Monday, 2 November 1987 Madam SPEAKER (Hon. Joan Child) took the chair at 2 p.m., and read prayers. Mr LIONEL BOWEN(Kingsford-Smith-Deputy Prime Minister) —Madam Speaker, I regret to inform the House that the Prime Minister (Mr Hawke), whilst recovering, is still unwell and will be absent from Question Time today. As a matter of courtesy, I inform the House that the Minister for the Arts, Sport, the Environment, Tourism and Territories, Mr John Brown, departed on Government business overseas on 30 October. He will return on 14 November. Senator Richardson, Minister for the Environment and the Arts, will act for Mr Brown during his absence. The Minister for Resources, Mr Peter Morris, will represent the Acting Minister in this chamber. Mr HOWARD —Does the Deputy Prime Minister share the view of the Minister for Social Security that calls for a wealth inquiry should not be shelved just because of the stock market fall? Mr LIONEL BOWEN —This matter has been canvassed for a number of days at Question Time. I remember answering a question on behalf of the Prime Minister and saying that the Prime Minister was awaiting information from the Australian Statistician on what sort of data would be needed even to commence such an inquiry. I think that the matter is best left until such time as the Prime Minister has that information. Mr HOLLIS —I ask the Minister for Primary Industries and Energy what action is being taken to protect Australia's gluten exports from subsidised competition from the European Community (EC). Mr KERIN —The honourable member has a gluten processing works in his electorate, hence his interest. There was an argument in the Australian Financial Review last week which accurately reflected the concerns of the industry about this matter. I must say that there is an unconfirmed report that the EC decision has actually been postponed for a week. However, aggressive marketing involving price discounts and subsidies by European gluten producers is causing severe damage, through loss of markets and price reductions, to Australia's $48m to $50m wheat-gluten export industry. Established markets in the United States of America (US), Taiwan, New Zealand and Japan are being threatened by the predatory tactics of the EC exporters. This issue was taken up earlier this month in Brussels by the Australian industry and officials and was discussed in the context of the recent Australian-European Community ministerial consultations that the Minister for Trade Negotiations and I attended. The EC has recently suspended prefixation facilities and reduced export refunds by almost 50 per cent to 100 European currency units (ECUs), that is, $US124 per tonne. These arrangements are in place while the European Commission reviews the situation. A decision by the Commission on future refunds is expected shortly. Market information provided by industry clearly demonstrates that the EC exporters are undercutting world prices by up to $US200 to $US250 per tonne in order to secure market share. Under the circumstances an EC subsidy of $US124 per tonne is clearly not necessary to make EC exports competitive. We consider that the refunds should be removed completely. The fact that the Commission has moved quickly to review the situation and reduce the refund by such a substantial amount is recognition that subsidy levels are too high; in other words, they have simply no need to put so much export subsidy on this product to get a market. Action is also being considered in Washington by the United States gluten industry to protect the local market from inroads by the unfair European competition. I should also point out to the House that the US recently passed its agricultural Bills for this year, and they amount to $US56.8 billion. While looking at agricultural subsidies, the proposals being put forward by the EEC now amount to 41 billion ECUs, which is about six billion ECUs over the 1.4 per cent of the value added tax, and hence all the problems that the EEC is having in settling all its agricultural budget. The funding of this amount gives the House an idea of the unfair competition and the stupidity that Australian producers face in trying to gain world markets. Mr SINCLAIR —I address a question to whoever, for today, represents the Minister for Industry, Technology and Commerce. In so doing, I comment that ministerial attendance for Question Time in this place is deplorable. Has only one Australian company out of 65 approached by Austrade tendered for $1 billion for Government procurement in Japan? Is this because of Austrade's failure to satisfactorily involve Australian industry in the tender process or is it because Austrade failed to involve Australia's manufacturers in the identification of suitable contracts? Will the Minister set up a liaison with Australian manufacturing industry to ensure that this failure of communication between Austrade and industry does not again lead to such a significant loss of export opportunity? Mr WILLIS —I have seen a report on the matter raised by the right honourable gentleman. I am not in a position to give him a response on this matter. But I will make sure that he receives a response in the near future. Mr LAVARCH —My question is directed to the Minister for Immigration, Local Government and Ethnic Affairs. Has the Minister's attention been drawn to media reports that the manager of a duty-free shop in Surfers Paradise had replaced some of its staff with Japanese tourists? Can the Minister advise how many Japanese are being employed by this store and what type of visa each has? What are the conditions attached to the visas, and, if work is permitted while these people are in Australia, are they expected to move regularly and undertake casual work only? Is the Government concerned that foreign nationals are taking the place of Australian workers, putting Australians out of work and on to unemployment benefits? Would the Minister's Department encourage business to assist Australian employees to gain sufficient language skills to service foreign customers, rather than specifically seek out foreign tourists to perform these duties? Mr YOUNG —The issue raised by the question reflects a growing reality. To ensure that continued growth in Japanese tourism, service providers have recognised the need for their businesses to have a knowledge of the Japanese language. The extent to which this can be met by Japanese temporary residents as opposed to Australians is presently the subject of discussions between the Department and the tourism and hospitality industries. The store in question employees seven Japanese staff out of a staffing total of 17. Initial inquiries indicate that four of the seven are working holidaymakers. The Department is separately reviewing the employment and entry conditions of the other three. The working holidaymaker scheme is reciprocal. It allows young Japanese, usually between the ages of 18 and 25, to holiday in Australia and to supplement their living costs with casual employment, usually no more than three months in six, and Australians travelling to Japan benefit from the same arrangement. Parallel arrangements exist with some other countries, between Australia and them. The Government is concerned that foreign nationals appear to be taking the place of Australian workers in this instance. However, with the continued expansion of the tourist industry comes more, not fewer, jobs for Australians. There have been calls from within the hospitality and service industry that perhaps we should focus on the language needs of those people travelling to Australia, particularly with the enormous increase in the applications being reflected in Japan itself. Obviously, a lot of people in the service industries are finding it compatible in the supply of those services to have people who can also speak the language. Mr PEACOCK —I refer the Treasurer to the Budget forecast that investment in plant and equipment would increase in real terms by 3 per cent in 1987-88. In the light of the increased uncertainty following the fall in prices on the stock market, I ask the Treasurer whether this forecast should be revised downwards and, if so, by how much? Mr KEATING —I have said on a number of occasions that if one takes the plant and equipment investment numbers and abstracts from them the decline in motor vehicle sales, one finds that in this coming year, as in the past couple of years, we have had reasonably good numbers for plant and equipment of the import replacement and exporting variety; in other words, of the kind we really need. I think that that adjusted figure on this occasion shows plant and equipment growing of the order of 7 to 10 per cent. There may be some diminution of investment effects as a result of the volatility in markets but I am not certain that that is true. Just speaking, as I have in the last couple of days, to some of the executives of our largest industrial companies, they told me that they are pressing ahead with their investments. They see the opportunities here in Australia and they are going to exploit them. The same has been said of investment for export. So I think it is too early to say, to be frank, what impact the stock market realignment will have upon investment in plant and equipment because many executives who have had to concentrate to some extent on their share market price and activity in their shares have tried to continue the job of keeping their business growing, and relieved somewhat of that responsibility, given the way in which the stock market has behaved in recent times, there may be a greater propensity to get on with the job and maintain the investments and the product than some honourable gentlemen may believe. Mr MARTIN —Has the Minister for Primary Industries and Energy seen media reports which claim Federal members of Parliament representing coal mining districts are out of touch with problems in the Australian coal industry? What progress has been made in developing a long term strategy for the coal industry? What input have local members had in developing this strategy? Mr KERIN —I thank the honourable member for Macarthur for his question without notice. As all honourable members will know, the honourable member for Macarthur heads a committee of very concerned backbenchers about this whole issue. All honourable members with coal mines in their electorates are, of course, very concerned about this. There are some very obvious differences of attitudes about the coal industry, particularly as between New South Wales and Queensland, but basically everyone is of the view that this up until now very successful industry is undergoing a period of restructuring and that therefore there is a need of the Government to give some attention to this matter. The various views being put forward by the most interested parties of all-that is, the coal miners at the company level and the coal miners at the worker level-also represent two different points of view. The Government is trying to establish how best to facilitate some decent restructuring in the industry that does not impact too greatly upon the work force and that also ensures from the company point of view that some of the more efficient mines do not go to the wall for a range of reasons. This is an issue of staggering complexity. There are many points of view about it. I convened a meeting, again after consultation with the committee of the honourable member for Macarthur, with all interested parties last Friday in Sydney. I must relate to the honourable member that some progress was made there in getting a better understanding of issues between the parties involved. I am applying the national interest provisions with a lot of rigor at present. I believe that we are reaching a point where the market is starting to pick up and that the Government needs to exercise this power, in the interests of the industry, in a more sensitive way. I will be going to Japan in two weeks time to discuss the whole question. Mr Sinclair —Not another one! Mr KERIN —If members of the National Party of Australia do not want me to go to Japan to talk about the beef industry, the coal industry and the iron ore industry, they had better say so. Madam SPEAKER —Order! The Minister will ignore the interjections. Mr KERIN —It is always a great trick, Madam Speaker, of members of the National Party to say that the Minister should go overseas to solve this problem and that problem, but the moment one goes, of course, they make the silly statement, `Here it is, another old trip'. The point is that this Government takes the problems of the coal industry, the iron ore industry and the beef industry very seriously. The back bench of the Government takes the interests of these industries very seriously. It is a pity that members on the other side of the House do not pay attention to the trade problems and the industry problems of this country instead of making petty political points. Mr BRAITHWAITE —My question is directed to the Minister representing the Acting Minister for the Arts, Sport, the Environment, Tourism and Territories. Is there an Acting Minister? Mr Lionel Bowen —It was announced today. Mr BRAITHWAITE —Right. Did Cabinet last week endorse a submission made by the Minister for the Arts, Sport, the Environment, Tourism and Territories to sack the nine-member Christmas Island Assembly which was voted in only two weeks ago, on Saturday, 17 October? Is the Government flying two officers of the Australian Federal Police to the island tomorrow to assist local police in the event of unrest? Rather than have the Minister face the risk of being labelled the Colonel Rabuka of Christmas Island, will the Acting Minister this afternoon make a full statement to the Parliament on the reasons for this precipitate and clandestine operation? Mr PETER MORRIS —I note the honourable member's interest in this question. The matter is one of some complexity. I do not have the details with me to provide the answer that he seeks. The matter remains under consideration. I will seek advice on the matter and provide him with an answer at the first opportunity. Mr O'NEIL —Is the Minister for Resources aware that there is no piped water available to areas west of Ceduna in my electorate of Grey? Will the Minister give an undertaking to visit these areas and have discussions with local community representatives regarding the possibility of piped water being laid on under COWSIP-the country towns water supply improvement program? Mr PETER MORRIS —I thank the honourable member for his question. I am aware of the situation and am conscious of the difficulties created for the communities concerned. The provision of safe, adequate supplies of water is a major priority of this Government. In fact, we are providing $5.5m this year. Opposition members-Ha, ha! Mr PETER MORRIS —We understand that it is not a matter of priority for the National Party of Australia, but we are providing that amount of money. Of that amount, $534,000 will be allocated to South Australia. Proposals for South Australia emanate from the South Australian State Government, which will put forward projects for consideration by myself and the Federal Government. I recognise and the Government recognises that Ceduna is an important tourist centre on the west coast of the honourable member's electorate. The local councils there have been doing their best to exploit the opportunities that exist for tourism. There has been considerable growth. In accordance with the honourable member's request, I will take the opportunity