by man lying dormant under the sea. The implications of farming that land should be seriously considered if we are to ensure the best possible management, in the long term, of our marine environment. We have an Australian fishing zone and therefore we are responsible for that area of sea. That area is far greater than our mass of land-8.6 million versus 7.6 million square kilometres. That factor is not generally recognised by the 16 million Australians. The legislation will strengthen the powers of fishery inspectors under three existing acts-the Continental Shelf (Living Natural Resources) Act 1968, the Fisheries Act 1952 and the Torres Strait Fisheries Act 1984. I agree with the sentiments that have been expressed that we must give powers to the fishing inspectors if they are to do their policing properly and make the necessary apprehensions. This has to be done immediately and cannot be delayed, as that is the only type of restraint that will be recognised by the offenders. Provision is also made for more stringent laws regarding undersized fish catches. I would like to mention here that there needs to be some co-ordination between the States as far as fish catches and weights are concerned. It is known that while some fish and crustaceans are available at a certain size in Queensland, when one goes over the border to New South Wales, undersized crustaceans can be sold there. In other places, protection is given to some fish but not to others. For example, in Queensland there is a closed season for barramundi, but I understand that there is not one in the Northern Territory. Of course, fish do not know the difference between borders, and should they roam over one area instead of another, they might suffer the fate of being apprehended on the end of a fish hook. These measures will ensure better protection of Australia's fishing zone by enabling officers to exercise powers of stopping, entering and searching a vessel without a warrant, if they have reasonable grounds upon which to act. The surplus funds from the existing Fishing Industry Research and Development Trust Fund will be spent on the purchase of a new fisheries research ship for the Commonwealth Scientific and Industrial Research Organisation (CSIRO) Division of Fisheries Research. At present, the CSIRO leases such a vessel, the Soela. This vessel will be a great asset in assisting in the research of this invaluable industry. What we have learnt from farming our land should result in a more efficient and effective farming of our marine resources. Only last month, the Government announced plans to open up a large stretch of Australia's eastern seaboard to managed fish trawling. It is up to the Government to ensure the proper management of this region. We must give the Government credit for opening up that region. This is essential if Australia's fishing industry is to continue its successful expansion. However, the Government's record to date, and probably that of all governments, in the management of the fishing industry has been poor. As Dr Baker has said, the Government has not shown the: . . . willingness to analyse areas of country which are particularly well suited to different types of marine development but rather allowed a comparatively haphazard establishment of coastal farms without consideration of desirable features which would optimise the chance of success of these new ventures. Already the fishing industry has complained about the Government's lack of consultation concerning this legislation. We can only hope the introduction of this legislation will bring about a change in the Government's attitude. The Government could be saving large sums of money if it used technology to its greatest advantage. This is the main reason why this legislation has had to be introduced in the first place-to keep pace with the modern technology of today. Remote sensing technology saved more than $20m in costs by allowing the mapping of the Great Barrier Reef region in the shortest possible time. Greater awareness of this type of technology will be of vital assistance as we exploit our seas and preserve them for the future. The legislation will enable greater emphasis to be placed on education and the wise management of our seas. Mr Stephen Midgely, a fresh water fisheries consultant in Queensland, has expressed grave fears over the survival of our more popular fish species. Mr Midgely believes there is a necessity to establish fish farms, not only to ensure the long-term preservation of fish species but also to produce a reliable number of fish species as food items. The structural framework that this legislation implements will ensure the greatest potential for research into finding a long-term solution to the depletion of our marine species and administering that solution. Northern Australia relies on fish such as the barramundi for market success and, particularly, the tourist dollar. As the influx of tourists increase in the north, these fish are rapidly depleting. Queensland's barramundi ban comes into force in November and will continue until 1 February next year. This has been introduced to protect the fish from exploitation. Barramundi are subject to capture because this is the time of the spawning migration from rivers to the coastal foreshores. This ban applies to both recreational and commercial fishermen. However, placing fishing bans will not be an answer to the long-term problem of the depletion of our marine life. This is all the more reason for the fast and efficient implementation of this legislation, because damage is often caused to fisheries by ignorance. Nursery areas for some fish species can be destroyed by the draining and filling of swamp areas and the destruction of mangrove systems and through the over-trawling of some fishing areas. The construction of dams and weirs across the lower reaches of some streams can also cause serious effects on fish such as the barramundi, as they can severely limit the area available for fish to mature. This destruction is often carried out without the authorities being aware of the detrimental effects upon marine life. At present, it is inevitable that pollution will increase as the tourist industry booms. The effect of pollution on fish is obviously serious and, unfortunately, not adequately understood. If the decline of fisheries is not understood properly, then the Government, which is responsible through its policies to protect those fisheries, could, through ignorance, make ill-judged or wrong decisions. Hopefully, with the passing of this legislation, such knowledge will increase. With this legislation in place, the long-term prospects of success for a marine farming industry in Australia is great. Western Australia has already moved to establish marine parks with integrated land-sea management conditions. In the Northern Territory and Queensland, small industries have been established in the farming of prawns and barramundi. Flying Fish Point and Mourilyan Harbour near Innisfail produce prawn and barramundi spawn for sale to commercial farms. A certain number of spawn from prawns is released into the open sea every month, and the Government is releasing barramundi spawn into its old habitats such as the Burdekin River. The success of mariculture industries will be determined by the close collaboration between the Government, researchers and the industry. It is inevitable in any new farming industry that problems will arise. That is why it is vital that this close link among these three groups is maintained to solve these problems and move together to enhance a great future in mariculture and fishing. It is up to this Government and all governments-including State governments-to ensure that the mariculture industry is characterised by wise planning and development, but this must be balanced with a minimum amount of red tape and regulation. The passing of this legislation represents a step in closing the gap in our knowledge of our seascape and, hopefully, it will lead the way to developing Australia's great potential in the mariculture industry. Dr Joe Baker and the Australian Institute of Marine Science have already established a beach head. It is up to governments, and the industry-land and sea based-to develop that beach head for the benefit of future generations of Australians. Mr IAN ROBINSON(Page)(5.34) —The fishing industry is one of our most significant industries in Australia today. It is significant because its development has brought about a vast change in the economy of the industry, the economy of the individual fishermen, the economy of the industry overall and in its capacity to supply the domestic market. As a consequence of the expansion of fishing agreements that have been created recently, the industry is a significant contributor to our export market and our export earnings. Basically, the Bill deals with research and development and it is in those two fields that much has yet to be accomplished. In the research field, the fishermen themselves, and I am sure most Australians, recognise that we still know too little about the problems of the fishing industry and problems associated with some of the worrying diseases that can occur. In particular I refer to the red spot disease problem along the northern rivers of New South Wales, in southern Queensland and in other locations around Australia. The problem with the red spot disease is predominant in the Clarence River in my electorate. I believe that thus far inadequate research has been carried out into this serious problem. There is a lack of real knowledge about the cause of this disease and the remedial action that may or may not be taken in respect of the control of the river systems and the matter that may enter our river systems. Much has yet to be learnt about this one serious imposition on our fishing industry. So I welcome the expansion of research as envisaged under this legislation and, for that matter, the restructuring of the administration for research. I hope that the new committee will see fit to ensure that funding is directed to important fields such as the one I referred to, and there are many others. Priorities need to be established to ensure that funding is available to those areas which, on serious consideration by the committee and following advice from technical experts, are seen to have real needs in the first instance for the expenditure of funds raised from the industry and supplemented by the taxpayer. The taxpayer contribution to research for the fishing industry is substantial, and we want to ensure that it is spent wisely and effectively. So I repeat: The proposed new committee will have a great responsibility in this regard. In fact, you, Mr Deputy Speaker, as the member for Wide Bay, mentioned to me earlier today a matter of some significance when you referred to a recent report about Japanese interests involved in fishing using satellites to oversight and locate certain ocean currents which give them a precise fix on the location of huge volumes of fish. Of course, the consequence of that is for fishing to be directed to those particular zones and perhaps that will result in overfishing. Perhaps it also means that, while there is a certain degree of research in an approach of that kind, there are also dangers. The real problem that the fishing industry has recognised in recent years is that we still know too little about the effect of the catches in various fishing grounds around our continent and in the waters that Australians wish to fish commercially. Likewise, in our rivers and estuaries there is a great deal of concern about whether there should be closures, whether there has been overfishing or whether there are other reasons for what are believed to be difficulties that are encountered by professional fishermen and others who are concerned with the future availability of fish species for recreational and commercial fishing. The answers are not easily gained and wide research is required in many directions. If we think about the prawn industry in particular, the recent advent of prawn farming has brought a whole new concept to this section of the fishing industry. Reference by other members to the advent of fresh water marron is another example of the new fields about which we still know too little. We must not take risks in advancing the industry-and perhaps it has been too quick in some directions-and we must encourage those who are prepared to invest substantial sums of money in it. Millions of dollars are being directed to specific prawn farming projects. We need to match that spending with adequate research and technical surveillance so that we know just what is being done and what the ultimate outcome will be. The concern of the ordinary fishermen, those who toil long hours in difficult conditions facing the rigours of the weather and the commercial result, is the increasing levies which they will face. The Budget a few weeks ago imposed a brand new levy of $259 for the relicensing of existing fishing boats. Not a lot of information was given about it except that it will raise about $1.8m. Let us assume that it will be the responsibility of the new committee to decide where some of this very substantial sum of levy raising will be directed. Another Budget proposal increased amounts raised under the existing levy provisions. These measures put in the hands of those responsible a very substantial sum of money to be expended in the interests of the fishing industry and of Australia. The industry is continuing to say very loudly that it wants more self-management. It is concerned about some of the decisions that flow from the respective Federal and State fisheries departments. Of course there is an important link between the Federal Department of Primary Industries and Energy-I am glad to see the Minister for Resources (Mr Peter Morris) in the House at the moment; he will be aware of the relationship-and the New South Wales Department of Agriculture, which has the responsibility for State fisheries in New South Wales. The reference in this debate to the intention to assist in the financing of a new research vessel for the Commonwealth Scientific and Industrial Research Organisation (CSIRO) is an important consideration but again there is the vital question of co-ordination with the respective States. New South Wales already has a research vessel. One would imagine that the vessel now proposed for the CSIRO will have much greater capacity to do surveys and will be equipped with the kind of sophisticated equipment that these days is essential for research of the sort that must be carried out in very deep water in the various fishing grounds to ascertain fish stocks, the reasons for the advent of fish in certain zones and why we have lost the fish resource in so many parts of Australia. It is very easy for those who criticise the fishermen or those who have engaged in the commercial activities in the past, whether it be in whaling or the taking of catches of larger fish such as tuna where it is known that there is not an unlimited resource. But co-ordination between the Federal Department of Primary Industries and Energy, the fishing industry organisations at national level, this new research committee and the State authorities can do a great deal to encourage and to protect the Australian fishing industry. That surely is the objective of the legislation before the House this afternoon. The problems that I mentioned that face the individual fishermen are great-finance, the success of their individual ventures and the co-ordination through co-operatives or fish marketing authorities for effective marketing. So there is always some apprehension about the raising of additional funds, the introduction of increased levies and licensing requirements. In the matters before us there is a reference to licensing being for periods other than 12 months. I do not know what the import of that is but I hope that it is not intended as some draconian process to reduce further the viability of the existing fishermen. In New South Wales in the last few months there was a move afoot which spelt out an intention of a new policy that the licence of a fishing boat would not automatically be renewed if the holder of the licence was no longer able to operate the boat. That would mean that if there were a death in a fishing family-very often they are family businesses-the licence could not be passed on to the successor or could not be sold, if there was a need for a father to sell to a son or some other move of that kind. I think good sense has prevailed to some extent and that this proposition is now being reviewed. All of us understand that there must be limits-limits on catches, on the scope of fishing-but the limits must also be administered in a manner which recognises individual rights and the need for reward for enterprise. There is no industry in which one more often finds small business, the enterprise of the kind that comes from family ventures, from individual effort, than in this industry. Certainly, there are some big companies but usually they have a role in co-ordinating, in taking the catches from the individual fishermen and arranging for processing and then marketing. So they do have an important role, but our concern primarily must be for the individual fishermen because without them we would not have an industry of the sort we have today. Mr Cowan —They have been the backbone so far. Mr IAN ROBINSON —And we would not, as the honourable member for Lyne says, be able to sustain the backbone of the industry that has been built up over the years. Unless we do that we will lose our export markets. We would than have to import more fish, which of course would be a disadvantage for the overall economy, and we would not make progress for Australia of the sort that is so necessary. I want to mention one aspect that relates to all of this potential. What do we find? The freight cost for the export of much of our take today has sky-rocketed. For example, those who have undertaken the development of boats capable of catching tuna off the east coast, of handling the tuna, of getting it on to a cargo flight out of this country, which means it reaches its market in a matter of hours, were doing the job precisely and efficiently and getting a very good result on the Tokyo fish market with catches from the waters off the east coast of Australia. From places in my electorate such as Evans Head, Ballina and Coffs Harbour the catch is on the Japanese market in a matter of only hours, less than 24 hours, with a level of efficiency and a quality result that a few years ago were thought to have been quite impossible for Australian fishermen. What has happened to them in the last few weeks? There has been a 25 per cent increase in the freight rate from our own airline, Qantas. That is a very severe blow for fishermen who have built up efficiency of the sort that I have just described and who then have had the great disappointment to find the imposition of a freight hike of that sort on top of enormous increases over the last 18 months. So I hope that some of our research effort will go into some of these commercial considerations because they are inseparable from the success of the industry. In that respect, research ought to be on issues such as the weight factors, the packing factors, what can be done to ensure that the best possible facilities are there to enable an export industry of that kind to be sustained, to be efficient and to be contained within the cost structure that enables the individual fisherman to do his job, to do it well and to do it not only in his own interests but also in the interests of a very important industry and in the interests of Australia. In the main, I commend the Government on the proposals. I have raised a number of matters that I hope will be given consideration. I hope that the Minister for Resources will, as he has done in so many other spheres over a period, ensure that the welfare of this industry is paramount in the administration of the funds that are raised through the research levies proposed in this legislation. Mr COWAN(Lyne)(5.50) —I was pleased to hear the honourable member for Page (Mr Ian Robinson) raise some fundamental issues concerning the fishing industry. I wish to speak on a few of those issues. I am sure the Minister for Resources (Mr Peter Morris) does not mind, because he knows that I have some knowledge of the fishing industry, having chaired a parliamentary select committee on the industry in the New South Wales Parliament in 1974-75. Naturally, the matters dealt with by that committee were more or less confined to State affairs of the industry, but what constitutes State affairs is basically also the Commonwealth's responsibility, because the situations are similar. It is exciting to see the Fishing Industry Research and Development Bill, the Fishing Industry Research Amendment Bill and the Fishing Legislation Amendment Bill before the Parliament because they deal with an industry that holds a wonderful future for our fishermen, for all Australians and for our economy and the balance of trade. I often think of the industry's wonderful potential for development. The honourable member for Page spoke about the manner in which the environmentalists are using pressure to close the estuaries to fishing and basically to leave them to the amateurs. I am sure that this will continue as time goes on. However, the broad area of sea around Australia provides a tremendous challenge for us to locate, research, catch and deal with the very great fish resource that exists around the continent. I am pleased to see that greater research is embodied and foreseen in the legislation before the House. I am pleased that a Commonwealth vessel-I will not query its operations because I can recall the Kapala in New South Wales which carried out much valuable research-is to be provided to go further afield around the shores of Australia to locate fish and prawns and the other resources that we know are there. There has always been a query as to whether we can fish out a resource. I have heard the fish biologists discuss on a number of occasions whether the States should have closed fisheries. I do not know. I will not enter that debate, but I believe that, with careful management, we can sustain the fish resource that we have around Australia. We must always keep in mind that a lot of that resource comprises the migratory fish from areas that have been fished out by other countries. We know that up to 400 overseas fishing boats have been fishing around the Australian shores for years. They are certainly affecting the resource that we are debating today. I am sure that there is a greater understanding of this, with the International Convention on the Law of the Sea and other negotiations between the continents concerned, and that we will be able to have a greater share of the existing resource. The Japanese, the Poles, the South Africans or the Taiwanese may have a greater knowledge of the fishing grounds around the Australian continent than we do. This is an important aspect. It is possible that this is the case because they study the currents and know the migratory trend of the fish and are therefore able to assess, as a miner is able to locate the ore, where the fish will be-and they go after the fish. This is a logical thing to occur. I come back to what the honourable member for Page has said. His electorate, like mine, is on the eastern coast of Australia, and we have a fair bit to do with fishermen. We should never forget that the fisherman is an individualist. He is like the farmer. It is hard to organise him, but fishermen have come together over the years through sheer necessity. From my knowledge of them, and I am sure the Minister will agree with me, there are today fishermen within the industry who are competent and capable of managing their own affairs. This is an important factor. They are men who know about the operation of the catch and the processing and packaging of the fish and what the consumer wants. This is important for our catch and its distribution. I am sure that those people, who are managing the co-operatives and serving upon the various State and Commonwealth fishing committees, are quite capable of serving on the Fishing Industry Research and Development Council. They are capable of conducting and administering the industry in the way we would like to see. I am sometimes concerned about the smaller operator within the industry, who has been spoken about in this debate. The smaller operator, as the honourable member for Page said, is the backbone of the industry. We used to see him in the estuaries pulling or pushing his boat around, catching the mullet. He had a roller on the back of his pulling boat with which he ran out the net and hauled it in on the shores of the rivers. This happens also in our seas. Many people object to mullet being caught at spawning times. I suppose there is a logical reason for objecting to that. But these small fishermen are the people who founded the industry. Their problems today, as the honourable member for Page said, lie in the costs of acquiring the vessels and the plant to enable them to operate efficiently either within the estuaries or right out to sea. If I were to enter the fishing industry today as a small man with one or two deckhands, I estimate that to go outside a 15- or 20-mile area would cost a quarter of a million dollars. There would be the cost of purchasing a boat, of equipping it with plant and equipping the operators to take the catch. It costs at least $100 a night, if a fisherman is to do his job, to take a diesel boat out at night to fish and come back in the morning. The cost of refrigeration is high. This is high cost industry generally for the operator. I am concerned in particular with the $295 charge introduced in the Budget. I ask the Minister to explain the reason for that. I have had many objections within the electorate of Lyne from people who feel that that extra cost is a burden that they should not bear. There are freight costs and the costs of processing, which are well beyond the registration costs of the boats, et cetera. I understand that approximately 6,000 fishermen are registered with the Commonwealth or the States to operate vessels in Commonwealth waters. I know that time is short. I have listed a few of