when the occasion first arises to visit Ceduna and discuss with him, his constituents and the local council the matters that he has raised. Mr MILES —I refer the Minister for Aboriginal Affairs to the announcement made by the Prime Minister on 2 September that the Government would seek to strike a treaty between Aboriginal and non-Aboriginal Australians, and the Prime Minister's assertion that this announcement was a considered statement. Who will be the parties to the treaty? Who will be consulted, and how will these consultations be conducted? Who will represent the parties to the treaty, and who will sign the proposed treaty? Mr HAND — I thank the shadow Minister for his first question of the session. As I said the other day, we will be announcing, towards the end of this year, a program that will enable us to have meaningful discussions between Aboriginal and non-Aboriginal people. As I have explained to him privately, I am not about to start letting out bits and pieces before I conclude the preparation of the material. We are going to have a process which will work. I again make the plea to the Opposition to be patient. I will tell the Opposition about it, as I will tell the rest of the nation, and we will get a good result. Mr KENT —I ask the Minister for Foreign Affairs and Trade whether, following a question last Thursday by my colleague the honourable member for La Trobe, he now has further information concerning the killing of the Salvadorean lawyer and Human Rights Commissioner, Herbert Ernesto Anaya, in front of his children by the notorious death squads which are responsible for 50,000 killings in that small country? Will this brutal act interfere with Arias' peace plan for Central America? Mr HAYDEN —The murder of the particular civil rights activist to whom the honourable member referred, Herbert Ernesto Anaya, could easily cause problems in the process and efforts now under way to resolve the tensions and conflict in Central America, at least as far as El Salvador is concerned. This has set back the cause of reconciliation in El Salvador, or the processes related to that cause, quite seriously. It is presumed the assassins were members of a right wing death squad. The United States State Department has condemned the killing of Mr Anaya, saying that the incident had come after a dramatic decline in political violence. Since the honourable member's colleague raised this question last week I have had our Embassy in Mexico City take steps to make representations expressing our concern at the killing to the Salvadoran Foreign Ministry and also to express our hope that the perpetrators will be pursued and punished and that steps are being taken to protect other prominent human rights and opposition activists. Mr MILES —I refer the Minister for Aboriginal Affairs to his comments on 16 October when, in relation to the proposed treaty with Aborigines, the Minister said: We'll talk for as long as is necessary to get it right. Everyone, no matter how isolated will have an equal say. Since the proposed treaty is to be between Aboriginal and other Australians, will the Minister assure the House that the Government will consult with non-Aboriginal communities to the same extent as Aboriginal communities? Can the Minister provide a timeframe for these consultations, and can he assure the House that the Prime Minister's undertaking that there will be a commitment between Aboriginal and non-Aboriginal people by the end of 1987 will, in fact, be honoured? Mr HAND —When one gets an agreement between two parties one has to consult with both groups. So we will be doing that. I would have thought that the honourable member would have read the comments by prominent members of the Aboriginal community that they do not want to be rushed into any agreement. We acknowledge that; thus my comments that we will take as long as is necessary to get agreement. It will be difficult to have these discussions unless we in the Parliament are calm in the way we approach them. I again ask the shadow Minister, in all sincerity, to ask his Party to keep calm and to discuss the issue properly. Opposition members interjecting- Mr HAND —I remind the Leader of the Opposition that, in discussions with me, the shadow Minister has agreed to do that. He has agreed to undertake that sort of approach, as have other prominent members of his Party. I suggest that if we approach it in that way, we will be able to get an agreement of which we can all be proud-both Aboriginal and non-Aboriginal people. What we will be outlining in 1987 is a process to undertake those discussions, and that will be announced very shortly. Again, I ask the Opposition to wait. The Opposition will be consulted along the lines that I outlined to the shadow Minister. Mr CAMPBELL —Is the Minister for Land Transport and Infrastructure Support aware that Australian National Railways gets 92 per cent cost recovery on its freight operations across the Nullarbor and that road transport gives a very low level of cost recovery? Would the Minister support, therefore, the imposition of a toll on the Eyre Highway so that the dangerous conditions that exist on that road can be upgraded and so that there may be more money available for rural roads? Mr DUNCAN —I would not support a toll on that road. In general, it is not desirable to impose tolls on our national highway system. However, there may be exceptions to that. I am aware that certain parts of the Eyre Highway are not up to appropriate standards and are in need of additional maintenance. I have spoken to the Western Australian Minister about the need to ensure that a higher priority in expenditure on national highways in Western Australia is given to the Eyre Highway, particularly those sections near to the South Australian border. He has undertaken to look at the matter in the light of the finances that are available to the Western Australians. I make one additional point about the expenditure of national highway funds in Western Australia and that is that the original intention of the national highway program was to provide an adequate strip of bitumen around the nation. The only area at present which does not have a strip of bitumen is on the national highway system north of Perth where there is still about 100 kilometres of poor quality road. The Western Australians, quite appropriately, are giving high priority to the expenditure of funds to ensure that that section of highway can be completed to an adequate standard in the near future, hopefully by the end of 1988, which was the original intention under the national highways policy. Mrs SULLIVAN —The Minister for Land Transport and Infrastructure Support stated recently, when answering a question on timed charging of local telephone calls, that business users of Telecom Australia services `are not meeting a fair share of their costs'. Is the Minister aware that Telecom has allowed its sales check program-that is, the inspection of Telecom connections on business premises-to fall more than four years behind schedule because of its failure to appoint staff to 60 per cent of the positions this program requires? Is it not a fact that these inspections have revealed in the past that Telecom had been overcharging individual businesses in at least 60 per cent of cases? Does the Minister agree that these facts demonstrate that, far from not meeting a fair share of their costs, business users of Telecom are, in fact, being mercilessly ripped off? Mr DUNCAN —I am aware of recent Press reports which have suggested that that is the case. On 16 July Telecom wrote to the Australian Public Service Association. This particular matter and the Press reports of it, as I understand it, are part of an industrial campaign. Telecom wrote to the Australian Public Service Association advising that it intended to discontinue periodic sales checks-that is, the physical comparisons of customer facilities against the records of Telecom. In the past customers have not been able to verify the rental charges that have been shown on a telephone bill against the installed equipment. The introduction of a new automated billing system, however, will provide an immediate response to business customers who wish to verify particular information held by Telecom, to check whether it is correct and to enable a listing to be obtained of all equipment and of billing charges. Customers will then be able to verify the rental charges. The result, as I understand it, is that some positions in Telecom which were previously filled will no longer be required. That change in policy of Telecom will enable business customers to make a more efficient check on the accuracy of their telephone accounts. It is understandable that the Australian Public Service Association should be unhappy about that situation. But, overall, the position will change for the better as far as business customers are concerned. Dr KLUGMAN —The Minister for Foreign Affairs and Trade will recall that Australian and New Zealand scientists, some two or three years ago, found no evidence of any increase in radiation from the French underground nuclear tests at Mururoa Atoll, although they suggested some other problems. In view of the fact that the Minister usually takes a rational approach to issues, and is happy to expose and destroy mythologies, will the Government accept a reported new invitation from the French Government for Australian scientists again to check whether there is any increase in radiation, which the Australian media accepts as being produced by the French tests? Mr HAYDEN —The spirit of Michael Maher lives on. What that report pointed out, as I recall-and it is some years since I read it-was that there are potentially disturbing longer term consequences of the testing at Mururoa Atoll. In particular, as I recall it, there was an erosion or undermining of the coral atoll structure that over the longer term may pose serious hazards. That is sufficient for us to be concerned about the continuing nuclear testing program of France in the South Pacific. The problem that arose as a result of our participating in the last scientific specialist investigation of the Mururoa Atoll complex and the consequences of testing was that those people interested and involved in that matter seemed to report fairly widely in a most selective fashion. For instance, as the honourable member slipped into the error of doing a few minutes ago, they referred to the immediate findings of radioactivity testing but neglected to mention the longer term and much more serious consequences which are apprehended as being a direct result of this testing. In the circumstances, all our participation in another such scientific investigatory team is likely to bring about is confirmation of our earlier findings about the longer term consequences. But, at the same time, in no way will it discourage those who have some special pleading interest from selectively quoting from the report in their favour to deflect attention away from those longer term serious consequences. I am yet to be persuaded that it is desirable to be involved next time around. I am open to persuasion. I will look at the matter but at this point, although my mind is not closed, because of past experience it is not open a lot, either. Mr MILLAR —I refer the Minister for Community Services and Health to the Government's widely endorsed proposal to restructure nursing home arrangements under the Health and Allied Services Advisory Council, wherein nursing home admissions will be restricted to those people genuinely requiring nursing home care as distinct from hostel accommodation. As, hitherto, ordinary care has been calculated as requiring three hours per week registered nursing per patient and, in future, extra care under the new arrangements will require four hours, what assistance to nursing homes does the Government contemplate to accommodate the differential in this simple mathematical equation? Dr BLEWETT —As the honourable member is aware, the Government has introduced a new program for the organisation of care in nursing homes. I have to say that there is broad agreement in the nursing home industry, and in professional groups associated with it, that setting staffing levels based on that old system of ordinary and extensive care resident categories is not a satisfactory basis for providing for service needs. I think there is widespread agreement through the industry on that basis. At the moment a Commonwealth-State working party is trying to establish a new residential classification system-uniform national nursing and personal care staffing standards-which will achieve equity between States and between homes, which does not exist under current arrangements. Coming from Queensland, I am sure the honourable member recognises quite well that that equity does not exist between the States. It is proposed to commence the phasing in of the new classification system and staffing standards on 1 July 1988, following consultations with the relevant parties, including the industry bodies. Consultations at the State level have already occurred. The new system will be phased in over a five-year transitional period. Increases in staffing will be approved in the interim, where this is necessary, to comply with State minimum requirements. Recently I also agreed to amend the nursing homes financial arrangement principles, following concern being expressed by the nursing home industry itself, to enable nursing home fees to reflect the cost of employing additional staff hours after 1 July 1987 under the following two circumstances: firstly, to maintain the overall staff-resident ratio where occupancy rates increase or where the approved number of beds increases; or, secondly, where the additional hours employed were subject to departmental approval granted before 1 July 1987. There is no strong justification for continuing the discredited past practices of ad hoc increases in staffing levels in response to changes in extensive care ratios during the interim period. To do so would only create anomalous situations, introduce new uniform staffing standards and result in even further inequities between the States. Mr SCIACCA —I refer the Minister for Employment Services and Youth Affairs to the report on the national policy on languages presented to Parliament in May this year. What action is being taken to implement this policy? Mr HOLDING —There have been continuing discussions with representative leaders of the ethnic community, as well as extensive discussions with State authorities. I thank the honourable member for asking me this question. He will be well aware that in the allocation of Federal funds for this purpose we do not want to duplicate a number of resources that already exist within State structures. We hope to be in a position very shortly to make a full announcement in respect of all aspects of this program. Mr SHIPTON —I ask a question of the Minister for Aboriginal Affairs which is supplementary to the two questions asked earlier by the shadow Minister for Aboriginal affairs. In his answer to one of the questions asked by the shadow Minister, the Minister said he did not intend to announce bits and pieces of policy. I ask the Minister: Is the centrepiece of his program the establishment of a number of autonomous regional committees or councils throughout Australia to administer Aboriginal affairs policies in place of the existing Department and the Aboriginal Development Commission? Mr HAND —The details of the Aboriginal Affairs Commission will be announced at the appropriate time. Mr CLEELAND —My question is addressed to the Minister for Foreign Affairs and Trade. In view of recent civil disturbances reported in French Polynesia and in view of recent events in New Caledonia and Fiji, is the Government concerned at the further political instability occurring in the southern Pacific region? Mr HAYDEN —The developments referred to by the honourable member certainly create concern among the independent Pacific island states and unhelpfully add to tensions in the region. Although they are quite different in their nature, we have on a number of occasions put to the French directly and through the appropriate fora, such as the United Nations, the need for a wider range of options to be explored in relation to the future of New Caledonia. A widely based education program is needed in New Caledonia so that those voting on the options for the future will be fully informed of the range of possibilities to be pursued. There is no doubt that particularly Melanesian island states of the South Pacific identify in a close fraternal way with the Melanesian people of New Caledonia. The tensions we have seen there in recent times preceding the referendum and the reaction by Melanesians in New Caledonia to the nature of the referendum tend to externalise themselves and add to difficulties of accommodation for France with the island states of the South Pacific. Similarly, in the case of Polynesia, the reaction we witnessed there recently tends to intensify these sorts of concerns. It has to be recognised that there is a sense of fraternity between Polynesian states, as there is between Melanesian states. For greater comity in the region this has to be recognised and responded to appropriately. Mr GOODLUCK —I direct a question to the Minister for Consumer Affairs. Is the Minister aware that there is great concern throughout the community in Australia in relation to the price of petrol? It varies from week to week, and may I say that consumers are very upset about it. Will the Minister institute a parliamentary inquiry into the price of petrol-not an inquiry from the Senate, not from the Prices Surveillance Authority, but within the House of Representatives-into reasons why it varies so much from State to State, taking into consideration not State taxes but the pure and simple fact that the consumers of Australia are being taken to the cleaners each day? Mr STAPLES —The reason why petrol prices vary from State to State and from town to town is quite complex. This is probably a question that is better answered by the Minister for Resources. The Prices Surveillance Authority, which is the area in which I have particular responsibility, does monitor the wholesale price of petrol, and the various petroleum producers in Australia take their cases to it and the Prices Surveillance Authority refers the answer to us. So far as instituting an inquiry is concerned, it is not within my area of responsibility to do that. Mr WRIGHT —I direct my question to the Minister for Primary Industries and Energy. I refer to the concerns expressed by the United Graziers Association and the Cattlemen's Union that the impending free status for New South Wales, Victoria and South Australia under the brucellosis and tuberculosis eradication campaign (BTEC) program will seriously affect the cattle industry of Queensland because it means the closure of the New South Wales-Queensland border. How does the Minister respond to these claims and concerns? Mr PETER MORRIS —The Federal Government is not directly involved in the issue raised by the honourable member. We are not involved directly in what is effectively a border war between Queensland and the three southern States. Our involvement is through the national brucellosis and tuberculosis eradication campaign. The BTEC Committee considers that the three southern States have a right to progress their programs and initiate savings within their own organisations. The Commonwealth endorses this opinion. It is up to the States themselves to impose restrictions without the approval of the BTEC Committee. The easing of movement of beef between New South Wales, Victoria and South Australia and the savings counterbalance restrictions and costs imposed on the movement of cattle from Queensland into the State of New South Wales. Mr HOWARD —I preface my question to the Deputy Prime Minister by reminding him that on 23 September the Prime Minister told the House that the recent New South Wales Budget was `appropriate' to the circumstances. The Deputy Prime Minister will be aware that since this comment was made that Budget has attracted the lemon award from the Institute of Public Affairs for being the worst State Budget of the current year. I remind the Deputy Prime Minister that that particular report was compiled by a former head of the State Treasury of Western Australia. Given this and recent financial market developments, does the Deputy Prime Minister still share the view expressed by the Prime Minister on 23 September? Mr KEATING —Obviously the question was written for me, and given the fact that the Leader of the Opposition rarely asks any questions of me these days because he does not like the answers, I will give him another answer that he will not like. I should have thought that with the honourable member's fiscal record he would hardly be talking about the New South Wales State Government Budget when the last Budget he presided over had a blowout of $2 1/2 billion and gave us the largest fiscal imbalance in our history, an imbalance of 5 per cent of our gross domestic product, which it has taken this Government five years to pull back to zero. Let me also say in regard to the Institute of Public Affairs, which I think he quoted, using some very extravagant comment, that I remember when some of the principals of that body who were advising me were quite happy to take $150m off the States. They regarded that as a good outcome. The Government ended up taking substantial multiples of that amount from the States over the course of the last Budgetary year. The fact of the matter is that it was the last coalition Government that let the States get away with things in terms of their borrowings. It was the last coalition Government that opened the stable doors to the runaway in borrowings under the so-called infrastructure program, which the then Government thought up five years before the Loan Council program. Therefore, on both the outlays and the borrowings side there was no restraint on the States whatsoever. I answered a question in the House the other day by saying that I thought that the States were playing the game, as far as the Commonwealth was concerned. They have been operating to rein in some of their expenditure, and certainly their borrowings. We have reduced substantially Commonwealth direct payments to the States over the course of this financial year-a reduction which the States have absorbed. They have not recovered much of those payments in additional State taxes and charges. We are now reducing the net public sector borrowing requirement of the States by diminishing the cash balance of the States by having them comply with the borrowing limits which the Commonwealth proposes. The fact of the matter is that only under this Government have we been able to interest the States in complying with the Commonwealth Government's economic policy. One has to say that the States have been compliant in that task. However, in regard to their borrowings there is still some way to go. Those borrowings were inflated by that earlier period when we had the subsiding of the large electricity program and other programs. Some of the States' cash balance positions are still comparatively comfortable. However, the fact of the matter is, in terms of the requirements of the Commonwealth and what we have asked of the States, that the States have complied-particularly the State of New South Wales. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General) —For the information of honourable members, I present the annual report of the Companies and Securities Law Review Committee for 1986-87. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General) —Pursuant to section 25 of the Australian Bicentennial Authority Act 1980, I present, on behalf of the Prime Minister, the annual report and financial statements of the Australian Bicentennial Authority, together with the Auditor-General's report for 1986-87. Mr WILLIS(Gellibrand-Minister for Industrial Relations) —Pursuant to section 31 of the Steel Industry Authority Act 1983, I present the annual report of the Steel Industry Authority for 1986-87. Mr DUNCAN(Makin-Minister for Land Transport and Infrastructure Support) —For the information of honourable members, I present the annual report and financial statements of Aussat Pty Ltd, together with the Auditor-General's report, for 1986-87. Mr DUNCAN(Makin-Minister for Land Transport and Infrastructure Support) —Pursuant to section 10 of the Inter-State Commission Act 1975, I present the Inter-State Commission's report on the Review of Federal Registration Charges for Interstate Vehicles. Madam SPEAKER —I desire to inform the House that the Address-in-Reply, agreed to by the House on 24 September 1987, will be presented to His Excellency the Governor-General at Government House at 4 p.m. on Thursday, 5 November 1987. I shall be glad if the mover and seconder, together with other honourable members, will accompany me to present the Address. The Clerk —Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers: To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth: We most strongly oppose the process of Food Irradiation by radioactive Cobalt 60 or any other radioactive substance. We oppose the introduction of regulations that will facilitate the food irradiation process by State Governments. We express our deep concern at this attempt to extend the use of radioactive substances and exposure of workers to radiation. We call on the Government to immediately ban the importation of radioactive Cobalt 60 or other radioactive substances and to immediately disallow the regulations that permit the irradiation of food here in Australia. by Mr Beale,Mr Halverson,Mr Jenkins,Mr Milton,Mr Saunderson and Mr Scott. 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 Cobb,Dr Harry Edwards,Mr Tuckey and Mr Webster. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of the Lyne Electorate respectfully showeth that: The Hawke Labor Government's ID card proposal is the most far reaching and intrusive piece of Australian Legislation ever, and that on all the evidence available it will not tackle in the most cost-effective manner tax and social security fraud. Your petitioners humbly pray that the House of Representatives in Parliament assembled, urge the Government to reject Labor's ID card proposal to prevent a gross waste of taxpayers' money and a significant infringement of civil liberties. And your petitioners, as in duty bound, will ever pray. by Mr Cowan. To the Honourable the Speaker and Members of the House of Representatives in 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 Andrew and Dr Blewett. 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. 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 are deeply concerned at the Labor government's inability to provide effective and efficient methods to combat tax and social security fraud without resorting to expensive, ineffective and authoritarian measures which are alien to the Australian way of life; That we call upon the Labor 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 Sharp and Mr Tuckey. 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 for CIA activity in countries throughout the world, much of which is connected with overthrowing other countries' 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 Mr Hollis,Mr Kent,Mr Milton and Mr Scott. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. This petition of undersigned citizens of Australia respectfully showeth that we strongly oppose the introduction of the `Australia Card' or any other form of National Identification Numbering System. We believe the introduction of a National Identification Numbering System is not only totally unnecessary but is a severe threat to our civil liberties and privacy. We condemn the Government's actions on this matter, particularly as no reasonable nor responsible justifications for the proposal have been forthcoming from the Government. We humbly pray that the House of Representatives in Parliament assembled, should reject any proposal for a National Identification Numbering System. by Mr Andrew,Mr Downer and Mr Porter. 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 experiments on human embryos. And your petitioners, as in duty bound, will ever pray. by Mr Blunt,Mr Ian Robinson and Mr Ruddock. To the Speaker and members of the House of Representatives in Parliament assembled, your humble petitioners showeth: 1. The proposed Australia Card will have a dramatic impact on the lives of all Australians. 2. Therefore your petitioners request a national referendum on the Australia Card Bill before the proposal is re-submitted to Parliament. As in duty bound your petitioners will ever pray. by Mr Ruddock,Mr Shipton and Dr Wooldridge. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That we consider the 2% discounting of Commonwealth Occupational Superannuation Scheme pension adjustments on 10 October 1986 to be a serious breach of trust by the Government. The Commonwealth has reneged on an established commitment as incorporated in Commonwealth legislation and benefit promise pensions are not being paid in full. In particular we resent the long-term effect of the discounting. The pension loss is compounded throughout the life of a pensioner and surviving dependants-into the 21st century for many. We consider this Government-induced penalty to be out of all proportion to the short-term ``extraordinary circumstances of the economy'' given as the reason for the discounting. Your petitioners therefore humbly pray that the Government: 1. limit the pension discounting effect of the Superannuation and Other Benefits Legislation Amendment Act 1986 to the period 10 October 1986 to 1 July 1987 so that pensions are restored to the 9 October 1986 level as a base for the 1987 pension adjustment; and 2. consult with organisations representing pensioners before changing the terms and conditions of Commonwealth Occupational Superannuation Schemes. And your petitioners, as in duty bound, will ever pray. by Mr Adermann and Mr McGauran. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia sheweth that whereas: 1. The present Australian national flag is not distinctively and uniquely Australian and is confused with other national flags. 2. The people of Australia have never had an opportunity to express their views on an appropriate Australian national flag in a referendum. 3. The present Australian national flag does not properly represent Australia as a sovereign, independent nation. 4. The present Australian national flag incorrectly proclaims Australia as a colony, homeland, protectorate, dominion or government department of Great Britain. 5. The first condition in the flag competition of 1901 required that the design should show Australia's loyalty to the British Empire. The British Empire no longer exists. 