the issues that concern me. I hope that we can continue research and that we can build research up. I hope that the Government will confer more and more with members of the industry, because they have the ability to assist and should have some say in the direction that research is to take. Undoubtedly, the industry will go ahead if this is the case. We must always keep in mind that our best market for fish is in Australia, on our own doorstep. It is lovely to see the little co-operatives that are scattered up and down the coast supplying their fresh fish on the floor of the market in Sydney, Melbourne, Adelaide, Perth or Brisbane and to know that there is room either within the fishing co-operative concerned or on the marketing floor to process the extra catch. The industry produces a glut of fish at certain times of the year-for instance, flathead and mullet from the coastal areas, for which fishermen almost receive an account and not a cheque, because of oversupply. A lot of the problems in the industry have been overcome. The industry in Australia faces a new front and, as I said earlier, a very exciting future. Mr PETER MORRIS(Shortland-Minister for Resources)(6.01) —in reply-I thank honourable members who have participated in this afternoon's debate-the Deputy Leader of the National Party of Australia, the honourable member for Murray (Mr Lloyd); the honourable member for Wannon (Mr Hawker); the honourable member for Eden-Monaro (Mr Snow); the honourable member for Kalgoorlie (Mr Campbell); the honourable member for Capricornia (Mr Wright); the honourable member for O'Connor (Mr Tuckey); the honourable member for Dawson (Mr Braithwaite); the honourable member for Page (Mr Ian Robinson); and the honourable member for Lyne (Mr Cowan). I am pleased that the Opposition supports the package of fishing industry Bills before the House. Some minor differences have been raised, and a number of issues. I will do my best, within the available time, to deal with those that have been brought to my attention by honourable members. I was unable to be in the chamber during the contributions of the Deputy Leader of the National Party, the honourable member for Wannon and the honourable member for Eden-Monaro. As I said in my second reading speech, the fisheries industry is undergoing a profound change. As honourable members have reiterated during the debate, it is an industry with a growing future. There is a finite limit on the resources that are available within the industry. There is a responsibility upon those at a State and Federal government level, members of this chamber and those within the industry itself to manage those resources wisely. That matter was mentioned by the honourable member for Page. A number of decisions made by government over recent weeks bear upon this. The Australian Fisheries Council-that is, the State and Federal Ministers responsible for fisheries-met last Friday in Melbourne. At that meeting the Council resolved, in respect of the southern shark fishery, that there be a reduction in the effort being applied. Details of that are contained in a statement which we released on Friday, 23 October. Similarly, on the same day I announced, with the responsible Minister in Queensland, Minister Harper, new entry criteria for the Torres Strait prawn fishery. We stated that, under the new arrangement, vessel licences for the prawn fishery and the Australian component of the Torres Strait protected zone would be renewed after 1 January 1988 only if the vessels had operated in the fishery in any two years during the period 1 January 1984 to 31 December 1986. The problem there is that of the 500 vessels that are licensed to operate only about 130 actually trawled in that period. We want to get the fishery back to a level of effort that is commensurate with the resources that are there. It is part of this overall approach of carefully, wisely and responsibly utilising the finite resource that is there. On 28 September I announced-this was referred to by one of the speakers in the debate-the Government's decision to invite interested parties to express their interest in a new development plan for the section of coast out to some 200 nautical miles between Barranjoey Point, which is effectively the Hawkesbury River, and Cape York. We are looking there at deep water fishing and at vessels with a recent history of successful trawling at depths greater than 900 metres, with priority being given to suitable Australian fishing boat operators. Again, during the debate a number of speakers referred to resources. There are resources there. We are sure of that. We do not know how much. Even the honourable member for Lyne, in his concluding remarks, referred to other countries which, in his opinion, know more about our resources, their extent, their variety and their nature, than we do. The point that he made and which I make is that we need to explore. We need to carry out greater research to note carefully what resources, to the best of our knowledge, are there. Having determined that, we need to manage them in as efficient a manner as possible. The honourable member referred also to the migratory species that move around in the various waters. Again, that comes back to the question of knowledge and the need for research. The honourable member referred to the fee of $295 that has been levied. It is part of the approach that those who utilise the services provided to the industry should meet the costs of the services provided to the industry. I will give the honourable member a note later explaining how the figure was arrived at. Mr Lloyd —But it was stated in the Budget announcement of new initiatives. That doesn't sound like a new initiative. Mr PETER MORRIS —I will also make that available to the Deputy Leader of the National Party. The honourable member for Page also raised the issue of air freight rates. Given that the approach for sectors of the industry is to target certain species and market niches, if we are to use an expensive form of freight such as air freight, the provision of that service must be on a commercial basis. There is no future in trying to build a business, industry or market based upon a service that is provided on an as-available kind of basis. The people who fly aeroplanes also want to earn a return. They also want a reward for the provision of their service. That market is very much an open market. The opportunity is there to provide an air freight service if there are customers who are able to use it at the rates that need to be charged to ensure that there is a return for both parties involved. The Deputy Leader of the National Party referred to accountability for levies that are raised. All levies are raised to offset government expenditure on managed fisheries, in accordance with detailed fishery management budgets that have been discussed fully with the industry and the fishery concerned. The increased percentage recovery is based on the application of the Government's user pay principle and the intention of increasing the rate of recovery over the next three years. I understand that the honourable member referred to an 84 per cent on-cost. I can advise him that this is the standard on-cost percentage that is used for this purpose. In respect of the size of the Australian Fisheries Service, the additional positions are being used to implement the Government's new policy proposals that were announced in the Budget. In respect of the review of fishery management institutional arrangements, I will be announcing details of the scope and structure of the inquiry into the administration of Commonwealth fisheries in the next few weeks. There are a few details yet to be put into place. The one point to make out of all this is that we must move to a situation whereby those who use the services contribute to the cost of providing them. That is the revenue side of the equation. On the other side of the equation is expenditure. With expenditure goes efficiency. Not only is there an obligation upon the users of the services to contribute to the costs of providing them but also there is an obligation upon government and the service itself to ensure that we carry out our task in an efficient manner. We will certainly be looking at that. It is not just a matter of revenue covering costs; it is a matter of ensuring that the tasks are carried out in an efficient and reliable manner. That is given as far as I am concerned. The issue of industry participating more fully in the management of fisheries will be taken up in the inquiry. That has been brought to my attention and I understand it. The proper way to deal with it is not by an ad hoc decision by government or me, but rather in the overall approach to the review of institutional arrangements that I mentioned earlier. The honourable member for Wannon referred to value added products. The Government is looking at the value added aspects of fishery products. We agree that there is scope to extend the range of seafoods produced in Australia. I make the point that, coming from a region such as that of the honourable member for Lyne and the honourable member for Page, I have had some little knowledge over the years of the fisheries industry, not in the detail required by the legislation before the House but in earlier years. There has to be an absolute reliability on quality standards. That is one area in which we have room for improvement. If we are to expand our market I believe that there is significant potential for product innovation. There are many fish products at the moment for which greater markets could be developed if there was a bit more innovation in the processing of those products and those fisheries. There needs to be a greater targeting of markets. All of those things are happening. As I mentioned previously, we are going through a period of profound change for the industry. I have every confidence that the industry will rise to the challenges that are before it and to the opportunities that exist for it. The honourable member for Kalgoorlie referred to the issue of sport fishermen versus professional fishermen. Under the off-shore constitutional settlement, this is a matter for the State governments. Different States have different views. I am sure that that is a matter that will resolve itself as time progresses. The views he expressed have been expressed by a number of other members. In regard to the comments by the honourable member for O'Connor about the Fishing Industry Research and Development Council, and research generally, the Fishing Industry Research and Development Council will be able to direct research and development resources to the development of the resource, including problems such as the crown-of-thorn starfish, the operation of fishing businesses and their problems, such as the means of cost containment. Again, that is a matter of business and enterprise efficiency. The industry, in the process of becoming more professional, will have to look at this matter. I referred in my second reading speech to the Fishing Industry Research Trust Account and the fact that it has supported scientific and biological research in many Australian fisheries. I repeat that it has provided funds for exploratory fishing projects, fishing gear technology studies, education for fishermen and research into the handling and marketing of fish and fish products. The Commonwealth Scientific and Industrial Research Organisation (CSIRO), universities, government agencies, fishing companies and individual fishermen have received funding from the account to undertake research. The existing rural industries research council findings has proved to be heavily implemented. If one refers to that as an example, one can expect that, in respect of the fishing industry, there will also be a high uptake of the Research and Development Council's research results. Overall, that has provided a good return to industry and to government. The annual reports to be submitted by the Council will be a means of accounting for research results. The honourable member for O'Connor also mentioned the research vessel for the CSIRO. The Cabinet decision has been that, if the CSIRO gets a new vessel, the money in the old fund will be available to help pay for it. But the report of the consultant engaged to advise the CSIRO has yet to be delivered. Since the report has not been received, no decision has been taken. The receipt of the report, and the consideration of recommendations in that report, are matters for future consideration when they come to hand. The honourable member for Capricornia referred to a number of matters, such as assistance to fishermen, access to low cost loans and insurance problems. They are all problems that can be dealt with by the Research and Development Council as it develops in the industry, as it develops its expertise and as the level of participation increases. I conclude by thanking those honourable members who participated in the debate. It has been a constructive and, in the main, positive debate that has been supported by the Opposition. The industry does have a great opportunity before it, but it must pick up that opportunity. There must be an increasing level of initiative and an increasing level of professionalism. As we move towards improving arrangements with the States under the off-shore constitutional settlement, the development of the Research Council-the things I have already mentioned-and the review of the existing Commonwealth institutional arrangements, I have every confidence that we are looking at an industry that can make a greater contribution to export income. I commend the package of Bills to the House. 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. Consideration resumed from 18 September, on motion by Mr Peter Morris: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Peter Morris) read a third time. Consideration resumed from 18 September, on motion by Mr Peter Morris: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Peter Morris) read a third time. Debate resumed from 18 September, on motion by Mr Holding: That the Bill be now read a second time. Mr HUMPHREYS(Griffith-Minister for Veterans' Affairs) —I present the replacement explanatory memorandum to the Primary Industry Bank Repeal Bill 1987. This replacement is necessary because the original contained a citation error. The amendment does not affect the substance of the memorandum. I note that copies of the replacement memorandum have been distributed to honourable members. Mr PEACOCK(Kooyong)(6.17) —The purpose of the Primary Industry Bank Repeal Bill is to seek the repeal of the Primary Industry Bank Act 1977 and to make certain consequential amendments to the Banking Act 1959. The former Act is now redundant, following the sale of the Government's interest in the Primary Industry Bank of Australia (PIBA) to the Rural and Industries Bank of Western Australia, and the granting of a banking authority to the Primary Industry Bank under section 9 of the Banking Act. The Primary Industry Bank, of course, was established in 1978 under the provision of an Act of this Parliament. Its role was specifically to provide long term funding to the rural sector through a refinance facility. Prior to its acquisition by the Rural and Industries Bank, the Commonwealth had a 12.5 per cent shareholding and the four major trading banks, and a consortium of four State banks, each had 17.5 per cent of the shares. The Government argues that the deregulation of the financial system resulted in there being no further need for direct Commonwealth involvement in the bank. Also, the bank's multiple ownership by a consortium of other financial institutions, and the Commonwealth, was proving unwieldy. These are, in our view, reasonable arguments. Indeed, I am aware that in some aspects of its operations the unusual ownership by so many other competing banks hampered the ability of PIBA satisfactorily to provide its flexible loan facilities. However, the real reason behind the Government's motives for selling its interest in PIBA is centred on the $2.5m it received. Those receipts have been counted against the Government's major asset sales for the 1987-88 Budget. What that represents is not really a commitment to efficiency, but a commitment by this Government to fund unjustifiably high levels of public expenditure by an ever-increasing rise in revenue collection. This exercise is simply another effort by the Government to rake in the cash, and it is developing into a habit. Like a junkie it needs to get larger and larger fixes to satisfy its unseemly habit. And, like a junkie, that habit, unless stopped in its tracks, will lead to the inevitable decay of the body economic. In one area, the evidence of the decay, caused by this Government's inadequate policies, is obvious, that is, the Australian Labor Party's debt-the quadrupling of our foreign debt under the Hawke Labor Government-the $83 million foreign debt that has been allowed to accumulate. Honourable members will be aware that the Budget Papers record that total revenue collections have increased by around 75 per cent over the course of this Government's term in office. In 1987-88 alone revenue is to increase by $5.5 billion over the previous year-$5.5 billion in additional revenue. And the sale of assets, like the one being provided for in this Bill, is simply a belated means that this Government has found as its scratches around to finance its next hit of increased expenditures. I realise that $2.5m, on a national scale in the Budget, is not much; but when you are desperate, every little bit helps. But it does not really help, not in reality. It simply postpones the day when the needed quality expenditure cuts will be made. No wonder Senator Peter Walsh, the Government's own Minister for Finance, is frightened by the prospect of going further down the Argentinean road. Honourable members will already be aware of our arguments that asset sales should not be counted as reducing the Budget deficit. The proceeds from assets sales should go to retire debt, not to assist in funding the deficit. When there is $1 billion of asset sales, there is $1 billion of underlying deficit. Of course, in addition it is legitimate to add to that the one-off nature of the Reserve Bank and Mint profits, on which the Government is relying for financing its 1987-88 Budget on top of the proceeds of asset sales. That has led us to say time and again that the process of adjustment of domestic policies in the face of the blowout in our external difficulties is just too slow. The Government is not moving fast enough to address our problems-to allow us adequately to cope with precipitous external shocks such as the current great share market tumble. But in addition, the sale of PIBA raises again the important public debate of privatisation. The Labor Party is at sixes and sevens over this debate. There is this ideology soul-searching by the socialists across the floor. The arguments of Ben Chifley for nationalisation are being brought into question. Ben Chifley's philosophies, the hardened, seemingly deep-rooted philophies of Labor, are allegedly being turned on their head. But are they seeing the real light, the light of rational economic discussion that we in the Opposition support, as against their dear, fast and seemingly fastened, mystic but moribund socialist `light on the hill'. It is extremely hard to tell. We all recall the Prime Minister (Mr Hawke) sermonising that only the devil incarnate would venture to support privatisation-that crude 13-letter word, according to Labor. Let me quote the man. On 21 November 1985, in this House, the current Prime Minister stated: They know, as anyone who thinks about the issue of privatisation knows, that it would mean higher prices, higher costs, higher taxes and higher fares. What a monstrous prospect he sought to paint. Yet after the recent election, the very same Prime Minister began to talk of the necessity of reviewing the Government's privatisation policy. We will not worry here about the fact that his senior Ministers seemed a little confused about the manner in which the Prime Minister initiated the debate. We can remember Senator Gareth Evans and Senator Button, those Ministers carrying the major responsibilities for bodies ripe for sale, criticising the Prime Minister for his lack of finesse and blundering style. That is their criticism, not just ours. Instead, we must ask why the Prime Minister has done a back flip. Why has he changed his story? I doubt that the real reasons have much to do with the allocative efficiency of resources. The reasons lie more at the heart of the Government's inability appropriately to address the need for outlay reductions. This Labor Government now realises that many of those authorities it owns will soon need large injections of capital, especially the airlines, Qantas and Australian Airlines. In addition, those authorities involved in communications-Telecom, the Overseas Telecommunications Commission and Aussat-also have huge capital requirements so as to maintain their grasp on new technologies. Capital requirements involve funding straight from the Budget, or borrowing under the Loan Council arrangements. The Government is scared of the prospect of payments from the Budget because it knows that it has not made, nor is it prepared to make, enough quality cuts to provide room for more legitimate types of capital expenditure such as these. That means either higher tax receipts or allowing the authorities to borrow themselves. Not even a destructive government such as this one, which has been neglectful of the effect of the taxation burdens on the ordinary Australian, could seriously contemplate further heavy imposts. Nor do I think the Government wants to resort to any further increase in the Budget deficit. Another alternative is for the authorities to borrow directly to meet their needs. Nonetheless, that also will affect the public sector borrowing requirement (PSBR) directly and, more importantly, make it difficult for the Commonwealth to convince the State governments to rein in the borrowing programs of their authorities under the Loan Council arrangements. So it is obvious that a main reason for contemplating privatisation is that the Government has forced itself into a corner. Reducing the PSBR is a commendable policy. The best way to do that is to cut recurrent expenditures. Therefore, I am concerned that the Government may be forced into unnecessarily quick sales, to the detriment of taxpayers, because of its inability to make the necessary outlay cuts elsewhere. Nonetheless, while given these concerns, and the fact that the Government's reasons are basically confused, the results it achieves by selling many of these authorities hold the prospect of being very beneficial. We in the Opposition have always supported free enterprise over government ownership, and the associated incentives that involves will, in the main, deliver the society to its greatest potential. Of course, there are situations in the markets which can legitimately involve a government. Some type of intervention will sometimes be warranted. However, that will not necessarily justify the need for public ownership. In many cases, resort to subsidies, taxation concessions or trade practices legislation will be preferable. Such issues can be very involved. They require calm and rational debate within the community. In the process, the return of many publicly owned assets to private hands will not be detrimental but, rather, advantageous to the consumer. It will remove future burdens on the taxpayer. It is interesting to note that PIBA was bought by the Rural and Industries Bank of Western Australia, which is itself owned by the Western Australian Government. We in the Opposition would have been happier if it had been sold to the private sector. Indeed, we propose further asset sales along the guidelines which we hope the Government will adopt. They are: First, there must be demonstrable benefits to consumers and/or taxpayers; secondly, the position and job security of existing employees will be given special consideration and sale of shares to employees will be encouraged whenever possible; thirdly, the quality and availability of services to remote areas will not be allowed to deteriorate; fourthly, any large scale sales will be timed so as to avoid disruption of capital markets; and fifthly, sale proceeds will not be used to finance new government expenditure but will be directed towards reducing the accumulated public debt. I wish to conclude by saying that we commend the sale of PIBA by the Commonwealth Government, and accordingly do not oppose the Bill. Nonetheless, we doubt the Government's questionable motives in doing so and again urge it to focus greater attention on expenditure cutting, rather than asset sales, to reduce the public sector's call on financial markets. Sitting suspended from 6.29 to 8 p.m. Mr SNOW(Eden-Monaro)(8.00) —Mr Deputy Speaker-(Quorum formed) The Primary Industry Bank Repeal Bill repeals the Primary Industry Bank Act 1977. Government interest in the Primary Industry Bank of Australia (PIBA) has been sold to the Rural and Industries Bank of Western Australia. The sale resulted in revenue to the Commonwealth of $2.5m for its 12 1/2 per cent shareholding. The Deputy Leader of the Opposition, the honourable member for Kooyong (Mr Peacock), used the debate to launch into a diatribe about privatisation. Typically, he had two bob each way and, while he pointed out that the Government should be cautious about selling its own properties, he also applauded the practice. There is an enormous difference between the manner in which the Opposition deals with government ownership and the way the Government deals with it. Where the Opposition is religious about privatisation, for instance of Telecom Australia, the Overseas Telecommunications Commission and Australia Post-in fact they would all go if the Liberals had their way-the Government looks at each industry separately. The Government has not been forced into a corner on the future of PIBA and it does not make unnecessary quick sales. It looked at Australian Airlines, for instance, and appreciated the fact that that airline had been hampered by a number of requirements of government. I believe that through the deregulation policy and subsequent policies