6. A public opinion poll held in 1984 using the Gallup method revealed that 52% of Australians surveyed wanted a competition for a new design for the Australian flag. 7. There is no inherent link between Australia proclaiming a unique and distinctive flag and the political issue of Australia moving to a republican form of government. 8. The adoption of a truly Australian national flag would serve as a focal point for Australia's bicentennial celebrations in 1988. Your petitioners therefore pray that your honourable House will: (a) Appoint a Committee of the Parliament with representatives from both Houses and all parties to invite and consider proposals for the design of a new Australian national flag, and (b) Require that Committee to make recommendations on the form of a minimum cost referendum in which the electors will be given the opportunity to vote for a flag from a selection of at least three designs, one of which will be the present Australian national flag. And your petitioners, as in duty bound, will ever pray. by Mr N.A. Brown and Mrs Kelly. 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 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, as in duty bound, will ever pray. by Mr Cobb and Mr Hunt. 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 Kent and Mr Ruddock. 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 John Brown. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We the undersigned citizens of Australia respectfully showeth: In respect of sole parents on the Supporting Parents Benefit or the Widows Pension, whose youngest (or only) child has turned 16 years old and who will lose their pension of benefit from September 3, 1987 regardless of whether that child is still at school. 1. It will be difficult for them to support a child at school, especially in years 11 and 12, on unemployment benefits. 2. It will be difficult for most of them to find employment due to their lack of work skills and the high unemployment rate. 3. It will be difficult for them to undertake a retraining programme as the Austudy rate is even lower than unemployment benefits. We believe that these sole parents should be able to retain their benefit or pension at least until all their children have finished their high school education. We call on the legislature to change the legislation to this effect. And your petitioners, as in duty bound, will ever pray. by Mr Robert Brown. 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: We advise that we stand against the Australia Card because of the following points: The Australia Card is an unacceptable infringement on the freedom and privacy that Australians have been able to take for granted for so long in our democratic society, The people of Australia should be properly informed of the facts before anything with such far reaching implications as this be brought in, We call for a referendum on the Australia Card before it is too late, There is no guarantee that the private information on the computers will remain confidential, The card will fail to control social security fraud and tax evasion, The government will have almost complete control over our lives, through the control of our money, There is no allowance made for the loss, theft or destruction of the card, The counterfeiting of cards has been completely ignored, The people have no real choice whether they take the card or not, as it is needed for most everyday activities, eg. jobs, banking, being admitted to hospital etc. and if not used can result in a $20,000 fine. Where's the democracy in that? We call on the Government to cease all efforts to enforce the Australia Card on our country immediately. And your petitioners, as in duty bound, will ever pray. by Mr Cobb. 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 the parliament it should be rejected because: We do not accept the concept of an ID card as necessary to control social security fraud or tax evasion, It would be an unwarranted infringement of individual privacy and our democratic society, in particular because it being required to work, operate a bank account, enter hospital or enter into any transaction, It would cause a further large and costly growth in the bureaucracy and burden on tax payers, It cannot be guaranteed that the aggregated private information would be not be misused for other purposes, The people of Australia should be fully informed and consulted in a referendum before legislation for any such change with such wide-ranging effect is considered, and We call upon the Government to cease immediately any endeavour to introduce this invasion upon our lives. And your petitioners, as in duty bound, will ever pray. by Mr Cobb. 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 to 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 peoples 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 Mrs Darling. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The petition of certain citizens of Australia shows: We object to the proposal of Telecom to charge for each three minutes of a local call, as we feel this would disadvantage the elderly and people who are unable to leave their homes. The telephone is often the only contact relatives can have to check on the safety and well-being of those they care for. The inordinate time span which elapses between connection to a business premises and speaking, as the caller holds the line or is transferred between departments, would also disadvantage subscribers who can ill afford it. Your petitioners therefore pray that Telecom abandons the proposal to time charge local telephone calls as we believe that the charges Telecom makes at the moment are quite adequate. by Mrs Darling. 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 strenuously object to the proposal that the Post Office at Gymea Bay be closed. The Post Office serves a community need and we would be seriously inconvenienced by having to travel to another centre for our postal requirements, or even to collect registered letters and parcels, cash Pension cheques and transact banking. Many of us are Pensioners and the cost of such travel would be an unnecessary imposition. The nearest Post Office is 2.3 kms away with no convenient transport. We maintain that the purposes of the Post Offices should be to serve the public for the variety of services they offer, and that they should not be closed merely to save money or help Australia Post make a profit. Your petitioners therefore humbly pray that the House should take all possible steps to prevent the closure of Gymea Bay Post Office. 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 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 respectively showeth: That we strenuously object to the proposed nomination of Wet Tropical Rainforests of North Queensland to the World Heritage List. The listing as a world Heritage of such a vast area including areas of State Forest scheduled for Timber Harvesting on a sustained yield basis, will have a detrimental effect on the Timber and Allied industries and on the citizens and economy of North Queensland. The listing as a World Heritage of such a vast area will inhibit the future development of North Queensland on a broad economic base. Your petitioners therefore humbly pray that the House should take all possible steps to prevent the listing of Wet Tropical Rainforests of North Queensland as a World Heritage. And your petitioners, as in duty bound, will ever pray. by Mr Katter. To the Speaker and Members of the House of Representatives in Parliament assembled. The 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. This cut has reduced the base for future adjustments. The Government has promised to restore the base as soon as economic circumstances permit. Having regard to the state of the economy as portrayed by members of the Government in recent months and the interaction between Social Security pensions and the above mentioned adjustment, your Petitioners most humbly pray that the House of Representatives, in Parliament assembled, should urge the Government to restore the pensions base for the calculation of future adjustments and that the restoration be effected in conjunction with the Social Security adjustments in November 1987. And your petitioners, as in duty bound, will ever pray. by Mrs Kelly. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We, your petitioners, humbly pray that Parliament in its wisdom will take no action to legislate for the Australia Card Bill, and your petitioners in duty bound, will ever pray. by Mr McVeigh. To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth that: The decision by the Department of Defence to close down the Macksville Sub-section of 41 Battalion, Australian Army Reserve, is of grave concern to the unit members and citizens of the surrounding districts. The decision to direct unit members to Coffs Harbour, some 60 km distant, would impose sufficient hardship to prevent many continuing in the reserve and be a major deterrent to potential members. Your petitioners humbly pray that the House of Representatives in Parliament assembled urge the Parliament to intervene to stop the proposed closure and sale of land at Wallace Street, Macksville, and initiate action to have a permanent Depot built on the Army's Macksville land. And your petitioners, as in duty bound, will ever pray. by Mr Nehl. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth that: Any proposal to abolish the Department of Veterans' Affairs gravely concern ex-servicemen, ex-servicewomen and their families, because they reneged 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: 1. We the undersigned are totally opposed to the introduction of a $2.00 fee on prescription drugs for pensioners; 2. The impact of such a fee will be particularly felt by the chronically ill elderly who will be faced with a $2.00 burden with the purchase of each Pharmaceutical Benefit Scheme drug; Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to ensure that prescription drugs continue to be provided to the pensioner population without the $2.00 fee on each prescription. And your petitioners, as in duty bound, will ever pray. by Mr Blunt. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Richmond electorate respectfully showeth that: The Hawke Labor Government's Industrial Relations Bill will increase industrial disputation, bankrupt companies, and give the union movement total and absolute power over the Australian community. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to reject Labor's Industrial Relations Bill to save Australia from the actions of militant unions and give our economy a chance of recovering. And your petitioners, as in duty bound, will ever pray. by Mr Blunt. To the Speaker of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of the Australian Capital Territory respectfully showeth: That the present stallholders of the Belconnen and Fyshwick Retail Markets have made an offer of $2 million to the governments for each of the markets, and although this matches the government's estimate of the markets worth, the offer has not been accepted. Failure of the stallholders to retain the markets could result in their sale to other commercial interests with the displacement of the present stallholders and increased costs being passed on to consumers. Your petitioners therefore pray that the present stallholders of the Belconnen and Fyshwick Markets should be given the first option on the sale of the markets. And your petitioners, in duty bound, will ever pray. by Mr Langmore. To the Honourable the Speaker and members of the House of Representatives assembled in Parliament: The petition of certain residents of the southern suburbs of Melbourne draws to the attention of the house that the Minister for Communications did in 1982 call for all interested parties to submit applications for the granting of community based broadcasting licences for local regional areas. Many groups and interested parties including groups in the Southern Suburbs of Melbourne conformed to the request. Six years later, Melbourne's southern suburbs are still awaiting finalization of the government's commitment to the issuing of such licences. Your petitioners therefore request that consideration be given to a higher priority for the licensing of a community based broadcasting station for the southern suburbs of Melbourne and for such consideration to be given before the year of Australia's Bicentenary (1988). by Mr Macphee. Petitions received. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Madam Speaker has received a letter from the honourable member for Braddon (Mr Miles) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The Government's betrayal of trust in failing to meet its promises to the Aboriginal people. 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 MILES(Braddon)(2.57) —I raise this matter of public importance because of my deep concern at the impact of the Hawke Government's failure to honour its commitments to the Aboriginal people. This matter of public importance focuses on trust, a fundamental aspect of any successful understanding between the indigenous people and the immigrant peoples of a modern day nation. Any fracturing of that trust fundamentally flaws any prospect that consultation may achieve a successful understanding. Yet to date this Government has done exactly this, it has betrayed the trust of the Aboriginal people on several key issues. Trust is not something that can be bought or sold, traded or bartered. Rather, it is a precious emotion which is fragile and in need of constant attention. I say to the Minister for Aboriginal Affairs (Mr Hand) in reference to the Opposition remaining calm on this issue that that does not mean, I must point out to him and to the Government, that we will not be unremitting in our pursuit of goals that we believe are in the best interests of Australians. We will be analytical and we will be probing on this matter. As the Government should be aware, racial attitudes run deep within people. It appears that the Government has not distinguished between handling industrial relations disputes and handling community relations. The Prime Minister (Mr Hawke) and his Government are yet to put the Australian Council of Trade Unions days behind them and to appreciate the sensitivities required in dealing with the relationship between Aborigines and other Australians. Whilst wild and outlandish ambit claims are the order of the day and raised expectations are part of the mood setting antics of some within the industrial relations club, community relationships are on a different plane. They are developed over years but can be broken by one mindless act. The Government's performance in Aboriginal affairs at best has been a lot of words and at worst a cheap political exercise of raising hopes. As the Minister has said, too much has been said for so long and there has not been enough action. The Minister may well fall back on the fact that the Government has increased spending in this area as evidence of the Government's bona fides. However, even though over $2.5 billion has been allocated to Aboriginal advancement in the past five years-that is $12,500 for every Aboriginal man, woman and child or $75,000 for a family of six-the simple, staggering and tragic fact is that not one of the recognised social indicators has shown any improvement. In fact, two or three key indicators have got dramatically worse. This is a timely reminder that Aboriginal advancement essentially is not a matter of expenditure. The Government may put up some other jargon to explain its failure to meet its promises, such as these well-worn and lame excuses, `Circumstances have