the Government will assist Australian Airlines to compete more fairly in the commercial sector. PIBA no longer requires Federal Government involvement. The relationship, within the ownership, between the consortium of banks and the Commonwealth has been described by the Minister Assisting the Treasurer, the Minister for Employment Services and Youth Affairs (Mr Holding), as having become unwieldy. Fortunately, the Government sought to ensure that the rural sector would not be disadvantaged in its access to PIBA banking services and would be represented on the PIBA Board. The recently released annual report of the Primary Industry Bank of Australia issued on 22 October 1987 makes a number of important points about the record of PIBA. It shows clearly that PIBA is certainly not in a decline, that it is an ongoing, useful organisation assisting primary industry in particular. For instance, the report states: In order to maintain a competitive position in world markets, Australian primary producers have a need to be constantly improving their properties. The funding of capital improvements is often built into a PIBA financing package. The purchase of land is the purpose for which PIBA's funds are most often used. Successful farmers are matching improved technology and management skills with increased farming areas. In the initial years of a land purchase, it is important to have a flexible loan facility that does not demand principal reductions and thus allows a breathing space for progressive growth. The report also mentions the participation of PIBA in pasture improvement. The report states: Australian farmers are encouraged to ensure that this country's national land assets are preserved in a condition that is conducive to ongoing productivity. Agriculture is one sector of the Australian economy that can be truly described as being based on a `renewable resource'. It is important that the quality of this resource be maintained for the present and future generations. PIBA's interest-only facility fits in well with this type of programme as it does not require repayment of principal before the benefits can come to fruition. In referring to livestock the report states: An essential element of the management of Australia's livestock industries is a regular upgrading and culling programme. This aspect can be accommodated within the PIBA loan package. Stocking programmes can be adjusted to take advantage of the extra feed available during good seasons or when opportunistic market conditions appear. The timing of consignment of stock to the saleyard must have some degree of flexibility if maximum prices are to be obtained. PIBA recognises this aspect and is able to provide the required degree of flexibility in its loan packages. Similarly it is recognised that a period of herd or flock build-up can be a time when loan flexibility is important to the borrower. The Primary Industry Bank of Australia is able to come in where often the client's own bank is unable to come in. In regard to working capital the report states: Much of Australia's agricultural areas are subject to drought, fire, flood or plagues at some time. It is important to have a bank that understands these potential difficulties and can help when the time comes. Against a background of seasonal uncertainty and price variations, it is often difficult for a farmer to plan principal repayments without jeopardising future working capital. To this end PIBA can restructure existing borrowings to increase the funds available for working capital. Similarly, dissolution of farm partnerships or untimely death can often require flexibility in loan arrangements. It is important to have a bank that can be helpful at these times. PIBA has very often come to the party. In conclusion, I mention that PIBA is a growing bank. Offices have been opened in the previous financial year in Brisbane and in Perth. The after tax profit increase of 22.5 per cent over the previous year's profit was an excellent record. A full and unrestricted national banking authority was granted to the bank in June 1987. In the 1986-87 financial year, the bank achieved total self-sufficiency in its operations with the repayment of the balance of loan moneys advanced to it by the Commonwealth of Australia. I join other members in congratulating the Primary Industry Bank of Australia on its record and wishing it well under the new arrangements. Mr HAWKER(Wannon)(8.09) —I am very happy to endorse the remarks of the honourable member for Eden-Monaro (Mr Snow) congratulating the Primary Industry Bank of Australia (PIBA) on its performance. It certainly has proved to be a very sound bank, unlike some others. I might come back to that in a minute. I have to take exception to what he said about the Deputy Leader of the Opposition, the honourable member for Kooyong (Mr Peacock), when he talked about his having two bob each way on privatisation. He obviously completely misheard the Deputy Leader of the Opposition because he was talking very clearly about the Prime Minister (Mr Hawke) having two bob each way. For the benefit of honourable members present, I will repeat some of the words of the Deputy Leader of the Opposition earlier in this debate. He was quoting none other than the Prime Minister himself. I think it is worth reminding all honourable members that it was only in 1985, in fact on 21 November 1985, in this chamber, that the Prime Minister stated: They know, as anyone who thinks about the issue of privatisation knows, that it would mean higher prices, higher costs, higher taxes and higher fares. Yet it is remarkable, talking about two bob each way, to see the complete back flip of the present Government on the issue of privatisation as soon as the election is over. Whilst no-one is arguing about the sale of the Government's minority shareholding in the Primary Industry Bank to the Rural and Industries Bank of Western Australia, the point is that this is a form of privatisation-nothing more and nothing less. I think the member for Eden-Monaro ought to check his facts on that matter because the Deputy Leader of the Opposition was quite clear on it when he was talking about the Government's two-faced approach to privatisation. Mr Andrew —Hear, hear! Well said. Mr HAWKER —I thank the honourable member. The Primary Industry Bank does have a very good record. I was very heartened to read in the latest annual report, the 1987 annual report, that the Chairman, when speaking of the transfer of the Commonwealth's share ownership to the Rural and Industries Bank of Western Australia, said that the bank's head office is to remain in Sydney and special emphasis will continue to be given to its business operations in the rural sector. That is very heartening to hear because it has certainly played a very important role in the rural industries ever since it was begun by the previous Government in 1978. I notice also in the Chairman's address that, with its growth and profit, it is now the seventh largest banking organisation in Australia, which is quite an achievement in just on 10 years. I think all honourable members would be quite happy to congratulate the bank on that effort. My comments tonight will be confined mostly to the role of the old income equalisation deposit scheme, as it was under the previous Government, and its connection with the Primary Industry Bank. As some honourable members will remember, the income equalisation deposit scheme was begun by the previous Government as a means of trying to help primary producers not only to iron out some of the fluctuations in their incomes which, unfortunately, with the best will in the world is unavoidable, but also as a self-help measure to try to get primary producers to put money aside in the good years and to be able to draw on it in the bad years so that they could remain quite self-sufficient. Mr Andrew —And prudent. Mr HAWKER —And prudent. I thank the honourable member. There is also another point about the income equalisation deposit scheme which should not be forgotten. It was a means of trying to bring fairness and equity into the tax system as it affects primary producers. As honourable members will know, if they do their homework and their sums, someone on a fluctuating income will pay more tax on the total amount of income over a number of years than someone who is on a constant income. This is a point that seems to have been forgotten by the Government when it was so quick to kill the scheme in 1984. We listened to the Minister for Social Security (Mr Howe) in his diatribe today about fairness and equity. He seems to have blinkered vision when it comes to thinking about what fairness and equity is in the tax system as it affects people on fluctuating incomes-not just primary producers, but also some of our professional sportsmen who find themselves in a similar situation. It was rather unfortunate that the Government chose to knock off the income equalisation deposit scheme in 1984. It did have the scope to assist the Primary Industry Bank and in 1978 the opportunity was made available to the Primary Industry Bank, although the bank did not actually take it up, for income equalisation deposit scheme deposits that were held by the Commonwealth to be advanced to the Primary Industry Bank as a means of giving it low interest finance. As honourable members will remember, the income equalisation deposit scheme had a fairly low return of interest, partly because it was a means of smoothing out income. Farmers could defer income in a year of high returns and withdraw their deposits in a year of low returns, thereby deferring a tax payment until the year that they withdrew those deposits. Accordingly, there was only a relatively low rate of interest. Those funds were offered to the Primary Industry Bank in 1978 as a means of reducing marginally, not dramatically, the interest rates that the Primary Industry Bank could then charge on the money it was lending out to the primary industry. It was a very good opportunity for the Primary Industry Bank and while it did not actually avail itself of those funds it did allow it to borrow at a slightly more favourable rate because the people who were lending the money to it knew that PIBA had this opportunity, and therefore additional security, when they made loans to the bank. In passing, it should also be mentioned that the income equalisation deposit scheme should be reintroduced. I hope that the Government will have another look at it because there is no doubt that such a scheme provides one of the best avenues for farmers to smooth out their fluctuating incomes, to be able to look after themselves when the bad times come, as invariably they do-as all wheat farmers will tell us, they are right on their doorsteps now-and it also gives them the opportunity not to have to pay more tax than someone who is on a reasonably constant income. Because there is a sliding scale of income tax rates, someone who has no income one year and a relatively larger income the following year will pay more tax than the person who earns the mean of that income over the same two years. I would also like to remind honourable members that the income equalisation deposit scheme did not interfere with market forces, which was very important when it came to giving market signals back to the rural producer. It had significant advantages over any market stabilisation scheme that tended to blur the income that a commodity was earning from one year to the next. It was also a voluntary scheme, so there was no obligation in it and farmers could go into it or leave the scheme according to their circumstances. When talking about the Primary Industry Bank, I think it is probably worth drawing some comparisons with what is happening in the agricultural banks in the United States of America (USA). I think we are very fortunate that we have not seen this happen in Australia. We are unlikely to see it happen in Australia because our banking system, particularly amongst the one or two agricultural banks, has been far more responsible in its approach to lending. I will quote from a very interesting article in May this year from the Federal Reserve Bank of St Louis. The article is entitled `Agricultural Banks: Causes of Failures and the Conditions of Survivors'. It is something a bit foreign to us in more ways than one because we have not seen an agricultural bank do something like this. The article states: The number of bank failures- this is in the United States- has risen sharply in recent years. From 1943 to 1981, no more than 17 commercial banks ever failed in a single year. Since 1982, when 34 banks failed- that is double the number- the number of failures has risen each year, reaching 144 in 1986. . . . . In the years 1984 through 1986, about half of the 340 failed banks were agricultural banks. Agricultural banks make up about one-third of all banks. I have no doubt that it is important to note these statistics. They give a very ominous warning about the state of agriculture in the United States. While we are quick to condemn the United States for its support for farmers, I think we have to ameliorate some of our comments a little bit with the realisation that farmers in the United States have been going through fairly tough times as well. I guess the message from all that is that government support in the long run will not put farmers in a stronger position than less government support. In talking about the Primary Industry Bank, it is worth looking at the economic climate we are facing today. I do not think in an opportunity like this I should miss pointing out some of the real concerns of people in the farming industry, the people who have been forced to avail themselves of the banks such as the Primary Industry Bank when, in many cases, they probably wished they had not. I am just talking about the general state of the Australian economy today, particularly its state in the last week or so. It was pointed out in the debate earlier today by the Leader of the Opposition (Mr Howard) that Australia has some serious economic problems, whichever way one looks at it. We had a so-called favourable response to the Budget which was finally punctured when the Minister for Finance (Senator Walsh) gave a slightly more frank account of the situation than the Treasurer (Mr Keating) was prepared to give. When we look beneath the surface of the Australian economy, we see cause for concern. Again and again, we have spoken about Australia's rising overseas debt. In gross terms it has trebled under this Government. The Treasurer keeps talking about the fundamentals, and this is a fundamental which, by any measure, is bad. As the Leader of the Opposition pointed out today, our overseas debt is 40 per cent of our gross domestic product (GDP) while the overseas debt of the US is only 13 per cent. While we may be concerned for other reasons about the US economy, on the question of overseas debt, there is no doubt that we are in a much more parlous situation than it is. Allowing for inflation, again taking the Leader of the Opposition's figures, as he pointed out so clearly, our overseas debt, expressed as a percentage of GDP, has doubled in the last four years. Again, this is great cause for concern, and it is an even greater cause for concern when we look at the balance of trade figures. Last month there was another dramatic adverse trade figure. Whichever way you look at it, this is cause for concern. We are still going further into debt. When we talk about the warnings and the fundamentals, by any measure the 1985 drop in the value of the Australian dollar was as clear a warning as anyone would have needed to tell us that there was something fundamentally wrong with the Australian economy. Yet, the Treasurer chose to ignore this warning and to continue to talk up the state of our economy. Later on, we found that our AAA credit rating was wiped out. However, he still chose to ignore it until last year when he made some reference, almost in an aside, to a banana republic, and almost as soon as he made that reference, he seemed to forget it. In this light, we must look at what happened on the stock markets in the last week. The dramatic downturn in share market prices, even though it has come from a very high level, is a cause for some concern. I do not want to play it up to anything more than that at this stage. There is a risk of two things. First of all, there is the effect it could have on the Budget revenue, which could be quite significant. The other even more serious concern is that, should it not be handled very carefully and skilfully, there is a real risk in a loss of confidence not just in the share market but in wider aspects of the Australian economy. I suggest this is something that the Australian Government ought to be addressing and taking far more seriously than the Treasurer would have us believe. The situation with the Rothwells bank is a stark reminder of how seriously the business community takes some of the things that have happened in the last week. If the Government ignores that, it does so at its own peril. One of the clearest warnings, which the Treasurer ought to have taken, was from the Minister for Finance, Senator Walsh, his colleague in the Senate, who was reported in the Sydney Morning Herald on 21 September, a month ago, as saying, when talking about Australia: A country which has a high level of foreign debt and a continuing large current account deficit is a country which has few options. We've been a lucky country for a long time, not so lucky any more, and if we don't challenge-- Mr Andrew —Not so lucky any more, not since the government changed. Mr HAWKER —Yes, since the government changed. Senator Walsh continued: We've been a lucky country for a long time, not so lucky any more, and if we don't challenge most of the absurd notions that the majority of Australians have about what they are entitled to and what's essential to them and what isn't, then we are going down the Argentinean road. That is a stark warning, if ever there was one, about the fundamentals-something at which the Treasurer ought to be looking far more seriously. Even today, in the Age, there is another clear warning. In its editorial, it made this stark warning to the Government about the fundamentals: The crash demands fundamental change. Nothing could be clearer. The Age editorial continues: How sound the ``economic fundamentals'' are is a matter of debate. The Treasurer wants to use the word `fundamental' and here it is in one of our leading newspapers in Australia, which is drawing his attention to it. It continues: The recent market collapse has deepened that concern, although not to the point where comparisons with the 1929 crash . . . are compelling. But no one should allow the necessary expressions of hope and caution to mask the facts. The ``fundamentals'' are not so sound that a severe recession can be ruled out. That is a very clear warning. Mr Cleeland —What would you do about it? Mr HAWKER —We have been telling the Government for years what to do about it, but it will not listen. Mr Cleeland —Tell us again. Mr HAWKER —One has only to listen-- Mr Andrew —Delay the wage case hearing. Mr HAWKER —Tying wages to productivity would be a good start. We have got to start with the wage hearings, get our balance of trade right and do a lot of things, particularly in the trade area, which the Government has failed to address, to allow exporters to get on with the job that they should be doing. In conclusion, I would like to endorse the words of those who have congratulated the Primary Industry Bank on what it has achieved so far and to wish it every success in what is going on. It is a pity that the Government will not take up that challenge and reintroduce the income equalisation deposit scheme so that it is an effective way for farmers to be able to put money aside in the good years to draw upon in the bad years, and also, to bring this wonderful concept of fairness and equity into the tax systems as it applies to primary producers. Without that, primary producers are often in the situation where, with a similar income to someone with a constant source of income, they are paying a higher rate of tax. (Quorum formed) Mr CLEELAND(McEwen)(8.29) —We are going to hear tonight from members of the Opposition a lot about deregulation and privatisation and a lot of rhetoric about what they would do if they were in government, how they would solve the economic problems facing Australia. The honourable member for Wannon (Mr Hawker) spoke just before me and I deliberately interjected when he said that we must take further action to reduce the imbalance in the Australian current account. I asked him what the Opposition would do. Of course, we did not get a detailed answer. Likewise, we do not get an answer from the Leader of the Opposition (Mr Howard), the honourable member for Bennelong, the former failed Treasurer, when we interject and ask him what the Opposition would do if it were in government. To date, the new shadow Treasurer, the honourable member for Kooyong (Mr Peacock), has not come along and given an alternative opposition policy. There has been no debate whatsoever in this House from the Opposition on the real issues which confront this country. But mind you, Mr Deputy Speaker, members of the Opposition will come in day in and day out and carp, whinge, moan, complain and, by rhetoric, suggest that there are things that can be done. But one can never ever pin them down as to what they would do. For example, one can never get them to say in respect of their tax policy where the 16 per cent cut in expenditure would strike home. Where would it strike home? The Opposition has this very weird and funny notion that by reducing taxes we will increase income. Is not that an absolutely extraordinary concept? Mr Hawker —Madam Deputy Speaker, I take a point of order. This debate is related to the Primary Industry Bank, is it not? Madam DEPUTY SPEAKER(Mrs Darling) —There is no point of order. That appeared to be a question. Mr CLEELAND —That is the sort of interjection that one gets when one challenges the Opposition, when one stands in the House, looks across at this poor Opposition, points the finger and says, `Stand up in this place and debate. Come into this place and give us a fair dinkum debate on what you would do about it'. We do not get it and we will not get it. We will have to wait until the next election before we hear anything from the Opposition. Some time between now and then, members of the Opposition will all get together in their rooms out the back and they will look at regulation and deregulation. They will look at what assets they will dispose of and what assets they will not dispose of, such as the Primary Industry Bank of Australia (PIBA). But they will not give any details. Madam Deputy Speaker, they will talk only in rhetorical terms. Madam DEPUTY SPEAKER —Order! I ask the honourable member for McEwen to get back to the point of the Bill before the House. Mr CLEELAND —Thank you, Madam Deputy Speaker. Of course, in terms of the debate on PIBA, the debate is about deregulation. This is the point on which the Opposition has lodged this debate. It has used this Bill to debate deregulation of financial institutions and the financial structure. The debate, of course, has gone along these lines because the sale by the Government of PIBA was, in fact, part of the financial deregulation introduced by this Government. When the Government talks about deregulation or privatisation, it has a deliberate policy in mind. We do not talk blindly when we talk about deregulation or privatisation. We do not use those words without defining the limitations in which they are going to operate. When we talk about deregulation of the financial sector, we talk about it in terms of the improvement of the competitive position of Australian society. We do not talk about it like Margaret Thatcher or Ronald Reagan do. We talk about it in terms of competition and improvement. The Primary Industry Bank was established in 1978 to carry out functions which were not being fulfilled at that time by the private sector, by the regulated banking industry in Australia. Of course, the Opposition in the 1970s, and even into the 1980s, followed the regulatory line. PIBA was specifically formed to provide refinance to Australian farmers, to the rural sector of this country-an area which the private sector had not picked up or given assistance to. But PIBA no longer had a function since this Government deregulated the banking system in 1986-87. There is no role that the private sector cannot pick up. So PIBA no longer fulfils the social and financial function to the rural sector that it once did. That this is the case is supported by the thinking sector of rural Australia. It is a mistake to think, as some of our National Party of Australia colleagues in this place do, that farmers are all idiots. If one listens to the financial nonsense of members of the National Party, one must form the view that they must believe that every farmer in this country is an ignorant person, that every farmer does not have an economic brain in his head. If one listens to the spokesmen of the Liberal Party of Australia in this place, one must form the opinion that they also believe the same thing. In fact, if one listens to the Liberal Party nominee on the National Farmers Federation, Mr McLachlan-of course, he speaks the Liberal Party line through that organisation-one forms the view that he also obviously believes that farmers are economic illiterates. The reality, of course, is that that is not true. On this occasion the National Farmers Federation, to its credit, has given qualified support to the sale of PIBA. I am very pleased about that because it is very unusual for the National Farmers Federation to make much sense in any of its public statements. I must digress to remind the House that earlier this year the National Farmers Federation selected 29 Federal seats in which to campaign. It was going to play merry hell with the incumbents of those seats. Of course, I would have to say that McEwen was one of those seats in which the National Farmers Federation was going to campaign. McEwen, which was named after the late Sir John McEwen and as such was obviously a lovely National Party target, was going to fall as a result of the efforts of the National Farmers Federation. I am very pleased to say that the reverse happened in McEwen and the other 28 seats in which the National Farmers Federation campaigned. In fact, in my electorate the National Party is the smallest party in terms of primary votes. That Party dropped 30 per cent. The Australian Democrats are next, then the Liberals and then the Labor Party. I only picked up a 2 per cent swing my way on a two-party preferred basis. I hope that in the next election the National Farmers Federation will again come down to McEwen and campaign heavily against me. It will be worth about 2 per cent if they do, and I look forward to their assistance in the next election. Madam Deputy Speaker, I am sorry that I digressed and got a bit carried away. Mr Hawker —Never! Mr CLEELAND —I thank my friend the honourable member for Wannon for his interjection. So far as the deregulation of PIBA is concerned, I indicated--(Quorum formed) For the benefit of members who have just entered the chamber, I point out that I was challenging the Opposition to debate the Government about the Opposition's alternative economic policies. I was challenging the Opposition to tell us once and for all what it would do instead of Opposition members standing up and carping every day of the week-but of course we will not get that. I return to the Bill. I mentioned earlier that even though deregulation has been of benefit in terms of the sale of the Government's share in PIBA, there has been to a certain extent some adverse effect on the rural sector. It has been recognised by the Minister for Primary Industries and Energy (Mr Kerin) that that is indeed the case. The Government has recognised that, and the major instrument for achieving change in this area is through the rural adjustment scheme. Under a new rural adjustment scheme, assistance is available through a 50 per cent interest subsidy for debt reconstruction, farm build-up and farm improvement by primary producers in need who are viable in the long term but unable to obtain commercial finance. Household support and rehabilitation assistance are also available for non-viable producers in need who are considering leaving the industry. The rural adjustment scheme is expected to cost $42m this financial year compared with $34m last financial year. Of this amount, $6.7m is for new loans under the interest subsidy component of the scheme. While this represents a reduction on the level of new lending from last year, reflecting budgetary circumstances and the improved rural outlook, I point out that I hope that members opposite understand that there is in fact an improved rural outlook. In fact, I was chatting to the honourable member for Page (Mr Ian Robinson) just before I started speaking and I pointed out that the farmers in my electorate are primarily fine wool producers who are receiving top prices for their wool at the moment. I have spoken to most of the primary producers in the fine wool industry, in the beef industry and in the rural seed industry, which represents the bulk of agricultural production in my electorate, and I have found that they are not complaining at all but are doing very well. A farmer I was speaking to only last week said that even when the price of wool was down farmers in the electorate were doing quite well because they are quality producers and, I might add, they are not whingers-they are fine farmers with a long tradition of farming. As I said earlier, while $6.7m represents a reduction in the level of new lending from last year, reflecting budgetary circumstances and an improved rural outlook, it is expected that the scheme will finance a record 5 per cent of total rural institutional debt this year. Other important measures include: underwriting assistance to support the prices of some commodities and, in particular, it is expected that an underwriting payout of some $220m will be made in respect of the 1986 wheat crop, with a further smaller payout expected on this year's crop; natural disaster relief arrangements, which provide a Commonwealth subsidy to State expenditure on relief above a base level; and $900,000 being provided this year to assist appropriate non-profit organisations to employ rural financial and adjustment counsellors. So it is clear that the Government recognises the role of the rural sector in the national economy and places a high priority on assisting it to improve its competitiveness and its ability to support adequate incomes for all those involved. Of course, this stands in stark contrast to members opposite who remain condemned for their non-interest in the rural sector, and they will remain condemned because of their failure continually to debate in this House the real issues facing Australia. Despite the constant challenge given by the Government for the Opposition to lay its policies on the table so that we can debate them, it refuses to do so. Day in and day out we listen to the Opposition economic spokesman-who appears to be the honourable member for Bennelong. We do not really hear much from the new shadow Treasurer, the honourable member for Kooyong (Mr Peacock), at all. Of course, we know that he is only a token shadow Treasurer and that in fact the honourable member for Bennelong is the real Opposition economic spokesman. We hear him carping daily but he refuses to debate the Government and he refuses to lay on the table the alternative policies of the Opposition with which it would direct this country if it were in government. The Opposition stands condemned perpetually for that. Mr IAN ROBINSON(Page)(8.46) —The Government has introduced this legislation as a consequence of its incredible decision to sell off part of the farm to try to reinstate financial order from the disaster that it has created since coming to office. The financial disaster has become so evident in the past week that there is no doubt that there is grave concern throughout this nation about the crisis which confronts us. It is coincidental that this legislation is before the House at this time and that in part it deals with the banking system of this country. Perhaps it is also coincidental that only in the past 24 hours the private sector has had to go to extraordinary lengths to save a particular bank from collapse. I put it to the House that the Government will need to quickly assume the responsibility of seeing to it that collapses of that kind cannot occur as they did in 1929-30 and shortly after. Steps were taken in that period of Australia's history to ensure that there was safety in the banking system. I am appalled to find that deregulation is removing that protection. I put it to the Government: Is it conscious of the history of the financial collapse of the 1930s, the result of which was positive action by my predecessor, the late Sir Earle Page, to introduce in this House the provision of statutory reserve deposits to ensure that collapses would not occur again as they did at that time? We have seen a weakening of that system, and I will apportion some of the blame to this side of the House as a consequence of deregulation of the financial system in this country. I think we have received a sound warning in the past few days and one that we had better heed quickly or we will see disaster of a kind that none of us could be forgiven for. I am concerned about the implications of this legislation, and after all it is really only a machinery measure now because of the Government's decision to sell the interest of the Commonwealth of Australia in the Primary Industry Bank of Australia (PIBA), which was established for a specific purpose. The Government picked the sale of this asset along with a number of others merely as a matter of convenience to meet a budgetary fad, which was to try to put to this Parliament and to the people of this country that it had balanced its Budget. Of course, we all know that that is fictitious. The honourable member for McEwen (Mr Cleeland) has challenged us tonight to say what we would do, but I point out that that has already been put forward by the Leader of the Opposition (Mr Howard), by the Leader of the National Party of Australia (Mr Sinclair) and by member after member on this side of the House-and that is simply that we would not countenance fiddling a Budget in the way that we saw the Budget of August 1987 fiddled. Mr Cleeland —You would sell Telecom. Mr IAN ROBINSON —The honourable member for McEwen accuses us of a suggestion on the part of some people that the Opposition would sell off some assets, but he should not accuse me because I am opposed to selling Telecom on the basis that the Government proposes to sell it, and that is merely to take the money, clean up on the sale and go on spending. That certainly would not be the policy of people on this side of the House. I return to the legislation that we are considering. I believe it is very unfortunate that people like the honourable member for McEwen can pretend that the activities of PIBA have now been fully taken up by the private banking sector-in other words, he used a specific quote and said that one of the purposes of the bank was to provide refinancing for the rural sector and that was now being taken up by the private banking sector. Of course, the honourable member knows that that is sheer rubbish because it is not being taken up in that way at all. The tragedy is that, under the mode of deregulation implemented by this Government and talked about by people on both sides of the House, the Government is simply ignoring the history of the financial needs of sectors of the vital productive community of this country-and primary producers certainly constitute one of those important elements. They need a special provision of finance and this measure in part removes that special provision. I think that is tragic. I have mentioned the risk of weakening the structure of statutory reserve deposit provisions. Of course, it was from statutory reserve deposits that we were able to make special allocation of funds for farm loans schemes even prior to the operation of PIBA. There has been a positive approach to the needs of the farming community. In the last five years, when there has been the most disastrous drought on record, the banking system has not met the needs as might have occurred under the system that operated in earlier years. I think that was a tragedy. Mr Peter Fisher —That is right. Mr IAN ROBINSON —The honourable member for Mallee has had bitter experience of this, as have other honourable members from areas that were so ravaged by the drought of the last few years. I have no doubt the honourable member for Wannon (Mr Hawker) has experienced this. He spoke about the need for recognition of the system that was begun by the previous Government of farmers having the benefit of income equalisation deposits. We cannot have one thing without the other. What is the use of suggesting that the private sector will handle all these needs when the truth is that it does not? I put that to the Government and its supporters who are always so keen to accommodate such propositions as the enormous expansion in this country in recent times of the credit union movement. It was given special privileges so that it might accommodate its supporters. Fair enough; I am not opposed to that. The credit union movement is an established means of finance and special assistance to an enormous number of people employed in industry throughout this country, public servants in particular. If it is good enough for that section of the community to get some specific benefit it is good enough for the primary industry sector to get benefits too. And here we are taking them away and saying, `Ah, deregulation. It is all right, the private banking sector will look after the needs'. The truth is that this means there will be no specific allocation of funds for specific loans for primary production. I wonder whether next we will lose the facility of the Commonwealth Development Bank. If we do, there will be a huge void not only for primary producers but for a vast body of people in the productive sector of this country. At present such people can go to the Commonwealth Development Bank. Earlier today we had a debate about the fishing industry and a Government member said that what fishermen want is a special means of finance: they ought to have their own bank. And here we are an hour and a half later with the Government putting through a measure to take away a specific and positive provision for a sector of the primary producers of this country. A Government member was advocating it; the Government is here taking it away. If that is not folly I do not know what is. So many needs are being overlooked. The Government is glossing over this. Government supporters find it convenient to talk about the benefits from the rural adjustment scheme, for example. If one is getting a benefit from the rural adjustment scheme it means that one is on one's way out, one is going out of the industry, one is finished. Yet the honourable member for McEwen talked about representing 4,000 farmers in this House. He gets up and extols the rural adjustment scheme as a means of finance. Good heavens, receiving funding under that scheme means that the farmer is on the dole, that he is being paid out. It certainly is not a means of finance for those farmers who want to be effective and productive. Yet he claims that his farmers are in good shape and they have no worries. There cannot be too many of them getting the benefit of the rural adjustment scheme. Probably they do not need it, but that is not to say they do not need the facility of other finance if they are to be effective producers, able to buy equipment, update their property and to be actively cost-effective and produce profitably and to contribute to our exports. Exports from Australia are our only means of saving us from financial disaster in the period immediately ahead. The Government knows it; the Treasurer (Mr Keating) knows it; and the Government's advisers know it. But unfortunately the policies of the Australian Labor Party-- Mr Brumby —What are your policies? Mr IAN ROBINSON —I made that very clear earlier. The honourable member must be a little deaf or disinclined to hear what our policies are. Specifically, they certainly are not to put up a fake Budget and then to sell off assets to try to balance the books. That is what the measure before the House is proposing, as I said a little earlier. I come back to the importance of specific finance provisions through the banking system, as PIBA was, for the needs of the rural sector of this country. Let us take one area that has been totally neglected-finance for young people to be able to go on the land. There is no adequate provision for that whatsoever. When people are getting on in years and find it difficult to carry on their property they would like their family to take over-for example, a son who has probably been trained, has the capacity, the know-how, the skill, but he needs finance to do it. PIBA was a possible source of finance. There would no doubt be cases to be found on the books of PIBA where a refinance loan had enabled something of that sort to be done. Are we to see the end of it under this new sell-off-the Western Australian bank of something or other has a 17 per cent shareholding? Goodness knows what the policy direction from the Government of Western Australia will be on the continuation of this financial institution, but you can bet your life that it will not be a national outlook; you can bet your life it will be some one-sided proposition that will ignore the real needs and aspirations of those who saw PIBA introduced and put on the statute book. Tonight I lament the fact that we are seeing it lost to the benefit of this nation. It is a tragedy and unfortunately there will have to be many more tragedies before we relearn the lesson of the 1930s and the need for special finance. My recollection goes back a number of years to my family and the family farm. In 1929 the bank account for that farm happened to be with the State Savings Bank of New South Wales. The doors were closed. There was no more credit. There was no value in what was deposited in the account. The bank was shut down and there was no statutory reserve deposit to carry that bank forward. My parents were lucky enough to hang on to the farm; it was a fairly non-productive farm but at least it was their home. At least it was somewhere that they could cling to until things very slowly recovered. It took about 10 years. During that time-and I still have the records to prove it-there were no private enterprise banks that were prepared to finance that farm-for very simple and understandable reasons. It was not profitable. The advice would have been, `Oh, sell it. Walk off. Forget it'. My parents did not. They stuck with it and I still own it and I am proud of that fact. But I would not own it today if it had not been for finance that came through a banking system largely introduced by my predecessor, Sir Earle Page, to make it possible for farmers to have low interest loans, to have benefits specifically to cope with a difficult period, to cope with floods and droughts and many other things. Here we are tonight removing these measures. Unfortunately, lessons are learned, then come the good times. Those lessons, and the experience from difficult days, are too easily forgotten. We are seeing this today in stark reality, with this nation facing a financial crisis, with a number of other nations facing a financial crisis and with the world going headlong into a financial crisis. This might not have been happening if we had kept our heads during the boom period and maintained a degree of regulation in the banking and monetary system so that things could not go quite as far as they have. There is a lot of talk about paper money. It is said that all that will be lost if there is a crash is paper money. What utter humbug! What will be lost is the assets of the productive companies and enterprises of this and other nations. Once they are lost, they take a lot of getting back. It is only through productivity and the selling of commodities that we will reproduce the wealth. The reason is that we have gone too far, that we have accepted the belief that we can shuffle paper money around and still survive without having an adequate counterbalance. Such a counterbalance in the banking system, introduced after 1929-30, was the insistence on adequate statutory reserve deposits so that no bank could face the circumstance that it did not have, well and truly identified, the assets, the hard cash in reserve, to balance what it was lending and what it was committing itself to-to ensure that things did not go wrong. Mr Cleeland —Except for PIBA. Mr IAN ROBINSON —The honourable member should not say that. I just hope that we have not gone too far in the last three or four years. I just hope that what we have been hearing about over the weekend will not be repeated too many times or in too many places. I am sad to find tonight that we are losing from the statute book a piece of legislation that provided the basis for specific lending-a safe basis, with no risk as far as collateral was concerned on either side, on the part of the borrower or the lender. If anything is out of kilter on either side-the borrower or the lender-everyone is in trouble. That is the lesson. I hope that those who have said today that we on this side of the House do not have a policy will think hard and long about what they are doing and what their objective is for the immediate future. What we are debating tonight is a fringe matter, but there is something in it that we must recognise. We must not just cast it aside as the easy way to take because the Government decided to cash in on 17 1/2 per cent of the ownership of the Primary Industry Bank of Australia. Mr BRUMBY(Bendigo)(9.04) —I shall during my contribution tonight answer some of the claims that have been made by the Opposition speakers in this debate, particularly the honourable member for Page (Mr Ian Robinson), who preceded me. Let me correct a few of the misapprehensions which have been generated during this debate. The honourable member for Page and Opposition speakers in general have spoken of the merits, it seems, of regulation and of the dangers of deregulation. As I look around the House tonight I see particularly the newly elected honourable member for Wentworth (Dr Hewson). I wonder whether he shares the attitudes of other Opposition speakers in this debate about the relative merits of regulation and deregulation. I wonder also what sorts of views the Leader of the Liberal Party of Australia, the honourable member for Bennelong (Mr Howard), who is not in the House tonight, might express about the merits of regulation and deregulation. Most of today's newspapers, ranging from the Australian Financial Review to the Melbourne Age and the Sydney Morning Herald, on the front page or the third page, have run fairly lengthy articles about a biography recently released by Dr Ayres entitled Malcolm Fraser, a political biography. In it Dr Ayres strongly criticises the Treasurer in the Fraser Government, the now Leader of the Opposition (Mr Howard), for his regulatory policies. The Australian Financial Review, in its article headed `Biography stirs unresolved rivalries', reports Dr Ayres as having said in his book: Any notion that John Howard attempted to force the pace of change against Cabinet obstruction is a total misrepresentation of the truth. That was in reference to progress, pace of change, in deregulation. The Melbourne Age states: Dr Ayres gives a range of examples where he says Mr Fraser was the driving force towards deregulation. He also accuses Mr Howard of delaying over the terms of reference for the Campbell inquiry into the Australian financial market, and of generally being weak and ineffective in promoting policy for deregulation. The Leader of the Opposition in the Press today has strenuously denied the claims made in Dr Ayres's book. The Leader of the Opposition is saying today that in fact he is the great deregulator, he was the great deregulator and he will always be the great deregulator-and how dare this man, Dr Ayres, say that he was not? I put it to the House that, if the Leader of the Opposition is correct and he truly is the great deregulator that he believes and claims himself to be, his views are at odds with those of most of the Opposition speakers who have spoken in this debate tonight. A number of odd claims have been made in this debate tonight. The honourable member for Page held up the Primary Industry Bank of Australia (PIBA) as the great save-all for farmers around Australia, wherever they lived and whatever they produced. He saw it as a tragedy that we had sold a 12 1/2 per cent share in this bank. It is not as if we sold a 60 per cent share, an 80 per cent share or every share that the Commonwealth and the States owned in the Primary Industry Bank of Australia: the Commonwealth share of 12 1/2 per cent was realised in June. The honourable member for Page said that was a catastrophe, a tragedy, for the rural sector. The 1987 annual report of the Primary Industry Bank says on page 2: The Bank's net profit for the year under review, after provision of tax amounting to $3.9 million, was $4.25 million. The honourable member for Charlton (Mr Robert Brown) will be interested in this: This represents an increase of some 22.5 per cent over the preceding financial year. That is not bad. This is the Primary Industry Bank of Australia, the bank that the Opposition is holding up as the great saviour for farmers around Australia, the bank that is providing cheap loans to help out farmers in a crisis. It made a 22 1/2 per cent increase in profit from one year to the other. It is either an extraordinarily efficient bank or it is doing pretty well out of selling loans to farmers. I suspect that it is doing pretty well out of selling loans to farmers. When this Government came to office after the highly regulated years of the Fraser-Howard Government, we had a banking system which was an oligopoly, which was highly protected, which had among the world's banking systems perhaps the largest gaps or margins between money borrowed and money lent and which was more profitable than any comparable banking system in the Western world. This Government took steps to open up that banking system to more competition. We did that because we wanted to give Australian consumers, Australian business people and Australian farmers a more efficient financial system that would be able to provide loans at the least possible cost. That has been the objective of deregulation. I can assure honourable members that it is not a philosophical or ideological bent that this Government has; it is in the interests of improving efficiency that, where necessary, we are prepared to take the hard decisions and break down some of the regulatory barriers. In the case of the Primary Industry Bank of Australia, we realised our 12 1/2 per cent share. We sold it to the Rural and Industries Bank of Western Australia for $2 1/2m. There are a number of conditions under which we sold it. If honourable members opposite bothered to read those conditions they would see that the interests of people in the primary sector, by and large, have been looked after. They include the conditions that the bank be maintained as a separate and ongoing entity, that the bank continue to provide a refinance facility to the rural sector, that 50 per cent of total Primary Industry Bank of Australia loans be directed towards borrowers in the rural sector, that the bank continue to offer-this is important-bill finance at relatively low interest rates and, finally, that two directors to serve on the PIBA board be appointed in consultation with the Commonwealth to represent rural interests. One can hardly say that we have just realised our obligation to this bank, that we have washed our hands of it and have let the Rural Bank, the Primary Industry Bank and all the farmers around Australia sink into the quagmire. Quite the contrary; we have done the right thing by the banking sector in total. In a deregulated financial environment it is no longer appropriate that we hold a 12 1/2 per cent share in the Primary Industry Bank, so we have realised that share and we have built protections