changed', `Things do not stay static' or `Life is some great creative experience'. In circumstances that could not be reasonably foreseen, such excuses may be justified. But the needs and aspirations of Aborigines are well known. The fact is that the judgment of the Australian Labor Party (ALP) that grandiose solutions would meet Aboriginal needs has gone wrong in the past and is wrong now. Present indicators are that nothing has changed. The rhetoric of the past has been empty and barren. Does the House remember the 1983 resolution of the previous Minister for Aboriginal Affairs, the present Minister for Employment Services and Youth Affairs (Mr Holding), which raised the hopes of Aboriginal people, but which lapsed and now gathers dust in the Table Office? Does the House remember national land rights? The Government broke bipartisanship and introduced a confrontationist model, only to abandon it when the Western Australian Labor Government looked like being defeated. We have yet to appreciate the magnitude of the fallout from the national land rights debacle. The Minister for Employment, Education and Training (Mr Dawkins) identified one element of the fallout in his H. C. Coombs lecture, in which he said: The perceptions especially amongst Aboriginal leaders that there has been a lack of progress and an unwillingness on the part of Government to act, has had the . . . effect of fragmenting that leadership. One part of the Aboriginal leadership has now adopted a rigidly anti-static position, which undermines the chance of a constructive relationship between Government and Aborigines. It was out of a sense of despair, frustration and anger, engendered by the U-turn on national land rights, that largely created the reactionaries within the Aboriginal movement-reactionaries who have been spurred on by the Prime Minister's statement of 2 September that he would like to see a treaty signed by the end of 1987. Before we look in detail at the treaty proposal, let us turn to the Government's standing promises. Firstly, the Government, under the ALP platform, is committed to introducing a program to house all Aboriginal and Torres Strait Islanders in a period of six years to a standard acceptable to them and devised in consultation with them. When was that commitment made? That commitment that all Aboriginals would be housed to an acceptable standard within six years was made in 1983. Now, with less than two years to go, the Aboriginal Development Commission has estimated that the housing backlog has actually increased by 6 per cent since the Government came to power. Opposition members-How much? Mr MILES —If honourable members want to hear that again, I repeat that the backlog has increased by 6 per cent. The Government, instead of moving towards achieving its goals, instead of moving forward, is going backwards. To achieve the goal of meeting housing demand, it would need to spend $1.3 billion on housing in the next two years to meet its commitment to the Aboriginal people. Secondly, the ALP is committed to train enough Aborigines and Islanders as teachers to achieve the goal of at least 1,000 teachers by 1990. Assuming that the graduation rate amongst Aboriginal trainee teachers is similar to that of undergraduate students generally, there will be fewer than 800 Aborigines qualified to teach by 1990. Whilst projections fall well short of the Government's promises, the Government will not maintain the Abstudy special teacher training awards and there will be no new grants in 1988. The Government is unlikely to meet the commitment to achieve its goal of 1,000 teachers. The failure to meet expectations in such a vital area is a real blow to the hopes that many families had in gaining better schooling for their young people. Thirdly, the Government is committed to ensuring that, by next year, the proportion of Aborigines and Torres Strait Islanders employed by each Commonwealth department and statutory authority is at least equal to their proportion within the Australian population. Let us look at those figures: in 1986, whilst Aborigines represented 1.5 per cent of the population, they represented only 0.95 per cent of the Public Service. Can the Minister inform the Aboriginal people and this House whether this target will be met, or is it a case of just another hollow promise? That is besides the other promises which the Government has made to the Aboriginal people. The Government has said that by 1990 it will have put in place the essential services of water, electricity, sewerage and rubbish disposal to their communities. Of course, there was also the general commitment to all Australians that by 1990 no child will be living in poverty. When one recounts this sorry and checkered record, is it any wonder that many in the Aboriginal community now view any initiative by governments with a great degree of scepticism and mistrust? That is quite a different picture from that which existed when we left office in 1982-83. We condemn the Government for raising expectations far beyond what is achievable. We believe that, in so doing, the Government has put back what is achievable. By seeking to do the impossible, it has made the possible impossible-a political disaster. The coalition has a proud record in the area of Aboriginal affairs-not merely of making things achievable but of real achievements. In 1967, it set in train a series of measures that moved forward with an agenda that was measured, predictable and achievable. It did not raise false hopes. It was a coalition government which put to the people a referendum that, for the first time, recognised Aborigines as full members of the Australian community. It was a coalition government which appointed the first Minister for Aboriginal Affairs. It was as a member of the coalition that the first and the only Aboriginal member of the Federal Parliament was elected. It was a coalition government which established the National Aboriginal Conference. It was a coalition government which enacted land rights legislation for the Northern Territory. It was a coalition government which committed itself to a program of self-sufficiency and self-management for Aboriginals by establishing the Aboriginal Development Commission. It was a coalition government which held lengthy discussions on a makarrata, or a form of treaty, until it ran out of steam. Such an extensive list of achievements over a period of 12 years in government indicates the degree of commitment that the coalition has to addressing the needs of the Aboriginal community. Not only did it have a sensitive and a caring understanding of the situation; it also had the political competence to put in place measures of far-reaching consequence. Expectations were not raised beyond what was achievable. As a consequence, a great degree of mutual trust developed between the Aboriginal community and the coalition. It is this Government which has betrayed the trust of Aborigines and has adopted a partisan approach. It has increased the volatility of racial feelings by creating mirages for the Aboriginal people. I turn to the Government's latest escapade-the treaty. The way in which the treaty proposal was raised indicates the contempt for the consultative processes so often espoused by the Minister. In the latest edition of Land Rights News, the Minister said: I want to hear what your priorities are . . . then I'll be in a position to put forward views . . . Then I'll be in a position to talk about things like the Treaty and a Commission and a whole range of other issues. That statement was made in early August. Later that month, the Minister is quoted as saying: I've talked to a few people when the issue has come up, but only in a passing way. Yet only a week later the Prime Minister announced his treaty proposal. So much for consultation and for finding out the priorities of the Aboriginal people. So much for not making promises until one is sure that they can be delivered. The Minister broke his first commitment to the Aboriginal people to consult with them and to let them lay down their priorities. The Prime Minister was in a safari mood, making policy without due consideration. His insensitivity to the feelings and aspirations of many Aboriginal people for a treaty was shown to be all the more callous when later he told the Parliament that it was a considered statement. It is now nearly two months since the treaty was proposed and there has not been a peep or a squeak from the Government on what any treaty would include. Like Santa Claus, the Prime Minister was in a mood for giving, but it is abundantly clear that when Christmas comes the treaty document will not be ready and another promise will disappear into the never-never. The Government has again betrayed the trust of the Aboriginal people. I say to the Minister that we genuinely hope for a return to bipartisanship, but let the Minister be mindful that there is more to a bipartisan approach than the Government declaring its position, process or mechanism and then abusing the Opposition when it does not accept it. Let me make it quite clear that we on this side of the House are appalled that this Government uses the Aboriginal cause as a political football. In contrast, we will be vigorous advocates for well-planned and realistic programs for the Aboriginal people that do not raise expectations beyond what is achievable. I sincerely hope that the Minister will practice what he preaches and will be able to restrain himself and his Government from political grandstanding at the expense of the Aboriginal people. In conclusion, it is abundantly clear that this Government has failed the Aboriginal people in a most disgraceful way by breaching commitments to the 1983 resolution, the national land rights debacle and a whole series of other commitments as outlined in its platform. Father Frank Brennan, adviser to the Catholic Bishops on Aboriginal Affairs, has said so succinctly: The broken promises are the greatest breach of faith committed by any Government towards Aboriginal people since white settlement . . . their votes have been bought, they have been betrayed totally . . . Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. Mr HAND(Melbourne-Minister for Aboriginal Affairs)(3.12) —On behalf of the Govern- ment I welcome the opportunity to debate this matter. I hope to be able to address some of the points raised by the shadow Minister for Aboriginal Affairs, the honourable member for Braddon (Mr Miles). I go to the first point he raised, the question of trust. Trust is something that has to be earned. I am in the process of earning the trust of the Aboriginal people as I go around the country and have discussions with them, hopefully building on the degree of trust that I think I already have amongst some Aboriginal people based on my experience gained from serving on various committees of this Parliament. It is all very well to come in here and talk about consultation, and consultation is something in which I believe quite vigorously. We will be consulting on a range of issues and, in fact, all major issues, as I proceed in my role as Minister. To have meaningful consultation one has to develop a mechanism to enable that to happen. That is exactly what we are doing at this time. We are attempting to have dialogue with Aboriginal people about how we should go about discussing with them these very real and important issues. I do take note of what the shadow Minister said when he stressed the need for me to ensure that proper consultation takes place. I will be doing that. Also, as I said in Question Time, I will be announcing later this month or perhaps early in December all of the information regarding the consultations and all of the information regarding the new Aboriginal Affairs Commission. That will be done this year. The Aboriginal people will be given ample time to discuss what the Government proposes in regard to the Aboriginal Affairs Commission. We hope in the autumn session to proceed with that legislation. Rather than give out little bits of information about the Commission in a piecemeal way to satisfy the needs of this Parliament at this point, I think it is proper and polite, in terms of respect for the Aboriginal people, that I present this information by way of a package. The Opposition will be told in detail about what we are proposing for the Commission. The reason we are having a commission to look after Aboriginal affairs is quite simple. There are currently, I think, 21 Federal Government departments responsible in one form or another for matters relating to the Aboriginal community. If one goes to any State one finds, I think, a minimum of six departments handling Aboriginal affairs issues and expending money on behalf of that State. If we multiply those numbers, there are 70 to 90 Ministers and ministries dealing with Aboriginal communities. I have heard from people on the other side of the House-and I agree-that maybe the amount of money we are expending on Aboriginal affairs is not getting where it ought to. We are reviewing every single program. It is a very tedious and long process. What I am trying to establish whilst I am the Minister is a strategy, a plan, about how we proceed to better service the Aboriginal people. We have initiated a number of steps. We have set up, in reply to the request of Aboriginals, a royal commission into Aboriginal deaths in custody. Surely nobody in this House is critical of that action by the Government. We are meeting the demands of the Aboriginal people in regard to those deaths. We have appointed a commissioner and people to assist him. They are of excellent quality. That was a demand made by Aboriginals in the first week I was Minister. We complied with it very shortly afterwards. I have explained the restructuring of the Department and other portfolio areas. I believe that what we will announce-and this will be clear to everybody-will mean that for the first time Aboriginal people will be involved in how decisions are made; not merely consulted, with the people meeting them getting back on aeroplanes and flying away and the Aboriginals not hearing a response. For the first time Aboriginal people will be consulted and will be part of the decision-making process. That is one of the things they have asked for. Who better to judge how government programs affect Aboriginals than Aboriginals? No one-no group of experts-is better qualified than the Aboriginal people, in consultation with the government of the day and its Department of Aboriginal Affairs. I am sure that together we can improve things. The next announcement made concerned the treaty, compact, makarrata or arrangement. For a long time now I have been quite generous in my praise for Senator Chaney's role when he was Minister-not just since I became Minister-because Senator Chaney negotiated with Aboriginal people for a long time on a range of issues. I intend to follow that sort of pattern. I intend also to make a plea to the Opposition, at every chance I get-and I am sure that it will be taken up by the overwhelming majority of those opposite-for us to work together, as one, as a parliament, to try to rectify the wrongs of the past. We will enter into quite detailed discussions on the treaty or compact. Aboriginal spokespersons have said in recent weeks, `Hold on, Gerry; take your time. We are in no hurry. We want to get it right'. In view of those comments, it is proper that we get the right sort of formula in place to enable meaningful discussions. There is no solution in my hip pocket or in the hip