into it to safeguard the interests of the rural sector. I come to a few other points that were made by Opposition speakers. The honourable member for Page attempted to argue-National Party of Australia speakers have put this many times to the House-that the only real wealth produced in Australia and around the world came out of the ground, that unless we get back to producing more wealth, as he put it, which is stuff that you dig out of the ground, the world will go down the drain. Mr Robert Brown —They are the old mercantilists. Mr BRUMBY —The honourable member for Charlton, who is a prominent, noted academic and economist, says that they are the old mercantilists. We gave that theory away 150 years ago because we did not think that it worked or was appropriate. All wealth does not come from what we dig up out of the ground. I will give an example. Members of the Opposition might do well to read this week's Time magazine, which I read on an Australian Airlines flight to Canberra, about the resurgence of profitability in the primary sector. The article referred particularly to the wool industry. It referred to what we are doing and the record prices which we are receiving for fine wool. The article made the point that research and development has paid off in that industry. It is a fine example to other industries around Australia, because the wool industry has always made enormous investments in research and development. There is now a wool boom which is qualitatively and quantitatively different from previous wool booms because world stockpiles of wool are at an all time low. Yet the price we are getting for wool is excellent. The article mentioned one of Australia's best fine wool merino studs. It is a stud that produces 16 micron wool and under. As the honourable member for Charlton would know, that is extremely fine wool. The wool is so good that it received the world record price last year of $280 a kilogram. Can honourable members believe that a merino sheep which has been on the high plains in a blue cloth all year and is shorn expertly fetches a price of $280 a kilo? That sheep probably produces five kilos of wool. So one sheep produces over $1,000 worth of wool. That sounds like an enormous return on investment. It is a very good return on investment, but the point of the article and the point I am about to make is that the President of the National Farmers Federation, Mr Ian McLachlan, said that, while that is a great return to get off the sheep's back, so to speak, for every $280 we get for a kilo of wool we sell it to an Italian suitmaker who adds a value not just of another $280 but 10 times the raw value of the fleece. So we come to the question of where wealth is created. It is true that some wealth is created on the sheep's back-$280 worth of wealth-but $2,800 is created by the Italian suitmaker who weaves that cloth, adds value to it and puts it in a high quality suit that is sold among the best clothing retailers in the world. The production of wealth is not just a question of growing a product on a sheep's back; the production of wealth is adding value. I see that the Minister for Trade Negotiations (Mr Duffy) is in the House tonight. He has just returned from another of his trips overseas during which he has put the interests of Australian and indeed world producers in terms of a fairer world trade system. The Minister is wearing an Australian pure wool suit. I do not know where the suit was made. Whether it was made overseas or in Australia-I am sure that it was made in Australia-the point remains that the wool that went into it probably represents about 10 per cent of the total retail value of that suit. If his suit is worth $400, the wool is worth $40 at most and the rest is value added. In terms of the crisis which is occurring in world trading markets, from Australia's point of view it is a crisis which has been brought about, in part, because for many years under the policies of the Opposition parties we put too many of our production eggs in one basket. That is not to demean in any way the enormous importance of our primary industries and commodities to Australia. Our primary industries alone account for nearly 40 per cent of our total exports. In terms of the concept of creating wealth and adding value, it is the newly industrialised countries around the world-some of the Pacific rim countries; Korea and so on-which in the last two decades have been adding value to manufactured products, which have been the fastest growing areas of world trade. Poor old Australia! Until this Government came to office in 1983 and floated the dollar, deregulated the financial markets and put in place assistance and incentives for secondary industry, we in Australia did nothing about it. We now see that the strategy introduced by this Government is starting to pay results. As the Minister for Trade Negotiations would know, in the last 12 months in Australia we have seen a 50 per cent increase in the value of certain types of manufactured exports from Australia. Admittedly, that is of a low base, but it is a very substantial improvement. We are adding value. I would challenge the honourable member for Page and any other of his National Party colleagues to debate in this House with me and to challenge the assumption that those exports of valued added manufactures is not generating wealth for Australia. Of course they are generating wealth for Australia. In exactly the same way as gold mining, wheat production and wool production add wealth for Australia so too does adding value to those products, other manufactures and high technology goods create wealth for Australia. Mr McVeigh —Of course it does. Mr BRUMBY —The honourable member is at variance with his colleague the honourable member for Page, who only 20 minutes ago berated honourable members by saying that the only real wealth was something that grew out of the ground. That is nonsense. I have totally destroyed his simplistic argument. It is total nonsense. Mr McVeigh —I think you are misrepresenting him. Mr BRUMBY —No, I am not misrepresenting him at all. The Hansard will show that I am not. I have never misrepresented anyone in this place. Mr McGauran —Except the people you are supposed to represent. You are misrepresenting them constantly. Mr BRUMBY —The honourable member has a reputation in this place for using bullying tactics. He is a bully. He will make a speech in this place-- Mr DEPUTY SPEAKER(Mr Millar) —Order! The honourable member will ignore the interjections and address the Chair. Honourable members on my left will restrain themselves. The honourable member for Gippsland is losing control of himself. I call the honourable member for Bendigo. Mr BRUMBY —The honourable member is under enormous pressure at the moment. What is his Bankcard worth now? He is under enormous financial pressure. Mr DEPUTY SPEAKER —Order! The honourable member for Bendigo will resume his seat. I remind the honourable member that he is subject to an exhortation from the Chair to address the Chair. Honourable members on my left, strangely enough, seem inclined to disregard the authority of the Chair. I remind them of their responsibilities in that direction. Mr BRUMBY —Thank you for your ruling, Mr Deputy Speaker. Mr McGauran —Lay off the personal abuse. Mr DEPUTY SPEAKER —Order! I warn the honourable member for Gippsland. Mr BRUMBY —Thank you for your protection, Mr Deputy Speaker. One of the other matters which Opposition speakers have raised in this debate is the question of policies for the primary sector and for the economy as a whole. During the contributions by Opposition members earlier in the debate, I challenged the honourable member for Page and others to say what were the Opposition's policies for dealing with the present economic crisis and the present situation in some of our rural industries. Despite a lot of rhetoric and hot air, they did not really announce any of their policies. I have been a member of this place for 4 1/2 years, since 1983, Mr Deputy Speaker, as you would know. I managed, like most provincial members on this side of the House, to increase my vote significantly in the last election, and I intend to be here a lot longer. But I am not prepared to wait indefinitely to hear the policies of the Opposition parties. We did not hear policies before the last election. What we heard from the Opposition was what I call the `bottomless pit of money' theory-that is, one drives around Australia and promises enough people enough money. I notice that the honourable member for Wentworth has a wry grin on his face. He knows that the Opposition's policies are a sure way of driving Australia into bankruptcy. I look forward to hearing his contribution to this debate. One cannot, in the current economic environment, promise the world to everyone. If people could pinpoint or highlight a problem with the world economy at the moment, it is perhaps that too many people have tried to please too many of their friends by lending too much money. One cannot keep making promises. One cannot dramatically cut taxes in Australia, for instance, and give people of lot more disposable income when one is running a current account deficit of $12 billion. One cannot give people a lot of extra money to spend on cars, videos and imported clothes. That is madness. In America at the moment President Reagan, after years of saying that lower taxes were the answer, the panacea, to everything, is now conceding that in the current economic environment in the United States the Administration must perhaps look at increasing taxes and savagely reducing spending. It must do that because it cannot afford to have people with pockets full of money sucking in imports, generating an $80 billion and $100 billion trade deficit. That is the position in America. Economists and leaders around the world are recognising that if one is running big current account deficits, one cannot give people more money to buy more imports. That is the reality. Everyone likes lower taxes. No one likes to pay taxes; no one likes to increase taxes. No one likes to cut spending in the way in which this Government has had to do. Mr Ian Robinson —Ha, ha! Mr BRUMBY —The honourable member for Page laughs. I say to the honourable member that he had his chances. He will not have any more chances in government because he is coming to the end of his term in this Parliament. He will be put out to retirement, to pasture. He had his chance prior to 1983. This Government has brought in a Budget this year which cuts spending in real terms by 2 per cent. It might be arguable that one could cut more, but it is not a bad effort. it is the biggest cut in 35 years, and it follows a year of zero real growth. I see that the Leader of the Opposition is present. I would like to answer the claims I made earlier about whether he represents a party which is a regulatory party, which he strenuously denies from his own point of view-- Mr McVeigh —We are not novices. Mr DEPUTY SPEAKER —Order! I warn the honourable member for Groom. Mr BRUMBY —Or whether the Opposition parties will adopt a somewhat deregulatory approach to financial markets, the floating of the dollar and wages policy. He often says that his Party will do that, but in this case, as in so many others, his backbenchers fail to support him. Mr ANDREW(Wakefield)(9.24) —I welcome the opportunity to participate in this debate on the Primary Industry Bank Repeal Bill 1987. Before I refer directly to the Bill, I pick up some of the nonsense that has been espoused by the honourable member for Bendigo (Mr Brumby). I have one thing in common with the honourable member-that is, I entered this House on the same day as he did. Ever since I entered this House 4 1/2 years ago, I have listened to honourable members opposite peddle deceptive statements about where the Opposition stands. They have peddled them so often that they believe them and hope that the rest of Australia will believe them. It started with a deceptive statement about the so-called deficit. Honourable members opposite peddled a $9.6 billion figure so often that, quite frankly, it began to be believed not only by them but by the nation. Tonight the honourable member for Bendigo again peddled the nonsense that the Opposition has no policies. We went to the last election with policies, but the honourable member still continues to peddle this deceptive line, hoping that eventually the whole of Australia will believe it. You know, Mr Deputy Speaker-every member on this side knows-that we had policies, but that the real issue is that we are the Opposition and the obligation from a policy point of view rests squarely with the Government. Furthermore, the honourable member for Bendigo had the absolute gall to talk to us about deregulation. He had the absolute gall to peddle some sort of economic nonsense by telling us that wool on the sheep's back is worth so much money, and it is worth 10 times as much when it is on a person's back. I happen to know that the whole objective of what we in the Opposition are about from the point of view of deregulation is ensuring that the suit that he referred to as being worn by the Minister for Trade Negotiations (Mr Duffy) is made not in Italy but in Australia. Why is it not made in Australia? It is because the deregulation that we would fervently pursue would move into a deregulation of the wages area. It is the regulation of our wages market that has ensured that that wool is not converted into a suit in Australia. Let the honourable member for Bendigo run sincerely down the deregulation path. Let him grasp the nettle of the deregulation of our wages market, and then let us see how sincere the remarks he has aired in the House this evening are. We all know that there is nothing more important to Australia's future than the cultivation of high technology industries. We all know what value added manufacturing is all about. We will support the Government in the efforts that it makes to attract manufacturing industry to Australia. Quite frankly, I have stood in this House on a number of occasions, as I do tonight, to welcome the legislation that is being debated, but very rarely have I heard the same sort of charitable instinct espoused by the honourable member for Bendigo. Very rarely has the same sort of embrace of the responsible stand taken by the Opposition been made by the honourable member. I have just about had enough of being misrepresented conveniently by the honourable member for Bendigo and his ilk. On 30 June this year that portion of the Primary Industry Bank of Australia (PIBA) that the Commonwealth held was sold to the Rural and Industries Bank of Western Australia. As a result of that action, $2.5m was generated and poured into the public coffers. As I have said to you, Mr Deputy Speaker, the Opposition does not oppose this legislation or this action. In fact, there has been very little reaction across Australia to this sale because the Primary Industry Bank of Australia had largely begun to fulfil a role that was already being occupied by the other banks. The honourable member for Bendigo has made the point that the existence of PIBA meant that the other banks were forced to become marginally more competitive and that deregulation of the banking industry brought a measure of new life into the banking industry in Australia. We on this side of the House have welcomed that deregulation. Prior to the acquisition of PIBA by the Commonwealth, four major trading banks and one consortium of four State banks each held a 17 1/2 per cent share in PIBA and the Commonwealth held a 12 1/2 per cent share. That 12 1/2 per cent share, as I said earlier, has now been sold to the Rural and Industries Bank of Western Australia. This new concept of PIBA was granted a banking authority on 30 June 1987 and the former PIBA Act of 1977 has been made redundant. The legislation we are debating tonight repeals and makes consequential amendments to the Primary Industry Bank Act to allow those events that took place on 30 June to be legalised. I want to refer to the importance of agriculture in Australia and to the importance of the Primary Industry Bank in the agricultural setup. I quote from a speech made by Dr Andy Stoeckel, who was once known as the chief economist of the Bureau of Agricultural Economics and is now a director with the Centre for International Economics. At the United Farmers and Stockowners Conference in South Australia on Tuesday, 28 July this year Dr Stoeckel said: Australia's net external debt position is already high-it is expected to be around $90 billion or some 36 per cent of GDP by mid June 1987. In the debate on the matter of public importance today the Leader of the Opposition (Mr Howard) said that our external debts had risen above that 36 per cent to almost 40 per cent. Dr Stoeckel went on to say: Australia is now one of the highest debtor nations in the world. It ranks amongst many of the Third World economies. Moreover, the position is deteriorating. An enormous trade turn-around is required just to stop the debt burden growing and to stabilise the already high net debt position by 1990. A stabilised external debt position relative to GDP is a minimum requirement for balanced growth. This point was taken up earlier in the debate by the honourable member for Wannon (Mr Hawker) who pointed out that we have some cause for concern about where our total financial system, including the Rural Industries Bank of Western Australia, is heading when we look at the sort of debt we are endeavouring to service as a nation and when we look at our September balance of payments deficit of a record September figure of $1.35 billion. Dr Stoeckel went on to say: The dimension of the problem is illustrated by the fact that to prevent Australia's net external debt position from deteriorating further-- deteriorating, mark you- Our trade balance would need to improve by up to $15 billion. To put this in perspective, exports of rural origin, which account for 36 per cent of Australian merchandise exports were $11.6 billion in 1985-86. Thus to achieve a trade turn-around of $15 billion would be a major task. It would require us to improve the world trading system, to restructure the Australian economy and to remove anti-trade policies. Right away, one point should be stressed. Artificially encouraging particular export sectors, such as manufacturing exports is not the solution. Australian industry policy should be one of a `level playing field' where private incentives and neutral policies determine the composition of Australian industry. The legislation before the House is a step towards having a level playing field. Dr Stoeckel also went on to say: . . . to prevent Australia's net external debt position from deteriorating further- not to improve the position- our trade balance would need to improve by up to $15 billion. To put this in perspective, this would mean that policies would have to change to allow us to improve the performance of our rural exports. Dr Stoeckel suggested a few points. He said that to improve our balance of trade by $1 billion would require a 9 per cent increase in world agricultural prices, or an 80 per cent cut in tariffs, or a one per cent cut in the cost of wages, or a one per cent cut in real government spending, or alternatively, a restructuring of some of our taxes. Much of what we need as a nation depends on our capacity in the rural sector to perform and on the capacity of the rural sector to have available to it the money it needs to borrow in a flexible context. There would not be anyone with an agricultural background on this side of the House who has not had need of, if not access to, the sorts of facilities that PIBA once offered and that we on this side of the House would hope the Rural and Industries Bank of Western Australia will continue to offer. I have in property restructuring, as I know you have, Mr Deputy Speaker, had need of some form of flexible loan. There would not be a property developer in the rural sense, in the agricultural sense, on this side of the House who had not at some time been embarrassed by the demand he had for borrowings in order to produce a more efficient property. You know, Mr Deputy Speaker, as I do, that whether one chooses to clear a property, whether one chooses to improve one's irrigation techniques, whether one chooses to improve one's cropping techniques, whether one chooses to step into the all important area of water storage, whether one is forced to retain some of one's progeny in order to have herd and flock buildup in the interests of increasing stock numbers, whether one is in horticultural industries and part of a property rebuild that involves long lead times before that property is in production, whether one is obliged to hang on to livestock beyond the point at which the bank forces one to sell it in order to get a better price, it is very important to have flexibility in rural marketing. It is this flexibility that the Primary Industry Bank of Australia offered. It is this flexibility that the Commonwealth Development Bank, through its rural sector, has offered in the past, and it is this flexibility that tonight we in the Opposition would say we seek to ensure is still offered by the Rural and Industries Bank of Western Australia as it takes over the role of the old PIBA. Contrary to the remarks made by the honourable member for Bendigo (Mr Brumby)-- Mr Robert Brown —You are all closet socialists. Mr ANDREW —And contrary to the interjection that just occurred, this side of the House is not opposing this legislation but is saying that PIBA has played an important role and one that we hope the banking sector will continue to make available. In preparation for this debate I spoke to the National Farmers Federation (NFF) and I discovered that far from its being pleased about this legislation, as was implied by an honourable member opposite a little earlier, it does have some concerns. Its concern is not with the sale of the bank, it is not with the principle that on this side of the House we have largely been prepared to embrace; its concern is that it notes that loans that were once available to primary producers are now to be available to the rural sector. The NFF said to me, `If you are standing in this debate make the point that we would like to ensure that the allocation of funds that was once available to primary producers ought to continue to be available to primary producers'. They said that if that allocation is made merely to the rural sector it will be possible to find those funds soaked up in one or two major projects such as, as honourable members could imagine, new bulk handling facilities, new grain loading terminals at a port, a new abattoir or- Mr Rocher —Or another Ord River. Mr ANDREW —Or, as the honourable member for Curtin, in his knowledgeable way points out, heaven forbid, another Ord River scheme. The NFF had one other area of concern. Its first concern was that there ought not to be a focus on the rural sector in place of the primary producer. Its second concern was that the tenders that were out for the sale of the Primary Industry Bank of Australia were out for such a short time and there was so little publicity surrounding it. They simply seek an assurance that other interested parties who might have sought to tender for the work formerly done by the Primary Industry Bank of Australia were not locked out of the tendering process. I seek the Minister's comment on that. For example, the NFF asked: `Were groups such as Elders, Dalgetys, or the Wheat Board given a similar chance to competitively bid for the work of PIBA along with the Rural and Industries Bank of Western Australia?'. We can be sure that particular groups such as Dalgetys, Elders and, I guess it would be fair to say, the Wheat Board, have across Australia a network that would facilitate banking that would rival anything that the Rural and Industries Bank of Western Australia could offer. The honourable member for Bendigo, in his criticism of the Opposition, accused the honourable member for Page (Mr Ian Robinson) of suggesting that prosperity only resulted from digging holes in the ground. The gall of the man! We represent primary producers. Primary producers do not represent holes in the ground but Australia's finest renewable resource. We want to ensure that the flexible banking facilities that farmers and primary producers need in order to maintain their role in producing export income out of Australia's finest renewable resource is not, in any way, disadvantaged by the sale of PIBA to the Rural and Industries Bank of Western Australia. It is no news to this House that primary producers have lived through difficult times during the life of this Government, which is not entirely the fault of this Government. It is a sobering factor to realise that many of these difficult times have not been climatically generated for we have not had the nationwide drought that the Fraser Administration had to contend with. But in spite of good seasons we have primary producers who, until eight months ago, were right down on their luck. It has been easy for members opposite to say-we have heard it in this debate tonight-that the circle has gone right around and all is well for primary industry, that wool is booming and grain industries are looking brighter. I am sorry, but that is arrant nonsense. In the Adelaide Advertiser, the South Australian newspaper, of last week, the United Farmers and Stock- owners of South Australia Inc. was bemoaning the tragedy facing South Australian producers as a result of drought, hail and frost. It is simply not good enough to presume that Australia's rural industry has gone full circle and all is well. The nationwide drought that so plagued the Fraser Administration has not recurred and, on the law of averages, is just around the corner. The honourable member for Wannon has made a very eloquent call for the reintroduction of income equalisation deposits which would allow farmers to be more prudent in their preparation and to be independent of government in the face of drought. This Government has done nothing about making that sort of facility available. What we are debating tonight is the change of the Primary Industry Bank of Australia from its independent identity to a group encompassed in the Rural and Industries Bank of Western Australia. We do not oppose that, but we do seek to get some assurance that what the Government is doing as a result of selling its share in the Primary Industry Bank of Australia will not disadvantage primary producers. I note that the Government sought to ensure that two of the directors of the Rural and Industries Bank of Western Australia and its new PIBA arm would have a rural background and I note, as I run my eye through the incoming bank board that two men, namely, Mr Davidson and Mr Smart, have been appointed to these positions to represent Australia's rural interests. I wish them well, for Australia's rural community cannot afford to be ignored by any one of the banking interests in this nation and the flexibility in banking that is so essential to rural prosperity must be maintained. Mr McVEIGH(Groom)(9.44) —I am delighted that in the chamber tonight are two people who were instrumental in the setting up of the original Primary Industry Bank of Australia (PIBA). I refer firstly to the honourable member for Page (Mr Ian Robinson). I recall when I first came here that at one of my first Party meetings he, with great fervour, advocated the setting up of a bank for primary producers. I think it is fitting tonight that he was able to give sound, constructive suggestions. Additionally, I recall going to the Huon Valley in Tasmania in about 1976 when the honourable member for Franklin (Mr Goodluck), in his usual inimitable fashion, was indicating that the apple growers of that part of Tasmania were in a particularly difficult position. He invited us down there and he repeated the aspirations of the honourable member for Page at a big meeting. I think it is fitting that the honourable member for Page participated in this debate and that the honourable member for Franklin is taking a keen, intelligent interest in the debate. He has been here for almost the total debate. Following that era the then Minister for Primary Industry, the Rt Hon. Ian Sinclair, appointed a sub-committee consisting of Senator Jim Short and Mr Geoff Giles who, at one time, was the honourable member for Angas and at another time the honourable member for Wakefield. It is fitting and proper too that the present honourable member for Wakefield, who followed him, participated in that debate. I was also a member of the sub-committee set up to talk with farmers and industry generally. It would be fair to say that the history books will record that our initial ideas were taken up by the Cabinet and reflected in the legislation. I want to take a few minutes to pay tribute to PIBA for what it has achieved. We must, at all times, be aware of the effect that the repealing of this 1977 Bill will have on the farming communities. I think it is fit and proper in a debate which is closing a chapter to recall with pride some of the many splendid achievements of PIBA and its contribution to Australia's important agricultural sector. It had a great reputation. It was able to attract deposits from investors both within Australia and overseas. I recall talking to Mr John Frearson. He indicated to me that the ordinary housewives in places such as Holland and Belgium were going into the post offices and taking up the offer of deposits in PIBA. That just indicates the fact that it was well known in Australia and it was also well known overseas. It is pleasing to note that the funds that they were able to generate were subsequently distributed, as the honourable member for Page said, in the form of loans across a wide geographic spread through the branch networks of its shareholder banks and, of course, the major pastoral houses. The idea of establishing a national rural lending institution evolved as an extension of the belief that the agricultural sector would be better served by a bank which could ensure continuity of supply in conditions which were economically suited to the capital intensive nature of agriculture. There was a recognised need for a lending institution which was able to cater to the needs of the relatively small size of most farm businesses which were experiencing difficulties in securing equity finance for expansion and development. I would like to take this opportunity of applauding the Fraser Government on opening its eyes to the needs of the agricultural community in the late 1970s and, most importantly, for acting on those needs with the provisions of PIBA. The Fraser Government showed courage in effectively recognising, what is now a universally accepted fact; that is, an efficient system of rural credit is an essential part of the machinery required for the economic development of agricultural resources and the promotion of efficiency in production. PIBA is, above all, Australian in theme and substance, based on the philosophy which usefully intermingles the celebration of free enterprise with the spirit of the Aussie battler. Robert Perrier, Australian dramatist, restated this ethos in respect of the theatre when he said: If theatre is to contribute in a meaningful way to our culture, it has to connect to the unique style and spirit of Australia and with the felt life of its people. Mr Deputy Speaker, I suggest to you that within this sphere of primary industry, PIBA also adopted this philosophy which it has kept at the heart of its operations during the past 10 years. From PIBA's incorporation on 21 July 1978, it recognised that the agricultural sector was, indeed, the most important single source of export earnings and therefore set as its broad national objective an assurance that long term credit would be available to agriculture on terms broadly comparable with those on which it is available to other major industries. This philosophy emanated from the bank's desire to dedicate itself to rescuing the agricultural sector from a certain demise by restructuring the banking policies held by other lending institutions at that time. It is interesting to note that in the first two weeks of lending, the bank's approvals amounted to about $10m. Although for some time there had been demands from primary producers for greater access to long term funds and for concessional interest rates, those demands became more claimant during the rural depression of 1969 to 1972. Indeed, Hansard seems to point to the view that, had not the McMahon Government been defeated in the Federal election in December 1972, primary producer pressure might possibly have led to the establishment of some kind of national rural bank earlier than 1978. Newcomers to this Parliament from the present Government party try to indicate that they are concerned about primary industries, but I do not want to debate that issue because it is not necessary to recall, even to their biased minds, that from 1972 to 1975, Australian primary industry had to deal with sledgehammer blows like `You've never had it so good' from Ministers when all the farmers were doing was rapidly going broke. The initial years of rural depression sparked the move of both life assurance companies and pastoral finance companies to reduce their rural lending. Thus, rural producers were confronted with simultaneous limitations to two of their important traditional sources of credit. Notwithstanding the steadily growing activities of lending institutions such as the Commonwealth Development Bank and schemes such as the rural adjustment scheme, pressure on the Commonwealth Government for still further access to long term funds became heavy. During this poor rural economic period, however, the bulk of rural lending by the trading banks was directed primarily to the provision of seasonal finance. There was not finance available on a long term planning basis. This restriction was further frustrated by the banks' imposition of restraints on the total volume of their lending. Faced with their overriding responsibility to maintain sufficient liquidity to cope with a wide range of possible community demands, banks were forced to make the move into longer term lending, albeit gradually. This was a matter of sheer necessity when producers found themselves in financial difficulties. In many cases, if they sold up, the banks would not have got enough money to pay off the mortgage. Obviously, it was good business to keep the farmers in a producing situation, for history records that many farmers were able to trade out of their difficulties and become viable propositions once again. I was interested in the remarks of the honourable member for Wakefield (Mr Andrew). I would just like him to know that Australia is a pretty big place and does not begin and end in South Australia. In that beautiful bit of heaven that fell from out of the sky, the Darling Downs, we have had a drought for two years. It is the first drought in 200 years. When widespread drought or lengthy periods of low prices came about, banks and financial institutions were often confronted with a hard choice between demanding that the property be sold at a sacrificial price or carrying the producer until seasons and prices improved. It could be very difficult to judge whether it was prudent to encourage producers who were in financial difficulties to remain on their properties until conditions became more favourable. These hardships suffered by farming producers, coupled with insufficient means of acquiring funds to cope with these difficulties, invoked a do or die situation. Unless finance was to be made available to primary producers, the industry was doomed to collapse and so the PIBA was set to play a crucial and pivotal role in rectifying the situation. Initially, the bank's approvals in the first two weeks amounted to $10m. I believe that it is appropriate, when we see the changing format of the Primary Industry Bank, to pay tribute to people like Walter Ives who was Chairman from 1978 to 1987. He was a distinguished Australian and a world authority, highly regarded as an administrator and a practical person. Above all, Walter Ives was a truly courteous gentleman, ever ready and willing to help members of parliament, both in his senior position in the Public Service and, quite obviously, in his challenging position as first Chairman of the PIBA. John Frearson is a household name in Australian agriculture and one of the few people to have become a legend in his lifetime. He has been not only general manager, director, managing director and now deputy chairman, but also plays an integral part in bringing in financial expertise to such huge operations as the Australian Wheat Board. We salute those two people and others who have laboured in the Primary Industry Bank. I know that, while they look forward to the challenges of the future, they will be wiping a furtive tear from their eye when they note that this legislation dismantling PIBA finally gets through Parliament. Like the member for Page, I express the hope that, 10 years hence, primary producers will be getting the same sort of service from the Rural and Industries Bank of Western Australia that was given by those in PIBA. I understand, although I am not from Western Australia, that the R and I Bank has a proven track record in that State with in excess of 100 branches, including sub-branches. However, there is only a single branch in Sydney and sub-branches in Brisbane and Melbourne to cater for all the eastern States. Now the banks and pastoral houses share will no longer be present, and one wonders whether Western Australia, with a huge branch network, will have a better service than the farmers in the eastern States. I hope that the eastern Australian farmers will not be disadvantaged because of the huge branch structure in Western Australia. Surely, the primary producers in eastern States have the right to expect the same service that their Western Australian colleagues are enjoying. It is imperative that the R and I Bank upholds this challenge, particularly in the light of the fact that the agricultural sector is once again in a state of rapid decline. This has been stimulated by chronic drought conditions in certain areas, about which I have spoken, which have forced many farmers into the groping talons of bankruptcy. Across the board, on a national scale, the economic trend has been gravitating towards higher debts and lower incomes. These are facts of life. According to the Bureau of Agricultural Economics, the average farm business debt per farm has grown from $58,189 in 1983-84 to $74,000 in 1986-87. That is basically an impossible situation for farmers when it is coupled with their share of the record overseas debt inflicted on us by the Hawke-Keating Government. This has happened while the average farm income on farms has declined from $23,187 to a mere $16,400. I hope that those who sit opposite will show some enthusiasm for ensuring that the farmers of Australia get reasonable incomes, just as they show such enthusiasm for being followers of people like Kelty, Crean and, I suspect, that fellow Norm Gallagher, who claims to be the friend of many of the people who sit opposite. These statistics serve to illustrate the current poor state of primary industry within Australia. However, this picture is made even more depressing when examined in terms of individual primary industry sectors. Let me paint the gloomy picture, highlighting just a few of the problem areas. The average income of family farms in the four horticultural industries surveyed by the Bureau is expected to decline by 46 per cent in 1986-87. Within this sector, the average income of family farms in the citrus industry fell from $16,800 in 1985-86 to a paltry $3,900 in 1986-87. We never hear members opposite talk about the poor citrus farmers of Australia. This fall resulted mainly from a 14 per cent decline in total cash receipts while cash costs, as they always do under socialists, failed to fall. The rice industry is affected equally seriously. Average incomes in family farms in the New South Wales rice industry are expected to bottom out this year at minus $3,200. This is down from last year's income of $13,600. The main factors causing a decline in incomes are lower export returns and rising costs. The people opposite do not seem to be able to understand this. They are always keen to jack up costs, improve wages, et cetera, but they never take into account productivity or what one gets from one's products on world markets over which one has absolutely no control. As a final example, in my State of Queensland continuing drought conditions have contributed to another year of poor yields for sugar farmers in its north and south regions. Average farm incomes are expected to be around minus $6,000 this year. In addition to this, more than half of the farmers are expected to have not very good prospects for the following year. So we are faced with a situation of crisis proportions: drought conditions contributing to poor yields for farmers, forcing the low prices being received for their produce, and further exacerbated by ever-increasing financial overheads. Clearly then, on a larger canvas, we are confronted with a situation which has the potential to herald the decline and ultimate destruction of primary industry within Australia. That is what the honourable member for Page was concerned about. He pointed that out to the Government. On the basis of this bleak outlook, the Government has an obligation to take some positive action in order to alleviate the crisis situation. After all, our future is in the hands of the farmers. It appears, however, that the decline of primary industry has been orchestrated by a group of armchair economists who have failed to consider the practicalities of this situation. They expect Australia's primary producers to be competitive in a world market but, at the same time, are `leg-roping' the producers by placing trade and tariff burdens on them. It is high time the economists controlling our nation reassessed their priorities in line for the betterment of Australia. In 1987 the contribution of primary industry to Australian export wealth was roughly 20 per cent. In monetary terms, it earned a massive $6 billion. In the light of this pronouncement, I would like to add my voice to the support of the President of the National Farmers Federation, Ian McLachlan, for the commitment made by the Prime Minister (Mr Hawke) at the General Agreement on Tariffs and Trade negotiations in Geneva last week. The Prime Minister finally recognised that the increasing burdens being placed on primary producers in the form of import protection measures, including tariff quotas, licensing and embargoes, were bringing the industry to its knees. This decision to free up trade and to make cost imputs to farmers cheap effectively means that subsidies to farmers would no longer be needed to counteract the aforementioned burdens. This would save Australia a huge $1 billion per year. The President of the National Farmers Federation agreed with that point of view. It is clear, then, that primary producers are not after handouts. Rather, what they stand for encapsulates the spirit of free enterprise. History has shown us that they are willing to face hardships and take financial risks in order to achieve their goals. What they do not expect, however, is to be `hobbled' by the Government amidst their efforts to achieve these goals. It is my belief that the Rural and Industries Bank, in seeking to operate as a vehicle of sectoral assistance, will help to facilitate these goals. In the light of this pronouncement then-and I regret the demise of the Primary Industry Bank-the National Party supports this legislation. We hope that the past achievements of the Primary Industry Bank will be the stepping stone to greater achievements in the future by the R and I Bank. Dr HEWSON(Wentworth)(10.03) —It is with pleasure that I rise to say a few words about the Primary Industry Bank Repeal Bill 1987. Before dealing with the Bill, I would like to take up one or two comments raised earlier this evening by the honourable member for Bendigo (Mr Brumby) in relation to a recently released book by one P. Ayres called Malcolm Fraser-A Political Biography. I was disappointed that the `P' did not stand for Pam, but on closer examination in today's Press I see that the author is Philip Ayres. As I understand today's Press, Mr Ayres described Malcolm Fraser as one of the great deregulators. That is not the memory that I have, having watched that man for many years-- Mr Holding —Mr Deputy Speaker, I take a point of order. I do not want to unduly circumscribe the remarks of the honourable gentleman-- Mr McVeigh —Give him a go, Clyde! Mr DEPUTY SPEAKER(Mr Millar) —Order! I take it that the Minister is taking a point of order on the ground of relevance? Mr Holding —That is right. It is a Bill which permits a fair degree of latitude, but it seems to me that the philosophy of the former Prime Minister is totally unrelated. Mr DEPUTY SPEAKER —There is some substance in the point of order. However, it will not have escaped the Minister's attention that during the course of the debate various incumbents of the chair have extended latitude. The debate has been far ranging. I will afford the honourable member for Wentworth the briefest period to address those matters which at first blush seem irrelevant. Dr HEWSON —Thank you, Mr Deputy Speaker. I was making the point that it was not my recollection that the previous Prime Minister was the great deregulator that he is apparently described as in today's Press. I would like to come briefly to the defence of the current Leader of the Opposition (Mr Howard) and the role that he played during that period. To my mind, most of the credit for financial sector deregulation in this country must go to the present Leader of the Opposition. It was he who fought the vested interests in the middle 1970s that were so strongly in favour of a continuation of regulation. It was he that took the task to Cabinet. It was he that basically drafted the terms of reference and selected the members of the Campbell Committee of Inquiry into the Australian Financial System, and particularly the Chairman, Sir Keith Campbell. It was the Leader of the Opposition that substantially pushed through many of those decisions that today are so commonplace in our deregulated financial system. I would suggest that Mr Ayres did not spend enough time checking his sources. Apparently he did not even speak to the current Leader of the Opposition in preparing this document. It seems that the big fellow has not only lost his pants but perhaps some of his memory as well. I would like to refer to the main purpose of this Bill in the context of the debate on privatisation. As described in the mini-Budget this year, this legislation is basically the early stage of this Government's approach to that issue. I am fascinated when I look at what has been done, not only in relation to the Primary Industry Bank of Australia but, more recently, in relation to a number of the other assets that this Government wants to sell. It does not seem to me that the Government is particularly interested in promoting competition, improving efficiency or introducing market discipline. As far as I can see, the Government's primary motivation is just the dollars-the bottom line, the dollars that it seeks in order to pull its Budget back to what it calls balance in the current fiscal year; $1 billion this year and a foreshadowing of $1 billion next year. As I say, there is no motivation to improve efficiency, to introduce market discipline or to promote competition. One of the best examples of this at present is what is happening in relation to the sale of part of one of our assets-our embassy in Tokyo. Here the motivation seems entirely to be to get about $500m or $600m as fast as possible in the current financial year. It has very little to do with what is an appropriate representation of this Government and this country in one of our most important trading nations. It is an embarrassment to one like me who has spent a lot of time in Japan speaking with Japanese at all levels that we have the situation where our Government has really forced the pace just, as I say, to get dollars out of that operation with no particular motivation to improve our representation. The fact that we have a foreign affairs representation, a trade policy representation and an Austrade representation does not seem to be part of the whole issue of the rationalisation of our presence in Tokyo. In fact, we seem to have forced the pace in the way that we have approached the issue. In particular, we seem to have forced the pace in terms of the tendering process that has been adopted. It seems to me that if we were genuinely interested in doing a sensible job in rationalising our presence in Japan, the Government would have taken quite a different tack. The bottom line, as I said before, is simply the motivation of the dollar-more dollars into the kitty, make the Budget look better than it really is and hopefully forestall the sort of criticism that would otherwise come. We can pull that bluff on financial markets only for a certain time. They ultimately vote with their feet, as they will in the case of this Budget. If the Government is serious about privatisation, I think it should realistically respond more substantively to the challenge that is before it. It is no use paying lip service to that concept, it is no use focusing on one aspect of that concept, because there are a number of key aspects of privatisation that we hear nothing about from this Government. As I said, the Government's focus is almost entirely on the selling of assets in order to get a few dollars into the kitty in the space of particular financial year. But if the Government were serious about privatisation it would broaden the concept. For example, the Government should take a long, hard look at the possibility of contracting out a whole range of government services that are presently provided in the private sector, quite often at a lower cost and certainly, in most cases, much more efficiently than is currently the case by government. It is interesting that that dimension of privatisation has not received much attention under this Government; yet it seems to be one of the most potentially productive areas in the debate about privatisation. One can go through a whole range of government activities, including the meal and linen services in hospitals, car services, printing services, courier services, and so on. Many of those services are already available in the private sector and, as I say, they are more efficiently provided at a lower cost, but they are not getting the attention they deserve. Other countries take the situation quite a lot further and even things like the administration of prisons are matters for private sector management. It is a question of introducing competition in some cases or improving efficiency in the processes of government much more significantly than the Government is prepared to do. It should give that concept the hearing that it deserves. Obviously the Government is trying to do what it can in regard to privatisation without offending to a significant extent its main political power base-the Australian Council of Trade Unions (ACTU). It is interesting that, while there has been a quick grab for dollars in an unexpected way in the mini-Budget and again in the official Budget this year, since then the Government seems to have run into quite a bit of trouble in terms of marketing those ideas within its political power base and in convincing the ACTU that it is in fact a worthwhile endeavour. Perhaps most interesting of all through all this process is the fact that the Treasurer (Mr Keating) has gone strangely quiet on the issue of privatisation as he more than anyone else desperately needs the revenue that will come from the asset sale that he has focused on to date. He must get this revenue because clearly his revenue base will dwindle as a result of the effects of the recent stock market collapse. There is also the fact that the crude oil levy is to fade out in its significance in the course of the next couple of years, and the Treasurer recognises that a large part of this year's so-called Budget balance is due to the one-off nature of a number of those key revenue items. In particular, the profitability of the Reserve Bank of Australia in recent years, which has kicked about $2.6 billion into government coffers, is unlikely to be repeated in