pocket of the Prime Minister (Mr Hawke) that will be produced half way through 1988. That is not what we are about. What we are about is getting agreement between Aboriginal people and people who have come here over the last 200 years. We look forward to the support of those opposite. To do things properly, we have to give a lot of thought to the way we will consult each other to reach agreement. I make a plea to people to just give this a little bit of time. We will not be bulldozed into a quick-fix solution which will be a disaster. We will take our time and do it properly so that, at the end of those negotiations, everybody can live with the decision. The shadow Minister also said that this Government should consult people. Let me just say that that is exactly what I have been doing in my first 10 or 11 weeks. I have visited every State. In the course of those travels I have spoken to every relevant Minister, Labor or non-Labor, with the exception of the Tasmanian Minister-and I will try to do that next week-and I have discussed with those people a range of issues. I have met a very favourable response to the approach I am taking. I ask honourable members to cast their minds back to when recent amendments to the Northern Territory legislation were being put through this House. I was one of those who sat down with representatives of the land councils in the Northern Territory for four days. I recall that on the Sunday the meeting lasted 17 or 18 hours. The discussion went backwards and forwards. I am pleased to see in the gallery two very prominent members of the Northern Territory Aboriginal community: Pat Dobson, the Director of the Central Lands Council and Chairman of the Federation of Land Councils; and John Ah Kit, the Director of the Northern Land Council. Those people were at those discussions. I am prepared to sit at discussions with Aboriginal people or anybody else for as long as it takes to come to a solution. That may have something to do with my trade union background, to which the shadow Minister referred, but the only way in which to come to a proper decision is to sit down and discuss with people in great detail what they are after. That is what we will do on every single issue. Mr Miles —What about your other promises? Mr HAND —The shadow Minister will find that the promises I have made have been very limited in number, because I am not about to make any promises that I personally cannot deliver. The honourable member will find that out about me if he is prepared to wait. Since I have been Minister for Aboriginal Affairs, the Government has been taking things very quietly in terms of making promises. What I do promise is that I will not hand down any decision unless first there is proper discussion with Aboriginal people. Because of the approach I have taken with them, they know at times we will disagree; but at least they will have had their say and their views will have been taken on board. I have found also that when I say that sort of thing at meetings it is very well received. It is very well received when I say to meetings, `I do not come here with a bundle of goodies to hurl out today in order to escape with a pat on the back'. What I say is, `There are no promises. I am here to hear what you have to say'. That also seems to be very well received. That is the approach we are taking. I am reluctant to engage in the sort of exercise where we say, `You did this and we did that'. I shall try as best I can to avoid that situation. It seems to me that we ought not to dwell too much on the past with this issue. Just as the shadow Minister could throw a few stones at us, I can assure him that I could throw a few back. In all sincerity I believe that the shadow Minister and I have a unique opportunity to go forward together and convince our parties that perhaps now is the time to rethink the way in which we have approached things in the past decade. I remind the House that that approach has been adopted not just only in the past three or four years. State governments have adopted certain extreme attitudes which have not helped the situation. No one is guilt free. I will not apologise for those who I think are guilty of something. We as members of this place have a unique opportunity at this time to bring about a settlement of what is now being understood by the wider community as a terrible wrong. A terrible wrong has been committed against Aboriginal people in this country-not by us today or someone else yesterday or someone else 10 years ago; but collectively a wrong has been done and collectively we have the duty to fix it up. I could say to the honourable member, `Your mob did this five years ago or seven years ago and my Party did something under Whitlam or my Party did something else'. That would not solve one problem we face today. I could produce charts that show in real terms the explosion in expenditure by this Government compared with that of the Fraser Government. But I do not intend to seek leave to have that chart incorporated in Hansard because that would be a futile exercise. What we must do is sit down and examine all these issues. The shadow Minister for Aboriginal Affairs spoke about the Northern Territory. As the advertisement says, `They thought you'd never make it'. I went to the Northern Territory and asked the land councils, the graziers and the pastoralists individually whether they would attend a meeting to discuss excisions from stock routes and stock reserves. That is a very big issue in the Northern Territory. They all said that they would. We went back and commenced what will be a long process. People said that it could not be done, that they would not agree to meet. When we got them to agree to meet for those discussions, people said that they would storm out of the meeting halfway through the discussions, that some of them would get up and leave. Not one of the parties has left because I believe the movement that is taking place in the community is being felt by governments and by prominent people and they are now taking notice of the community movement. If one looks at what is happening in the community, one sees that church leaders, business leaders, trade unionists and individuals are speaking out. Letters are coming in to newspapers, to honourable members opposite and to me about doing something about the problem. In terms of expectations, I would hate it to be thought that I have entered into anything that has built great expectations for people. My feedback from the Aboriginal community is quite clear. They are saying they will go along with us on the treaty or the compact but they want time to discuss it and consider it. They want to sit down with me and with the rest of the Australian community and go through that discussion in a proper way. I would have thought that that is a very good approach those people are taking. It is an approach I would hope the National Party takes as well as the Liberal Party. Mr Miles —That is different from the Prime Minister. Mr HAND —The Prime Minister has said nothing different from what I am saying now. If one looks carefully at what he has said, one sees he talked about the occupation of this country for 40,000 years by Aboriginal people and the occupation and presence in this country of non-Aboriginal people for 200 years-200 years as against 40,000 years. If one takes that one step further, one sees that Aboriginal people have been equal in the eyes of the law for only 20 years. So for the first 180 years of our presence they had no rights. Honourable members would have to agree that as a race and as a group of people Aborigines have made magnificent gains in 20 years without a lot of help from us in some cases. They have done it. I believe we have to look at this issue calmly and rationally and we will achieve what I think will go down in history as a magnificent achievement. However, it can only be done when we work together. As I said before, this presents a unique opportunity for Parliament to end the point scoring and to get on with the job of trying to address in a rational way the problems we face and the terrible injustices that have been suffered by the Aboriginal people every day of their lives. I make that plea to the Opposition. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The Minister's time has expired. Mr SHIPTON(Higgins)(3.27) —The Hawke Labor Government has betrayed the trust of Aboriginal Australians. There is no doubt at all about that. In the administration of Aboriginal affairs in this nation today there is a total policy failure; a total policy breakdown. A total administrative breakdown threatens the delivery of effective services to Aboriginal people. In everything the Minister for Aboriginal Affairs (Mr Hand) said today about his administration he rejected the policies of the former Minister for Aboriginal Affairs, the honourable member for Melbourne Ports (Mr Holding). Today, in saying that it was the first time Aboriginal people will be really consulted, in speaking of his strategy to do better and his plea for time, he totally rejected the policies of the former Minister for Aboriginal Affairs and revealed to the nation and the House the deep split both as to policy and administration in the Government. While the Government is fighting amongst itself, the standard of living of Aboriginal people has declined at a greater rate than of Australians as a whole. The thoughtless, off the top of the head, September Alice Springs treaty statement by the Prime Minister (Mr Hawke) has created controversy, ill feeling and done great harm to the advancement of Aboriginal people. Apparently it was made without consultation with the Minister for Aboriginal Affairs. There was no mention of it in the policy speech and no mention of it in the election campaign. The Minister for Aboriginal Affairs and the Prime Minister then talked of a treaty, a compact or statement of understanding; again, there was no mention of it in the campaign or the policy speech. This statement has done great damage to the relations between the Aboriginal and non-Aboriginal people. As the 1988 bicentennial year rapidly approaches it must be clearly stated and recorded in this House that the Australian Labor Party is guilty of setting back the real cause and the real needs of Aboriginal people for at least a decade and perhaps a generation. The Australian Labor Party (ALP) has cynically abused and exploited Aboriginal Australians for narrow electoral purposes. Labor has betrayed the bipartisan polices of government and opposition of the Fraser years. The undelivered and never-achievable promise of uniform national land rights raised Aboriginal expectations but created fears and damaged race relations in the broader community. I can do no better than quote an independent authority who is no particular friend or enemy of Government or Opposition but a man who speaks for his beliefs: Father Frank Brennan has stated: The broken promises are the greatest breach of faith committed by any Government towards Aboriginal people since white settlement . . . Their votes have been bought, they have been betrayed totally . . . They are the words of the well-respected Father Frank Brennan. The ALP treated Aboriginal people as pawns and has engaged in a new form of patronisation. These years of Labor government are a tragedy for Aboriginal people and for race relations. Under the new Minister not only is there a massive policy failure; there is a failure of administration which has not hitherto been revealed in this House. It is probably the greatest administrative failure in any area of policy in the nation's history. It is the greatest ever policy failure between a Minister and his department. It is ironic that it occurs as we rapidly approach the Bicentenary. The Minister has said nothing and has made no policy statements or decisions. He has created mayhem and great uncertainty as to what is the Government's Aboriginal affairs policy. I have no pleasure in telling members of the Government of this unfolding and serious saga of policy failure, incompetence and maladministration. The Minister has surrounded himself with a coterie of naive officials who run around apparently with a licence to do whatever they wish. The Minister's office is the alternative department, wielding effective power and being in effect a second department creating chaos and uncertainty as these officers obviously attempt to administer a hidden agenda of the socialist Left faction of the Australian Labor Party. The Minister daily bypasses his department. Aboriginal affairs is now being run by a clique of people in his office. The Department is ignored. The Aboriginal Development Commission is bypassed. These ministerial officers deal directly with the unions, bypassing the Department in the serious area of industrial relations. They do the same in all matters of policy and administration. This is obviously the Socialist Left approach to the administration of Aboriginal affairs. Officials from the Minister's office interfere daily in the policy of the Department and the Commission. Communication between the Minister and the Department and the Minister and the Aboriginal Development Commission is at an all-time low. Morale in the Commission and the Department is non-existent. No one knows where he stands. There are 800 public servants in the Department-36 per cent of them Aboriginal-who sit in their offices waiting for the Minister, who today pleads in this House for time, to issue instructions and to tell them what is going on and what to do. They are waiting for leadership. They are waiting for direction. The Minister asks, the Minister pleads, for more time. This Government is in its third term. The Government does not know what it is doing. I say to the Minister: make decisions, act now. The Minister said in answer to a question I asked him earlier today that he would make decisions at an appropriate time. The Minister then said that he would make decisions and announce them later this year and that he would legislate in the autumn sitting of Parliament. The Minister does not know what he is doing. He has no strategy. He has no policy. In fact, it is revealed in the Budget Estimates that there has been no allocation of funds for a compact, a treaty or a new commission. It is a total failure of policy and administration. The Minister's comments today about the deferral make matters worse. I ask the Minister: `Tell us your plans for the treaty. What are your general policy guidelines? Tell us what is going on'. I can reveal that apparently the Minister has plans for a new Aboriginal Development Commission. He referred to it today. He referred to a new program-his approach and his package. I hear on the Canberra grapevine that the current package apparently involves 28 self-managing, autonomous regional councils which will be put in place throughout Australia to develop policy and to deliver programs. Apparently these 28 councils will have control over their own budgets and have their own secretaries and staff. They will be able to set their own agendas. I am announcing it for the Minister. They will be able to announce their own priorities. One can imagine the chaos that this proposal will create. I ask the Minister to tell us whether it is true that he proposes to have a separate compact or treaty or statement of understanding with each of these autonomous councils. Apparently, whilst there will be an umbrella, overall commission, the real power will rest in these 28 regional councils, which no doubt will be managed and organised by the socialist left. In addition, it is proposed that the Minister will have the power to direct the Commission, thus giving effective control to the Minister, the officials that surround him in the office and the autonomous regional councils-totally bypassing the Department of Aboriginal Affairs. I plead with the Minister-who has had the opportunity, which he failed to take up today-to tell us and the people of Australia his plans. He owes it to all Australians, Aboriginal and non-Aboriginal people, as we go to the Bicentenary at this time to tell us his intentions, because there is a total failure of Aboriginal policy as well as a total failure of administration. The Minister has pleaded for time. He says nothing; he does nothing. He creates greater chaos and confusion by pleading for more time. It is a cruel joke that, as we go to the Bicentennary, the Socialist Left is in charge of the administration of Aboriginal affairs in this country. It is tragic that Aboriginal affairs will be subject to the social engineering of the Socialist Left and that it will be the plaything of the Socialist Left. At a time when we should be going forward in our relationships with Aboriginal people in achieving a tolerant and harmonious society we are going backwards. We have failures of administration and policy. We should be looking at solving the real difficulties and problems of Aboriginal people-adequate water supplies, adequate health administration and policy, proper and appropriate education, proper welfare, proper housing, proper employment and training programs. There is no doubt not only that this Government has betrayed the trust of Aboriginal people but that this Government and this Minister have betrayed the trust of all Australians. Mr BLANCHARD(Moore)(3.37) —What an amazing performance from the honourable member for Higgins (Mr Shipton)! I am sure that the honourable member does not believe the words he spoke to this House. It was quite unbelievable. No wonder John Elliott wanted the seat of Higgins. Surely to goodness that was one of the worst performances heard in this House in the last five years. Mr Millar —Mr Deputy Speaker, I rise on a point of order. It is with some regret that I draw your attention to the fact that the Minister's advisers in the booth have an obligation to conduct themselves circumspectly. They have fallen far short of that requirement. I think that should be brought to your notice. Mr DEPUTY SPEAKER(Mr Leo McLeay) —If the officials in the booth are intruding on the area of the House, they should ensure that they do not do so. I call the honourable member for Moore. Mr BLANCHARD —As I was saying, it was a miserable performance that deserves to be condemned by all thinking people who are interested in Aboriginal affairs. One has to contrast the comments of the honourable member for Higgins with those of the honourable member for Braddon (Mr Miles). At least the shadow Minister in his comments showed a degree of moderation and some understanding of the problems. Those of us who are engaged in Aboriginal affairs know that there are a tremendous number of problems in this area. The Minister for Aboriginal Affairs (Mr Hand) in his remarks showed, I felt, a sense of statesmanship. His comments were moderate and his challenge to the Opposition for bipartisanship is one which I hope the shadow Minister and the Opposition will take up. The problems that abound in the area of Aboriginal affairs in this country are too important, too diverse and too complicated for this House to engage in empty rhetoric. However, this is what the Opposition is doing in the shape and form of the honourable member for Higgins. I enter this debate on the matter of public importance with, I hope, some knowledge of the issues involved as a result of my involvement, firstly as a member and then as Chairman, with the House of Representatives Standing Committee on Aboriginal Affairs. Mr O'Neil —A good chairman. Mr BLANCHARD —I thank the honourable member. I add that that Committee has attempted, with reasonable success, to take a bipartisan approach on a number of important issues referred to it by Ministers from both sides of politics. I had hoped to see that bipartisan approach emerge from the Opposition benches in more recent years. We must recall that the first shadow Minister for Aboriginal Affairs following the Hawke Labor Government's coming to power was the honourable member for Higgins. We must also recall that the honourable member for Higgins was the gentleman who caused the only riot that has occurred outside this House-a riot in which the police had to be called to restrain the honourable member for Higgins, to make sure that the riot did not proceed any further. So much for the honourable member for Higgins. I accept that it is the role of oppositions to criticise governments but that criticism should be constructive and relevant. Unfortunately, the matter presented to the House cannot be regarded as either constructive or relevant to the issues confronting Aboriginals in this country today. It is erroneous in content and does not attempt to be constructive or relevant. It fails to reveal what the Opposition's policy in this area is. This is an important point which must be made. We have had a lot of noise from the Opposition in this debate, but not one real word of constructive criticism or of what it would do. It is knock, knock, knock instead of construct, construct, construct. The matter of public importance states: The Government's betrayal of trust in failing to meet its promises to the Aboriginal people. This is nonsense and pure rhetoric and the Opposition knows it. The honourable member for Braddon made it clear that he recognises that there is racialism in this country and from my understanding of what he said it is quite clear that he is opposed to that. I think that honourable members on both sides of the House should be strongly opposed to racialism in this country, and that is all the more reason why there should be a bipartisan approach to the problems in this area. We have to counteract that latent, and sometimes less latent that I would like it to be, racialism that exists in this country. The Hawke Labor Government, with the co-operation of Aboriginal people, has made tremendous strides to advance the interests of Aboriginal people. Yet, because of the neglect of the past years-though I, like the Minister, am not in the process of saying that it is one side that is to blame and that we are the saints in this issue; both sides need to share that blame-Aboriginal people remain the most deprived and underprivileged of our people. Let us face it, more years will pass before Aboriginals are no longer living in conditions akin to those in the Third World. It behoves us all, Government and Opposition, to make sure that the neglect of the past is redressed as soon as possible. This can be done realistically if the Opposition is prepared to act in a spirit of bipartisanship. Within a climate of financial restraint, the Government increased spending on Aboriginal programs by nearly 8 per cent in real terms in the 1987-88 Budget. That is a significant increase. I take up the Minister's point that the money spent must be spent where it benefits Aboriginal people. I am pleased to learn that the Minister is proposing to examine carefully expenditure in all areas, to make sure that the money does go where it is needed, at the grass roots level. More importantly, the Government has embarked on significant new programs, for example on employment, women, law and justice, culture and language maintenance, while at the same time maintaining its priority areas-the very important areas of housing, community infrastructure, education, training and health. Next year, 1988, is the bicentennial year. No-one in this House can say that white settlement has not had an adverse affect on Aboriginal life and culture. Recently, I was at the launching of the film Link-up Diary, made by the Australian Institute of Aboriginal Studies. It deals with the work of an organisation in New South Wales which tries to link up or re-unite people who were taken away, as kids, from their families. This practice of taking kids away was common in Australia as late as the early 1960s. It was done at the behest of both State and church welfare organisations in order to protect the Aboriginal child, in a sense, from its heritage. Some 8,000 children were removed from their natural parents and relatives and the effect of the separation was that the children grew up not knowing who their parents were, not knowing whether they had brothers or sisters and not even knowing about their aboriginality. The Link-up organisation helps those people who were separated. The problems that abound in Aboriginal affairs are too important, too diverse and too complicated for the House to engage itself in empty rhetoric. I appeal to the Opposition-- Mr DEPUTY SPEAKER(Mr Leo McLeay) -Order! The honourable member's time has expired. The debate is concluded. Mr PETER MORRIS(Shortland-Minister for Resources)(3.48) —I move: (1) That all proposals for modification or variations of the plan of layout of the City of Canberra and its environs published in the Commonwealth of Australia Gazette on 19 November 1925, as previously modified or varied, be referred to the Standing Committee on Infrastructure and, when conferring with a similar committee of the Senate, the Committee shall inquire into and report on all such proposals. (2) That the Standing Committee on Infrastructure when inquiring into proposals for modification or variations of the plan of layout of the City of Canberra and its environs have power to consider and make use of the evidence and records of the Joint Committees on the Australian Capital Territory appointed during previous Parliaments. (3) That a message be sent to the Senate acquainting it of this resolution and requesting its concurrence. I understand that agreement has been reached between the Senate Committee on Infrastructure and the House of Representatives Committee on Infrastructure, in consultation with Parliamentary representatives from the Australian Capital Territory, for the development of a joint process to consider alterations to the plan for the City of Canberra in accordance with section 12 (a) of the Seat of Government (Administration) Acts. Accordingly, I commend the motion to honourable members. Question resolved in the affirmative. Consideration resumed from 29 October. Clause 1 agreed to. Remainder of Bill-by leave-taken as a whole. Mr LLOYD(Murray)(3.50) —by leave-I move: (1) Clause 4, page 4, line 19, at the end of the definition of ``equal employment opportunity program'' add ``, but not so as to permit or require any positive discrimination on the grounds of sex, marital status, race, religion, or on any other grounds''. (2) Clause 25, page 10, after proposed section 33 insert the following section: Object of equal employment opportunity program ``33aa. The object of the equal employment opportunity program developed under section 33 is to eliminate discrimination and promote equal opportunity and nothing in this Act shall be construed as permitting or requiring any positive discrimination on the grounds of sex, marital status, race, religion, or on any other grounds.''. The purpose of the two amendments is identical. They refer to equal employment opportunity, in the terms of the Government-affirmative action in the terms of the coalition parties-provisions in the meat and livestock legislation. Those provisions are similar to provisions in the wool industry legislation and we will consider similar provisions later this week in the wheat industry legislation. I shall refresh the memories of honourable members. The Bill states: ``Division 3-Equal Employment Opportunity Program Corporation to develop and implement equal employment opportunity program ``33. The Corporation shall develop and implement an equal employment opportunity program. Regard to be had to equal employment opportunity ``33a. The Corporation shall take whatever action is necessary to give effect to its equal employment opportunity program, and any person who exercises powers in relation to employment matters in the Corporation shall have regard to the program in exercising those powers. Action incompatible with merit principle not required ``33b. Nothing in this Division shall be taken to require action that is incompatible with the principle that employment matters should be dealt with on the basis of merit''. The two amendments I have moved would insert a new clause 33aa and in clause 4, page 4, line 19 at the end of the definition of equal employment opportunity program, add words to indicate that any equal employment opportunity program instituted by the Australian meat and livestock legislation is required by these amendments not to permit or require any positive discrimination on the grounds of sex, marital status, race, religion or on any other grounds. The reason for inserting those similarly worded amendments in the two specific areas of the legislation is to make the point very clearly that the Opposition parties, while agreeing with the principle of equal opportunity-that is, that there should be no discrimination against any person in this country on the basis of sex, race, religion, disability or whatever it may be-do not believe that there should be positive discrimination in the terminology that is used. That is, there should not be an affirmative action program which will require, in this case the Australian Meat and Live-stock Corporation, to employ people other than on the basis of the correct person being employed for the job without taking into account any sort of list, quota or any other criterion other than the one that should be there; that is, employing the best person for the job. It can be argued that proposed section 33b states that employment matters should be dealt with on the basis of merit. People may say that that should cover this situation. However, if one looks at dictionary definitions of `merit' one can see two quite contradictory interpretations of the word. One refers to the principle as we would understand merit; that is, the best person for the job would be employed irrespective of race, religion or whatever. The other definition of `merit' refers to `deserving of special consideration', which is completely in line with an affirmative action program. The paramount concern of the Australian Meat and Live-stock Corporation, on behalf of the livestock industries of this country, should be employing people who have skills with regard to knowledge of the industry, marketing or international negotiations-whatever it may be. Whoever is employed should be employed on the basis of ability to do the best job for the Meat and Live-stock Corporation. That is the reason I have moved the two amendments. Mrs SULLIVAN(Moncrieff)(3.56) —I rise to make my position clear. At the outset I indicate that I shall be voting for the Opposition amendments. I see no harm in voting for the amendments but I would like to make it very clear also that I am not convinced that the other Bills that have been before this Parliament that have included the merit clause have deserved the criticism that they have attracted. It is my opinion that proposed section 33b would have covered the situation, as it is my opinion that the so-called merit clause in the Sex Discrimination Bill, Affirmative Action (Equal Employment Opportunity for Women) Bill and the Equal Employment Opportunity (Commonwealth Authorities) Bill that we had before us recently relating to statutory corporations did in fact preserve the principle that there be no positive discrimination in favour of people in their line of employment, whether it be on sex, marital status, race, religion or any other ground. When these Bills have been matters of moment there has been quite some public debate about the dictionary's definition of `merit'. So I thought perhaps there was something about this word that I needed to know. I have consulted the Oxford English Dictionary, the unabridged version, to see just what the definition of `merit' is. People have consulted the dictionary and have claimed that the definition given in the Oxford English Dictionary led them to have some concern about whether the merit clause in these other Bills, as they have been debated, did give the protection that was sought, the protection that is sought today by the Opposition amendments. I want to read into the record just what the Oxford English Dictionary says about this. The first definition of `merit' is: That which is deserved or has been earned, whether good or evil. Mr Chairman, I suggest that that definition does not indicate any scope at all for positive discrimination. The second definition listed reads: The condition or fact of deserving; `character with respect to desert of either good or evil'. It notes in italics that that usage of the word `merit' is now rare; so it is not the normal usage. I fear that it may be that definition that people have focused on without reading further what the dictionary's comment is on it. Further on the Oxford English Dictionary says: the merit (of a case, question, etc.)