future years. In fact, if one reads the most recent annual report of the Reserve Bank, one sees two explicit qualifications. First, there is a suggestion that the valuation of the Reserve Bank's books today does not allow the possibility of further substantial one-off revenue gains of that sort because all the opportunities for the Reserve Bank to make money in the way it has in the past-acquiring Australian dollars at, say, 57c and selling them back somewhere in the low 70c range-have now gone. Secondly, the Reserve Bank has warned that it does not intend to be as active in the foreign exchange market, by way of intervention, as it has been in the last 12 or 18 months. If one looks only at the data of the extent of the Reserve Bank intervention over that period, one can only be staggered at how quickly it was forced to move away from what otherwise had been a reasonably free float in the first 12 months of the period of the floating exchange rate. Mr Tim Fisher —It is now a dirty float. Dr HEWSON —Yes, it is now very much a dirty or almost totally fixed float, and I would suggest that it is substantially at the direction of the Government. The Treasurer recognises that that particular revenue source will therefore dwindle in significance as time goes on and he will need to supplement his revenue from that source. According to the Treasurer's own estimates, he will have to forgo some of the revenue that he had hoped to raise, although it is difficult to see how much revenue he would have raised from the identification card that the Government wanted to introduce. So for that reason and a number of other reasons the Treasurer's revenue plight is particularly difficult in the current circumstances and it is easy to see how he has moved so quickly into the area of looking for another fast alternative or a quick buck, and he has focused on the idea of privatisation. Debate interrupted. Madam SPEAKER —Order! It being 10.15 p.m., I propose the question: That the House do now adjourn. Mr Holding-I require that the question be put forthwith without debate. Question resolved in the negative. Debate resumed. Dr HEWSON(Wentworth) —As I was saying, the Treasurer has recognised the difficulties in his current revenue situation and has had to search around as quickly as possible, without ruffling the feathers of some of his political counterparts, to raise as much revenue as fast as he can, and he has focused on the idea of flogging government assets. In this process, as the Government has done on a number of occasions, it has tried to dress up this particular approach by claiming the mantle of privatisation and trying to make it look as if there was not much difference between the Government and members on this side when it comes to issues as significant as privatisation. As I was saying, if the Government is to be serious in the pursuit of the issue of privatisation, I suggest that it be encouraged to broaden its view of what is required and consider not only the possibility of selling government assets but to broaden that concept to consider the possibility of, say, contracting out a whole range of existing government services and, I also suggest, liberalising or deregulating a whole host of other activities and industries-and licensed activities in particular-that are also an important facet of the process of privatisation. I make another comment relating to the question of what should happen to the dollars that are actually raised through the sale of assets of the sort that we have seen in relation to the Primary Industry Bank of Australia (PIBA) or in relation to the Tokyo Embassy or any of the other things on the Government's current hit list. I am absolutely fascinated that the Government has the hide to say in this House that it will sell these things to reduce government expenditure. That cannot be seen in any way to be a reduction in government expenditure or indeed an alternative to government expenditure. The overriding significant economic or fiscal problem at the present time relates to restraint on government expenditure and in fact the challenge to bring about a significant reduction in the size of government and the extent of government expenditure, and privatisation in no way can be seen as a substitute for that. It is important that these two operations be kept quite separate. Do not get me wrong because I, for one, have no particular qualms about selling a lot of existing government assets, and there is a long way to go in that respect. However, the Government should not allow those proceeds to be used as if they were a substitute for the otherwise important restraint on government expenditure. I guess the challenge to the Government should be that the proceeds of those asset sales be set aside for the benefit of future generations, and perhaps in particular they should be used to retire debt. The Treasurer in his Budget Speech perpetuated the illusion that he is indeed retiring debt. Honourable members may recall that in that speech the Treasurer said that he would retire $1 billion worth of domestic debt and $1 billion worth of overseas debt. It is very difficult to make that link, even for some of my first and second year university students, in the context of a balanced Budget. How is it possible that the Treasurer can retire debt while he is running a balanced Budget? The answer is that he is not actually retiring debt at all because the truth is that last year he borrowed about $1 billion too much-he overborrowed to the extent of about $1 billion. That money went into the Government's cash balances, which are now being run down in order to effectively reduce the size of new overseas debts. So the domestic debt is not really being replaced at all because, if honourable members read the Treasurer's accompanying Budget statements, they will see that he is substituting treasury notes for treasury bonds. So he certainly is retiring, if you like, $1 billion worth of domestic bonds but he is replacing them with shorter dated Treasury notes, so the illusion is complete. There is no retirement of net debt and in fact debt will not be retired in this country until we make significant inroads into Government expenditure, until he addresses the real fiscal policy issue at present; that is, how to restrain government expenditure. The Opposition has gone to great lengths in recent months to explain not only the significance of that task but also to make a number of fundamental suggestions as to how it might be achieved. The Treasurer would do well to listen to those suggestions and to embark on the process rather than simply fiddle the books; that is, selling off assets and treating them as if they are reductions in expenditure. The challenge to the Treasurer is that he take the proceeds of those asset sales and actually use them to retire debt rather than perpetuate the illusion as he has done. Our domestic and international debts in particular will not stabilise, even on the Government's most optimistic assumptions, until the early 1990s. More realistic assumptions would probably put it in the late 1990s or early 2000s before our international debt situation will actually stabilise and we will have a possibility to reduce that indebtedness. That is a pretty daunting prospect for Australians, and indeed for the children of most existing Australians. We see in this Primary Industry Bank Repeal Bill an early stage in the Government's process of privatisation and an important initial step in the process of fiscal reform. But that is not as far as it should go; the Government has a very long way to go if it is seriously to embark on a process of privatisation and indeed if it is to face up to the realistic and important fiscal policy challenges that are before it today. In the last couple of days in the House I have been fascinated that the Treasurer could come in here and make light of suggestions of that sort; that he really does not need to adjust his policy stance, he does not need to change his forecast. In fact, he is inclined to turn around and walk out. Madam Speaker, I can assure you that financial markets have a way of getting the attention of even the world's greatest Treasurer and I suggest that that will happen somewhat quicker than he imagines to be the case. Mr HOLDING(Melbourne Ports-Minister for Employment Services and Youth Affairs and Minister Assisting the Treasurer)(10.23) —in reply-I thank honourable gentlemen for their comments, even though most of them ranged far and wide and well and truly raised issues which I think are of general interest to the rural sector and to those who are concerned to debate the economy but which were not for the most part relevant to the very simple issues contained in the Primary Industry Bank Repeal Bill. A question raised by the honourable member for Wakefield (Mr Andrew) I think requires a very short answer: Whether the tender procedures which were used for the purchase of this bank-and they have been raised by the National Farmers Federation-would stand up to scrutiny. The answer is yes. A major independent investment adviser was commissioned by the Primary Industry Bank of Australia (PIBA). It approached all relevant interests necessary to see what their interest was in this purchase. The price that was paid by the Rural and Industries Bank of Western Australia was on line with the asset backing of PIBA and, more importantly, the shareholders-the Westpac Banking Corporation, the Australia and New Zealand Banking Group Ltd, the National Australia Bank Ltd, the Commonwealth Banking Corporation and the State banks of New South Wales, Victoria and South Australia-all regarded as satisfactory the price that was paid. So the answer to the question that was raised by the honourable member for Wakefield is a simple yes. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Holding) read a third time. Motion (by Mr Holding) proposed: That the House do now adjourn. Mr DOWNER(Mayo)(10.25) —Tonight I would like to add a few words to the many tributes that have been made to the late Sir Keith Wilson, who died several weeks ago. Sir Keith's contribution to Federal politics as both a senator for South Australia and as member for Sturt are well known, as are his contributions to public life and to the South Australian community. The simple fact that he was, over time, either President or Chairman of Aged Cottage Homes, the War Blinded Welfare Fund, the Legacy Club, the Good Neighbour Council, the Queen Elizabeth Hospital Research Foundation, the Royal Commonwealth Society and the Immigration Advisory Council is adequate testimony of this. These offices are signs of a man who gave a lot to his community. They are also the signs of a man who was looked to by his contemporaries for leadership, sound judgment and energy in all his endeavours. It is in this respect that I remember Sir Keith. He was a friendly man; he was a man who gave good advice; he was a man of sound judgment-judgment based on his wide experience. But these personal recollections and a listing of Sir Keith's community associations do not pay full tribute to him. Sir Keith played a significant part in the building up of Australia and particularly in the development-both political and economic-of my State of South Australia. The contribution by Sir Keith began very early, while he was in his thirties. He was the founding President of the Political Reform League in South Australia and he led it for nearly 10 years, from 1928 to 1937. This was what one might call nowadays a ginger group that was set up within the old Liberal Federation to modernise and galvanise the Party. Its particular success was in involving amongst its number young city professionals and others who were to go on to play a leading part in the formation in 1932 of the Liberal and Country League (LCL) from a merger of the old Liberal Federation and the Country Party. Quite simply, Sir Keith, through his work in the Political Reform League, was one of the builders of the LCL, the Party that provided such good leadership for South Australia over succeeding decades and which today is transformed as the South Australian division of the Liberal Party. Secondly, again while still quite young, at the age of about 36, Sir Keith was most active in the formation of the Housing Trust of South Australia. This body provided low cost housing to South Australians and helped keep down the State's cost of living compared with that in other parts of Australia. This was a most important aid to the progressive industrialisation of South Australia, a process that saw the State transformed from a mainly agriculturally based economy into a significant manufacturing centre of the nation. Because of its great success in contributing to the economic development of the State, it is not surprising that all other States eventually followed the lead of South Australia and established their own housing commissions or trusts, but it was my State's particular fortune to be the first to be led down this path by Sir Keith and his contemporaries. It was again in assisting this process of industrialisation of South Australia that Sir Keith made another valuable contribution. Today the manufacturing industries of South Australia are well established. But in 1937 there was perceived to be a need for government action to ensure the industrialisation of the State and it was here-as a founder member of the Board of the Industries Assistance Corporation of South Australia-that Sir Keith did so much to assist South Australian industry. Madam Speaker, we remain a small nation with, I believe, our greatest years ahead of us. We are still very much in the business of nation building. Those who go into politics with this as their goal would do well to remember the contribution that Sir Keith Wilson made. In politics, in general community life and in economic development, in adding to the wealth and prosperity of his State and nation, Sir Keith was one who sought to play a part and to do his bit. I conclude by expressing my deep sympathy to Lady Wilson and her family on the death of a great Australian. Mr MILDREN(Ballarat)(10.30) —Earlier this year the Government distributed, through the Minister for Employment, Education and Training (Mr Dawkins) and the Minister for Employment Services and Youth Affairs (Mr Holding), a most significant document aimed at improving, in quality and quantity, the general level of education and training within the Australian community. The title of the document is Skills for Australia. Among other actions seen to be required are the need to raise the level of private sector investment in training and skills formation, the need to improve the employment and training opportunities available to the unemployed and otherwise disadvantaged members of the community, the need to increase the productivity of our education and training resources and the need to evaluate the outputs achieved from the use of those resources. I doubt whether any but the most recalcitrant of reactionaries would disagree with this reading of our needs. Because we tend to expect a great emphasis upon exhortations and less upon action to implement programs, I believe that it is instructive to draw attention to efforts that are being made to upgrade existing skills and to broaden the availability of skills already in industry. I therefore draw attention to the Ballarat program called Inskill. Some months ago the Training and Employment Group Ballarat (TEGB), under the executive directorship of Mr Tom Runnalls, conducted comprehensive training needs assessment surveys covering the engineering and hospitality industries in Ballarat. These disclosed a very serious deficiency in the amount and standard of training being made available to industry in the region. There are probably good grounds for suspecting that conditions are similar elsewhere. In response to a requirement of one of Ballarat's growth industries, the Training and Employment Group Ballarat and the college of technical and further education, the School of Mines and Industries in Ballarat (SMIB), co-operated to develop a program aimed at providing training methods and facilities for new operators. This program was so successful that both the School of Mines and Industries and the Training and Employment Group decided that, by their continuing to work closely together, an effective means could be developed to provide the industrial and commercial training so badly needed. It was this success that led to the establishment of an organisation named Inskill. The two organisations already mentioned were joined by the School of Business Studies of the Ballarat College of Advanced Education (BCAE). Forming a small management committee in April 1987, Inskill's objective was to introduce, as quickly as possible, effective training initiatives without the problem presented by a highly bureaucratic structure. With TEGB providing seeding funds, the School of Mines and Industries made its facilities available for administration purposes. Inskill has two operating arms, and I quote from an introductory explanatory document produced by the Organisation: The first is provision of training consultative Services-working with individual firms or organisations to prepare training needs assessments, training plans and procedures, training programmes, etc. One of our major firms, which is undergoing considerable restructuring in an industry under pressure, is using the program to provide total training needs assessment and a training plan for the next three years. Another leading firm, which has a strong export emphasis, is engaged, through the scheme, in a program of multiskilling. Other local firms are interested in participating in the scheme as well. The second aspect of Inskill's work is the provision of training courses. This involves the development of courses to meet the specific needs of local companies and industries. Courses are conducted in the industry plant or in the education institution itself. Just to indicate the success of the program, I note that 45 companies, representing 500 participants, have co-operated in 40 separate courses. It will also be instructive for honourable members to learn that, as well as the resources of BCAE and SMIB, Inskill has been able to draw upon the services of the Australian Productivity Council, the Australian Chamber of Manufactures, the Metal Trades Industry Association and other organisations. The success of this program to date, in an area of concern and of great interest to the Government, is providing a practical and direct assistance to underskilled or inappropriately skilled industries and businesses. In keeping with the Government's concern to involve both educational institutions and industry in this process, Inskill is deserving of support, and the contributing organisations our congratulations. I believe that its organisation and methodology will be followed with great interest by similar communities throughout Australia, and I congratulate Tom Runnalls, Peter Shiells, Jack Barker, Bill Burdett, Pat Hope and all those who have been involved in breaking through the barrier of words and putting the plan into effect. Mr COBB(Parkes)(10.35) —Tomorrow morning at 11.05 a.m. a Boeing 747 jumbo jet aircraft will lift off from Sydney airport and fly via Perth and Mauritius to Johannesburg. This flight, SA281, will be the last South African Airways (SAA) flight out of Australia under this Government and will end a 30-year bilateral agreement between Australia and South Africa. Some years ago, Qantas Airways Ltd was ordered, against its wishes, not to fly into Johannesburg any more but to go into Harare. Apparently, Qantas will become tainted if it lands in Johannesburg but will not if it lands in that citadel of democracy, Harare! Eighty-five per cent of Qantas passengers who arrive in Harare are then ferried via South African Airways to Johannesburg or, occasionally, by Air Zimbabwe which thinks it is still okay to fly into Johannesburg. The flight going out tomorrow is fully booked. It was booked months ahead, as most flights are which go out once a week. In fact, SAA averages in excess of 300 passengers out of the 317 seats that are available. It has been bringing something like 15,000 passengers into Australia every year and only taking slightly fewer back. The Government has decided to ban SAA after a Commonwealth summit meeting held in London in August last year. The countries present at the Commonwealth meeting, some of which have held no elections this side of 20 years and which have just had bad Amnesty International reports brought down against them, flagellated themselves into a frenzy against South Africa. The Prime Minister of Australia (Mr Hawke) almost fell over himself trying to ingratiate himself with the black countries at the meeting. After giving two months preliminary notice and 12 months mandatory notice, the final flight will go out tomorrow. Australia will become the laughing stock, not just of the Commonwealth, but of the world, because we are the only Commonwealth country which has implemented what was set down at the London conference last year. Zambia, which was one of the most vociferous advocates of the ban has suddenly backtracked. Kaunda has said: It is quite clear that sanctions on air links will not work. Zimbabwe had done the same and, as I have said, takes Australian passengers down to Johannesburg. Canada, Angola and Tanzania, which pontificated at length at the conference, have never had flights, anyhow, between their countries and South Africa. Other countries, such as Botswana and Mozambique, have had the thrust of their moral crusade blunted by economic reality. No other country has implemented this policy. The effect will be that people will still travel from Australia to South Africa but they will do so by a different route. One can go into an office in Sydney now and book a seat on South African Airways and one will fly Cathay Pacific or Singapore Airlines to Hong Kong, Singapore or Taipei and then catch a South African Airways flight into Johannesburg. So what a joke it all is. One is able to do all this at the same price, $2,064 return, which it used to cost to fly the direct route and one will have an extra exotic city thrown in. The only disadvantage is that if one wants to go straight there it takes eight hours longer. No one will be stranded overseas because 22 national airlines fly into South Africa, all of which are members of the International Air Transport Association. Last year, South African Airways carried 4,000,000 passengers, an increase of 28 per cent, and made 108m rand profit. Australia will be disadvantaged by this ridiculous decision because of a loss of tourists. Sydney and Perth will lose 220,000 litres of fuel sales a week and air navigation charges of $10,000 a week. The value of 32 beds in Perth hotels a night will be lost. Food suppliers will lose and the crew allowance spending will be forgone. It all adds up to $10m a year. The whole exercise is a charade. It is farcical and childish. It will have no effect except to adversely affect us. Despite all the highsounding rhetoric, no Commonwealth country went along with the decision. The coalition will restore these flights when we return to government after the next election. Mr LEE(Dobell)(10.39) —It is perhaps appropriate that I follow the honourable member for Parkes (Mr Cobb) as I wish to raise the question of anti-Semitism and the activities of the League of Rights. On 26 September this year I had the privilege of handing out Australian Labor Party how to vote cards in the New South Wales local government elections at a very small booth called Warnervale in Wyong Shire. While I was calmly and rationally handing out my Labor Party how to vote cards, unfortunately, for most of the afternoon I was harangued by a gentleman who was handing out Liberal Party how to vote cards about the threat to Australia and the Western world from International Jewry. At that time there was the great debate about the Australia Card. That gentleman was convinced that, as predicted in the Book of Revelation, this Government intended to tattoo bar codes on people's foreheads and numbers on people's arms as part of an international conspiracy. One of the major conspirators was one Henry Kissinger who, this gentleman proceeded to explain to me, visited Australia several years ago to help to arrange the secret plot which was the Australia Card. It had all been planned by the Rothschild family, again as part of the international Jewish conspiracy. This person who was handing out Liberal Party how to vote cards explained to everyone at the polling booth that our credit cards were also part of the international Jewish conspiracy. He produced a book which even had a diagram of a supermarket checkout. Madam Speaker, I am sure that you would be aware that in some modern supermarkets the groceries are pushed across a little computer that detects the bar code numbers. In the sketch that he had, a little camera had been added which looked at the bar code which was on everyone's forehead as he or she went through the supermarket check-out. It is all very well for us to laugh at that. I was a bit amused initially. But I think that it is of great concern not only to honourable members on this side of the House but also, I would hope, to many honourable members on the Opposition benches that people who are active in politics in Australia honestly believe that there is a conspiracy by the Jewish community. The gentleman provided me with an excerpt from an American magazine the headline of which read, `Ignorance, Cowardice, Treason threaten our freedom: Christian tradition-prosperity and private enterprise are menaced: the issue that supersedes all others is the aggressions of the anti-Christ-the International Jew'. The article explained that the international Jewish community is subverting not only America but all of the Western world. I believe it is disturbing that some elements-as I mentioned, the gentleman was handing out Liberal Party propaganda-have been associated with the League of Rights. A gentleman called Mr David Irving toured Australia recently. He is a well-known revisionist British historian. I am indebted to a magazine called the Australian/Israel Review which, I am sure, would be known to you, Madam Speaker, for providing me with some information on that gentleman. His most famous claim to fame is that he wrote a book which alleged that Adolf Hitler did not know about the mass extermination orders for European Jewry, gypsies, trade unionists and others who were exterminated during the Second World war. The Australian Broadcasting Corporation is currently replaying a series on Sunday afternoons which is presented by Abba Eban, a former Israeli Foreign Minister. The name of that series is Heritage: Civilisation and the Jews. In that series he explains very eloquently that anti-Semitic feelings by people over the years has often resulted in outbreaks of violence against Jews and other people. I hope that it would be the view of everyone in this chamber that people associated with the League of Rights and others who are seeking to spread the hatred of the Jewish community will wake up to themselves and seek to dissociate these neo-nazis from Australian political life. Mr DONALD CAMERON(Moreton)(10.44) —We have just witnessed the most incredible attempt by the honourable member for Dobell (Mr Lee) to resurrect the identity card issue. I remind the honourable member that, in the last Federal election, the political parties opposed to the ID card commanded 4.8 million votes while the Australian Labor Party (ALP), which was in favour of the ID card, commanded only 4.23 million votes. If this is an overt attempt by the Government to return that issue to the Parliament, I am absolutely aghast. Coming back to figures, I ask that we send for the Human Rights Commission, that we start a High Court challenge, that we turn out the street marchers, that we have the Senate intervene, that we invoke an international covenant and that we call on the United Nations to intervene. Should this not be our response to the little reported fact that, although the coalition parties Australia-wide outpolled the Australian Labor Party by more than 20,600 votes, the Australian Labor Party ended up with some 24 more seats in this Parliament? You people got 50.3 per cent of the two-party preferred vote across this country and yet you have a majority on that side of the chamber of some 24 seats. I have listened here for years to you people harping and carping-- Madam SPEAKER —Order! Will the honourable member please speak through the Chair? Mr DONALD CAMERON —Well, Madam Speaker, I have listened for years to you harping and carping about democracy-- Madam SPEAKER —Order! The honourable member misunderstands me. He may not criticise the Chair. He should speak through the Chair. Mr DONALD CAMERON —Thank you, Madam Speaker. Over the years I have heard honourable members who sit on your right say how impure democracy is in this country in that Labor has never had a fair share of the seats in terms of its votes. I suggest, Madam Speaker, that you convey to those people on your right the fact that when any party can get 50.3 per cent of the vote and yet collect 58 per cent or more of the seats, there is something wrong with the redistribution that Mick Young put in place only three or four years ago. I am not in the game of attacking the Australian Electoral Commission. But I ask honourable members in all seriousness: do any of them believe, any one of them, that Mick Young would appoint any person to the Electoral Commission if he did not think that person was safe? Government members-Shame! Mr DONALD CAMERON —Listen to them appeal to that nasty attack! `Shame', they say. Well, I say to them-- Mr Lee —I take a point of order, Madam Speaker. Is it in order for the honourable member to cast aspersions against the independent Electoral Commission without moving a substantive motion? Madam SPEAKER —Members of the Australian Electoral Commission are not members of the House but I suggest to the honourable member for Moreton that he speak of the Leader of the House by his correct title. Mr DONALD CAMERON —Well, can anyone imagine the Leader of the House appointing any person to a high position if he did not believe that person was politically safe? I challenge the Government to come to grips with its conscience. For years Government members have paraded themselves as the honest brokers of democracy in this Parliament. But how can they sit there with 58 per cent of the members of this Parliament and yet barely a majority of votes. Surely, if they are as honest as they parade themselves to be they would be prepared to stand up and say that something is dramatically wrong in this country. In the last election the ALP got 4.23 million votes, the coalition got 4.25 million votes and yet, even with the half a million Australian Democrats' votes, those opposite sit there in great dominance of this so-called democratic institution. Madam SPEAKER —Order! The honourable member's time has expired. Mr MILTON(La Trobe)(10.49) —One of the most worrying problems that exist in the world today is the increasing harmful effects that pollution of all kinds is causing to the world environment. I have spoken about pollution by radioactive wastes, which continues at an ever-increasing rate as we continue with our process of mining uranium and manufacturing nuclear weapons. We operate nuclear power stations and we reprocess nuclear materials. I assure the honourable member for Kalgoorlie (Mr Campbell) that I will not talk about that again tonight. I thought he might be worried about that; but he can sit down. The pollution caused by chemical wastes arising from the burning of fossil fuels is another major problem. The production of industrial chemicals is also causing major problems. Chlorofluorocarbons are a group of industrial chemicals used as propellants in aerosol cans, as coolants in refrigerators, as liquid cleaners and as plastic foam. The break-up of the chlorofluorocarbons in the atmosphere, after they have escaped from the cans, refrigerators, cleaners and plastics, is causing the breakdown of the ozone layer in our atmosphere. Without the protective ozone layer we are all subjected to the full effects of ultraviolet radiation from the sun, which will cause a rapid increase in the incidents of skin cancer amongst the human population. The burning of fossil fuels produces mainly carbon dioxide, which acts like the glass of a greenhouse, allowing the warmth of the sun to penetrate to the surface of the earth, but preventing those rays from radiating back into space. The consequence is a warming of the earth to the extent that the climate of whole continents could change, with warmer seas and melting ice caps causing widespread destruction as the seas rise to flood our coastal cities and deserts spread where once fertile plains provided thousands of tonnes of crops and pastures. In addition, we have a growing number of chemicals, some of which have been used as pesticides, and others which have been used to provide fertilisers to stimulate the growth of our agricultural products. The discovery of dangerous levels of chemical residues in our export meats has led to the subsequent discovery that many hundreds of hectares of land in Australia may be no longer used for growing crops or pastures, as far as can be ascertained, for all time. Many of these chemicals have become pollutants and must now be banned from further use by farmers. Whilst it is true that scientists and politicians alike have now begun to take action to reduce the harmful effects of ozone destruction and the greenhouse effect of the burning of fossil fuels, and the overuse of chemical fertilisers and pesticides, there is no evidence that we have learnt our lesson from the true cause of pollution of our planet. Pollution is rife because humans are wasting the natural resources of our planet by overuse and by a complete disregard of the fact that those resources, once depleted, cannot be replaced. In addition, there has been virtually no attempt to reduce the world's human population to a limit which the resources of the planet can sustain. While the advanced industrial nations of the world use energy resources at ever increasing levels, the people of the underdeveloped countries live in primitive conditions of squalor, disease and hunger. The underdeveloped countries look with envy at the developed nations and look forward to the day when they can use electricity, gas, petroleum, coal and nuclear power at the same level as that used by the industrial nations. If all the people of the world were to consume energy at the rate of the industrial nations, the world would become virtually uninhabitable by the middle of the next century. There is only one answer to the problem I have covered only briefly in this speech-that is, for the industrialised nations to cut back their use of fossil fuels and nuclear power by conserving their energy and by turning to alternative forms of energy generation. Solar power, wind power and tide power are all sources of energy which so far have only been used as limited sources of power. So far the climate of the earth has been able to stabilise itself by self-corrective means over hundreds of millions of years. The climate of the earth has provided the right balance of temperature and moisture to develop and sustain life. Some species of life have gone into extinction. If the human race is not careful, we will follow the dinosaurs along that path. The danger is that, although we have discovered the scientific method of deciphering the complex changes which occur in our atmosphere, we have not found the method of stopping that pollution. Madam SPEAKER —Order! The honourable member's time has expired. Mr SMITH(Bass)(10.54) —As the shadow Minister for science and energy, I certainly appreciate the remarks made by the honourable member for La Trobe (Mr Milton). As the shadow Minister for science, matters scientific have certainly captured my thoughts in recent years. It is clear that we need a science culture in Australia. The Government, in its endeavours to make research pay its way, is neglecting the very real need for a renaissance of science in Australia-a science culture that could revitalise out schools and research institutions. An injection of interest in and support of science by government is vital if we are to fashion an environment in which scientific creativity is valued, nourished and allowed freedom of expression. The current Minister for Science and Small Business (Mr Barry Jones) said in an address last year at Melbourne University that the relations between science and government were improving, and that `Australian science could be poised on the brink of the most important and most productive period in its history'. Nothing could be further from the truth. By September this year the Minister was saying that the Government's focus was too narrow, concentrating on the immediate, the financial and the obvious. How right he is! What has happened? The 15-year-old Department of Science has been axed with splinters flying in all directions. School students are shunning science and mathematics. A Western Australian study, for example, recently found a 40 per cent decline in the number of top high school students entering maths and science courses. A report commissioned by the Australian Science Teachers Association suggests reasons for this decline. It found that there was a shortage of trained science teachers, that primary teachers have little useful training in science and that many lack a positive attitude to teaching science, and that the amount of time devoted to science is often inadequate. Government intervention is tightening its central grip on the education system. The Minister for Employment, Education and Training (Mr Dawkins) is locking his policy advisory bodies into an efficiency agenda. The Australian Council of Trade Unions and big business are to be given a major role in matters affecting schools and higher education. Academics have been relegated to lower level advisory bodies. The Commonwealth Scientific and Industrial Research Organisation, Australia's premier research body, is directed to become less science oriented and more applications oriented. Government charges for part time and external students in higher education are discouraging many able and talented students from undertaking higher education. The Government has declined to increase Commonwealth post graduate awards to the level required by industry and research institutions. Overseas students unable to pay the overseas students charge are threatened with deportation-and this at a time when one in five post-graduate students studying science and engineering is from overseas. The result of long years of neglect is that only 9 per cent of the work force hold a degree or its equivalent in physics. Australia is graduating only 300 three-year trained, 100 four-year trained and 50 PhD graduates in a year, when it needs 1,000 higher degree physics graduates and 1,700 more first-degree graduates to achieve the Government's goal of increased private sector research. The catchcry from the Government is relevance. The question is: Can a government recognise, let alone determine, relevance? The attempt by the Government's corporate state apparatus to `pick the winners' in research is likely to be as disastrous as its capacity to pick the winners in industry. At a conference organised by the new Department of Industry, Technology and Commerce earlier this year to select new technologies for the future not one of the 200 top industry, business, academic and government delegates was prepared to select a specific technology. The majority believed this was the role of the market-place-not the Government. The Government, they said, should concentrate on improving the basic infrastructure problems such as poor education, lack of skills, and lack of money for basic research. As Professor Penington pointed out, `fundamental research is an investment in the national intellect.' He went on to say: If we put all our basic research `eggs' in just a few baskets, we could find in five years' time that we have chosen the wrong baskets and then not have the people, the knowledge, or the international contact which would allow us to catch up. An examination of case histories shows that the solution to applied problems most often comes out of areas that never would be targeted by assessors of `relevant' research. Who would have thought that nineteenth century studies on the sex cycle of moles would lead to the twentieth century Nobel Prize for the control of cancer? The present focus on Government review and `relevance', when few criteria can be agreed upon, is like putting the cart before the horse or making a car without an engine. I sound a warning to the Government: it must be careful to maintain a balance between fundamental and relevant research. To do otherwise will do irreparable harm to the Australian science community. Finally, I quote the United Kingdom Committee of Vice Chancellors and Principals which issued the following warning: There is a tendency for research to be distorted towards glamorous high-tech projects which attract outside funding . . . at the expense of work likely to lead to the greater benefit for the greater number of people. Madam SPEAKER —Order! The honourable member's time has expired. Mr LEE(Dobell)(10.59) —In response to the honourable member for Bass (Mr Smith), who, like many lawyers in this place, makes excellent contributions to debates, I feel I should say something as one of the few members of this House with a degree in science and a major in applied physics. The honourable member failed to mention that this Government is the only one which has introduced 150 per cent tax deductibility for research and development. That will create a great boost for science and both pure and applied research. In addition, his comments that the Commonwealth Scientific and Industrial Research Organisation will spend less time on pure applications and more on practical applications are comments that all members in this House should endorse. I am sure that that will lead to many developments in many areas that will assist the Australian community for years to come. Madam SPEAKER —Order! It being 11 p.m., the debate is interrupted. House adjourned at 11 p.m. The following papers were deemed to have been presented on 26 October 1987: Defence Act-Determination-1987-No. 71-Overseas Living Allowance and other allowances. Public Service Act-Determinations-1987-Nos 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101. Remuneration Tribunals Act-Remuneration Tribunal-Determination-1987/10-Director, Australian Institute of Health and holders of public offices on other bodies. The following answers to questions were circulated: (Question No. 17) Mr Reith asked the Minister for Administrative Services, upon notice, on 14 September 1987: (1) Have the Government and the Victorian Government agreed on the transfer of Commonwealth land at Portsea, Victoria, to the Victorian Government. (2) Has the Government sought from the Victorian Government a payment in either cash or kind in consideration of the transfer. (3) What sum is being sought from the Victorian Government as payment. (4) On what basis does the Government seek a transfer payment from the Victorian Government. (5) Is it acceptable to the Government that the land to be included in the National Park at Point Nepean may be sold to the public to offset the transfer payment. (6) Is he able to say whether the Victorian Urban Land Authority has prepared a feasibility report and subdivisional plans for and on behalf of his or another Department; if so, (a) for which Department was the report prepared, (b) what estimates of development costs and block valuations have been made and (c) will the Government release the feasibility study and subdivisional plans for public comment. (7) Will part of the Commonwealth land at Portsea be subdivided; if so, (a) what is the purpose of the subdivision, (b) what area is to be subdivided, (c) how many blocks will be created, (d) what is the average size of blocks, (e) will the Government invite submissions from the public on the proposed subdivision, (f) is the Government required by any law to prepare an environmental impact statement and (g) will the Government prepare an environmental impact statement prior to proceeding with any subdivision. (8) Would all of the funds raised by the sale of subdivided land at Point Nepean be available for the development of the National Park; if so, (a) what sums and (b) for what purposes would the funds otherwise be used. Mr West —The answer to the honourable member's question is as follows: (1) Yes, the Commonwealth Government has agreed that 209 ha at Portsea will be transferred to the Victorian Government. Final details of the arrangements are yet to be settled. (2) Yes. (3) The value of the land to be transferred has yet to be determined. It has been agreed, however, that the property be valued on the basis of conservation/recreational use in line with the State's plans to develop the area as a National Park. (4) See (3) above. The transfer will be financed by a property exchange. The State is to transfer to the Commonwealth property of equivalent value to that at Point Nepean. (5) As far as I am aware there is no proposal to sell any of the land included in the National Park to the public. (6) As part of the Government's rationalisation of its land holdings at Point Nepean the feasibility of redevelopment for residential purposes of approximately 10 hectares of land outside the area of the proposed National Park was investigated. A study provided by the Victorian Urban Land Authority formed part of these considerations. As the Government will not take any decision to proceed with such a development no useful purpose would be served in making the feasibility study, or portion of it, available. (7) The Government has no plans to subdivide any Commonwealth land at Point Nepean. (8) Not applicable. (Question No. 79) Dr Klugman asked the Minister for Aboriginal Affairs, upon notice, on 16 September 1987: (1) What is the definition of Aborigine or Torres Strait Islander for the purpose of receiving benefits under (a) federal and (b) state laws. (2) Has his attention been drawn to the alleged increase by over 40 000 above the natural increase in the number of Aborigines between the 1981 Census and 1986 Census. Mr Hand —The answer to the honourable member's question is as follows: (1) (a) The definition of Aborigine or Torres Strait Islander used for the purpose of receiving benefits under Commonwealth law or programs is: ``An Aboriginal or Torres Strait Islander is a person of Aboriginal or Torres Strait Islander descent who identifies as an Aboriginal or Torres Strait Islander and is accepted as such by the community in which he or she lives''. (b) Definitions used by the States are matters for the States. (2) I am aware of the significant increase in the number of people identifying as Aboriginal and Torres Strait Islanders between the 1981 and 1986 Census counts. I believe that the rise can be attributed to the increased willingness of people to identify themselves as Aboriginal or Islander as racist attitudes decline and to the sensitive approach taken by the Australian Bureau of Statistics. I understand the Bureau is preparing a detailed evaluation of the Aboriginal and Islander census count. (Question No. 103) Mr Connolly asked the Minister for Social Security, upon notice, on 21 September 1987: (1) How many persons had their social security benefits, in each category of benefit, cancelled since September 1986. (2) How many of these persons have been re-instated as social security beneficiaries. Mr Howe —The answer to the honourable member's question is as follows: (1) Tables 1 and 2 below show, respectively, the number of persons whose pension payments were terminated between 22 September 1986 and 21 August 1987, and whose benefit payments were terminated between 1 September 1986 and 18 September 1987. The number of terminations does not necessarily indicate anything untoward since the majority relate to advised changes of circumstances including death, formation or reformation of a marital relationship, taking up full time employment or an increase in private income or assets. Some of these cancellations were the result of review activity initiated by the Department of Social Security. For the various pension and benefit categories, the numbers of cancellations due to reviews from the end of September 1986 to 27 August 1987 were: Age pension and other ... 163 Invalid pension ... 388 Sole parents benefit ... 18,086 Unemployment benefit ... 28,481 Sickness Benefit ... 2,281 Special benefit ... 316 Total ... 49,715 (2) Details of the total number of persons who had their payments re-instated and of the categories of pension and benefit concerned are not available prior to 1 July 1987. For the period from 1 July 1987 to 27 August 1987, 3,679 pension payments were terminated as a result of the above reviews and 821 of these were re-instated either because new evidence showed that the person was in fact eligible or because the client had again become eligible. In the same period, 5,360 benefit payments were terminated as a result of reviews and 1,309 of these were re-instated. Table 1 PENSIONS PAYMENTS TERMINATED BETWEEN 22 SEPTEMBER 1986 AND 21 AUGUST 1987 BY PENSION TYPE, AUSTRALIA Pension type Terminations Death Total Age 22,114 61,196 83,310 Wives/carers (Age) ... 1,349 111 1,460 Invalid ... 7,819 7,587 15,406 Wives/carers (Invalid) ... 5,018 271 5,289 Sheltered employment allowees incl. wives ... 612 42 654 Rehabilitation allowees incl. wives/carers ... 2,691 13 2,704 Widows class `A' ... 19,648 132 19,780 Widows class `B' and `C' ... 5,535 897 6,432 Supporting parents ... 79,269 209 79,478 Total ... 144,055 70,458 214,513 Note the details exclude interstate and intrastate transfers and transfers between pension types but they do include transfers from pensions to benefits. Table 2 BENEFITS PAYMENTS TERMINATED BETWEEN 1 SEPTEMBER 1986 AND 18 SEPTEMBER 1987 BY BENEFIT TYPE, AUSTRALIA Benefit type ... Total Unemployment ... 908,340 Sickness ... 112,640 Special ... 101,630 Total ... 1,122,610 Note the details exclude interstate and intrastate transfers and transfers between benefit types but they do include transfers from benefits to pensions. The figure for special benefit terminations may be overstated since some short-term categories of special beneficiaries transferring to unemployment benefit are not recorded as transfers. The figures for the number of payments terminated on account of deaths are included in the total benefits terminated. (Question No. 145) Mr Cowan asked the Minister representing the Minister for Home Affairs, upon notice, on 24 September 1987: Did any National Media Liaison Service employees work at the Australian Labor Party Secretariat or act as spokespersons for the ALP during the last federal election campaign; if so, (a) who were they, (b) at whose direction and with whose concurrence did they work for the ALP, (c) did they seek official leave and (d) how does such activity reconcile with regulations restricting the involvement of public servants in party-political campaigns. Mr West —The Minister for Home Affairs has provided the following answer to the honourable member's question: (a) The Director of the National Media Liaison Service and the Ministerial Media Group, Colin Parks, worked at ALP Headquarters in Sydney during the election campaign. (b) Mr Parks was directed by the then responsible Minister, the Minister for Sport, Recreation and Tourism, Mr Brown, to act as co-ordinator of ministerial activity during the campaign. (c) Mr Parks did not seek official leave. (d) Mr Parks is not a public servant, but Ministerial staff. (Question No. 219) Mr Cowan asked the Minister representing the Minister for Home Affairs, upon notice, on 7 October 1987: Were any National Media Liaison Service employees relocated to the Division of Hinkler during the last federal election campaign; if so, (a) who was relocated, (b) for what periods were they relocated, (c) what was the purpose of their relocation and (d) how does such activity reconcile with regulations restricting political activity by public servants. Mr West —The Minister for Home Affairs has provided the following answer to the honourable member's question: No National Media Liaison Service employees were relocated to the Division of Hinkler during the election campaign.