- which I think certainly applies in this case because we are looking at the application of a number of Acts of this Parliament on the subject of discrimination- chiefly in Law, the intrinsic `rights and wrongs' of the matter, in contradistinction to extraneous points . . . Hence, to discuss, judge (a proposal, etc.) on its merits, i.e., without regard to anything but its intrinsic excellences or defects. So even in the strictest legalistic application of the word `merit'-it is, after all, appearing in a law here-then the fear, I believe, would be met. The problem, I think, comes from the third definition. I would like to suggest that those who depend on this definition are in fact taking it right away from this Bill and the other Bills. The third definition is, `The quality of deserving well, or of being entitled to reward or gratitude'. It is that usage-the idea of deserving something because one has done pretty well, not that one gets it absolutely on the basis of intrinsic merits or intrinsic qualities-that has led people astray. I suggest to the Committee that that is an entirely inappropriate application of this definition, if that is the one that is being depended on, because the dictionary makes clear the circumstances in which that word `merit' is used, and they are irrelevant in this case. It is now being said about the place, along the corridors and, I guess, elsewhere, that the previous affirmative action and equal employment opportunity Bills are being applied in a way that amounts to positive discrimination. Mr Rocher —Hear, hear! Mrs SULLIVAN —I hear the words `hear hear' from at least one of my colleagues. Mrs Kelly —Not the one behind you, I think. He is more enlightened than that. Mrs SULLIVAN —No, my colleague from Western Australia. I am interested that he should say that. I have heard it said that it is being applied in that way. If that is so, if there are people in the Public Service who are applying previous actions of this Parliament in that way, it is my opinion that they are breaking the law. The Sex Discrimination Act provides that there shall be no discrimination on the basis of sex or marital status. Those are two of the points raised in the Opposition's amendment. If somebody uses his position to discriminate in a way that is in favour of-let us face it-women, he is breaking the law by contravening the Sex Discrimination Act. In that case I think the matter ought to be brought into the open. I believe that people who think that that has happened to them should take the appropriate action that is provided under the Sex Discrimination Act. They are, of course, presently entitled to take certain action, if they are public servants, in relation to the Public Service. I am not aware that those allegations have been backed by actions, but it may be that they have not been brought to my attention. Nevertheless, I reiterate that I think it is time that they were brought into the open so that we can make an assessment of whether some people are breaking the laws of this Parliament in their application of affirmative action programs. I emphasise that I have no evidence of this, and nobody has made an allegation to me in specific terms. I do, however, hear the allegation in very general terms. I am told, `Oh, Kathy, but they are applying the EEO Bill as positive discrimination'. If that is so, I am very concerned. I briefly reiterate that the amendments that have been moved by the Opposition are unexceptional, but I have risen to make it clear that, in supporting the amendments, I am not contradicting the stance I have taken regarding three Bills that were previously before this Parliament. I am satisfied that the merit clauses in all of those Bills, this one and the ones that will follow, cover the situation. In supporting the amendments I do not move away from my support for the merit clauses in the previous legislation. Mr HAWKER(Wannon)(4.04) —I, too, would like to talk briefly about these amendments to the Australian Meat and Live-stock Industry Legislation Amendment Bill 1987 moved by the honourable member for Murray (Mr Lloyd). I do not see any great problem with them, and I would not have thought that the Government would have any great problem with them. All that they do is to put, beyond any doubt, what is supposedly intended in the previous Bills that have related to this matter-the equal employment opportunity legislation, et cetera. The honourable member for Moncrieff (Mrs Sullivan) has raised a very interesting question that has caused some concern to some people of whether positive discrimination is being practised in certain parts of the Public Service. I support the view of the honourable member for Moncrieff that, if that is the case, it ought to be brought into the open and dealt with accordingly, because if it is occurring, it is quite obviously a breaking of the law. I return to the point of these amendments. If there is any doubt, or any grey area, these amendments would clear it up so that the objectives that were supposed to be contained in previous Bills relating to equal employment opportunity and the objectives for which the Government states it was aiming, would be covered beyond all reasonable doubt. For that reason, I am very happy to support these amendments because I believe they clear up and leave in no doubt what the proper approach to equal employment opportunity should be. Mrs KELLY(Canberra-Minister for Defence Science and Personnel)(4.06) —The Government does not support these amendments, simply on the ground that it does not think they are necessary. In fact, the honourable member for Moncrieff (Mrs Sullivan) made a pretty good case as to why there are not necessary. In regard to the point that was just raised about whether there is positive discrimination in favour of women in the Public Service, the honourable member for Moncrieff said she would like to know about it. I would, too, but I would also like to know whether there is positive discrimination against women. It is a very fine line and it is an issue that has been addressed in many of the pieces of legislation which deal with equal employment programs. The view of the Government is that the issues have been covered quite well by the clauses that are already contained in the legislation. This Government does have a program of providing equal opportunities, but it does not set quotas, nor does it believe in positive discrimination in favour of women. As I said, it is a fine line and it is often very difficult to define. But one clause that overrides all the others in this legislation is the commitment to merit. We have had this debate many times in this Parliament. The proposed new section 33b states: Nothing in this Division shall be taken to require action that is incompatible with the principle that employment matters should be dealt with on the basis of merit. We can summarise the Government's position by saying that the merit principle is critical to employment practices throughout both the private sector, we believe, and also the public sector. But it is important that, in regard to that merit principle, we give women equal opportunities. That is what this Government has attempted to do, not only in legislation, but also in practice, with the many and various programs that it has implemented-particularly as an employer in the Public Service. The Government has a very fine record in giving women sufficient training opportunities and an educational background to give them the opportunity to compete with men. I think that is critical. I am probably more concerned about the discrimination that has existed against women over the years. Even though we do not now have a program of positive discrimination, there are many more cases in which there has been positive discrimination against women, rather than for women. I must say that, as Minister for Defence Science and Personnel, I am very proud of the way that we have handled an increase in women's participation in many areas of the Defence Force. Even though we do not have women in combat-related areas, we have considerably increased the numbers of jobs that are open to women. I think frankly, that that is the way to go. One must increase women's opportunities by opening job opportunities for them and giving them the appropriate training. Without that training and without these programs that the Government has been pushing throughout the Public Service, women would not have the chance to compete on a competitive basis. That is the basis of this legislation. It would not be possible to make a fair assessment of many women's capabilities without the sort of training that this Government has initiated. I am very proud of the balanced perspective that we have in dealing with women's employment. I feel that the legislation, as it is, is suitable to pursue that very fine line, in giving women an opportunity but, at the same time, not discriminating against males. Question put: That the amendments (Mr Lloyd's) be agreed to. The Committee divided. (The Deputy Chairman-Mr P. C. Millar) Ayes . . . . . . . . . . . 56 Noes . . . . . . . . . . . 75 —— Majority . . . . . . . . . 19 —— Adermann, A. E. Lloyd, B.Aldred, K. J. McArthur, F. S.Andrew, J. N. (Teller) McGauran, P. J.Beale, J. H. MacKellar, M. J. R.Blunt, C. W. McVeigh, D. T.Braithwaite, R. A. Macphee, I. M.Brown, N. A. Miles, C. G.Cadman, A. G. Moore, J. C.Cameron, Ewen Nehl, G. B.Cameron, Ian Peacock, A. S.Carlton, J. J. Porter, J. R.Cobb, M. R. Prosser, G. D.Cowan, D. B. Reith, P. K.Dobie, J. D. M. Rocher, P. M.Downer, A. J. G. Ruddock, P. M.Edwards, Harry Shack, P. D.Fife, W. C. Sharp, J. R.Fischer, Tim Shipton, R. F.Fisher, Peter Sinclair, I. McC.Goodluck, B. J. Smith, W. L.Hall, Steele Spender, J. M.Halverson, R. G. Sullivan, K. J.Hawker, D. P. M. Tuckey, C. W.Hewson, J. R. Webster, A. P.Hicks, N. J. (Teller) White, P. N. D.Hunt, R. J. D. Wilson, I. B. C.Jull, D. F. Woods, R. L.Katter, R. C. Wooldridge, M. R. L. Baldwin, P. J. Johns, G. T.Beazley, K. C. Kelly, R. J.Beddall, D. P. Kent, L.Bilney, G. N. Kerin, J. C.Blanchard, C. A. Kerr, D. J. C.Blewett, N. Klugman, R. E.Brown, Robert Lamb, A. H. (Teller)Brumby, J. M. Lavarch, M. H.Campbell, G. Lee, M. J.Charles, D. E. Lindsay, E. J.Charlesworth, R. I. McHugh, J.Cleeland, P. R. McLeay, LeoCourtice, B. W. Martin, S. P.Crawford, M. C. Mildren, J. B.Cunningham, B. T. (Teller) Milton, P.Darling, E. E. Morris, AllanDawkins, J. S. Morris, PeterDubois, S. C. Mountford, J. G.Duffy, M. J. O'Keefe, N. P.Duncan, P. O'Neil, L. R. T.Edwards, Ronald Price, L. R. S.Fatin, W. F. Punch, G. F.Fitzgibbon, E. J. Saunderson, J.Free, R. V. Scholes, G. G. D.Gayler, J. Sciacca, C.Gear, G. Scott, J. L.Gorman, R. N. J. Simmons, D. W.Grace, E. L. Snow, J. H.Griffiths, A. G. Snowdon, W. E.Hand, G. L. Staples, P. R.Hayden, W. G. Theophanous, A. C.Holding, A. C. Tickner, R. E.Hollis, C. Uren, T.Howe, B. L. West, S. J.Humphreys, B. C. Willis, R.Hurford, C. J. Wright, K. W.Jakobsen, C. A. Young, M. J.Jenkins, C. A. Burr, M. A. Jones, BarryCameron, Donald Brown, John Question so resolved in the negative. Remainder of Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Mrs Kelly)-by leave-read a third time. Debate resumed from 7 October, on motion by Mr Kerin: That the Bill be now read a second time. Mr LLOYD(Murray)(4.18) —I have an amendment of which I gave notice during the general debate last Thursday night and which my colleague the honourable member for Parkes (Mr Cobb) will second. I move: That all words after `That' be omitted with a view to substituting the following words: `whilst not opposing the Bill, the House is of the opinion that the Government: (1) in honouring its policy of meeting 50% of the cost of export inspection charges, should include in this cost sharing policy the additional export inspection charges required of the meat industry to meet the chemical residue requirements of importing countries; and (2) should sympathetically consider requests from the industry for assistance with any special and additional export costs imposed on the industry by the chemical residue issue'. I will refer briefly to the reasons why the Opposition parties strongly support the amendment and will require a division to be called on it. Firstly, I indicate the displeasure of the livestock industries of this country at this Government's broken commitment, once again. This Government, by way of policy, meets 50 per cent of the export inspection charges of a whole range of commodities. As stated in the last election campaign, the policy of the Liberal and National Party coalition is to meet 100 per cent of the cost of export inspection charges because it is in the national interest to have our exports facilitated. It is not an appropriate charge to be placed on individual producers. However, this Government's policy is to meet 50 per cent of those charges. The industry responded magnificently to the chemical residue problem, a threat to one of our great export industries, yet this Government did not automatically honour the additional export inspection charge by meeting 50 per cent of the cost, as it should to be consistent with its own policy. The residue tests are a necessary requirement for exports. They will cost the cattle industry alone this year about $35m. That 50 per cent-a saving of $17m-should automatically have been met by the Government. It is to this Government's great dishonour and discredit that it has not adhered to its policy. In addition to that particular cost, there will be some other costs involved for the industry. I believe it appropriate for a Federal government to meet these costs. I acknowledge that it is appropriate for State governments to provide assistance to an industry which is beset by a great additional cost and great problems. Therefore, the second part of the amendment stands. I can think of a number of instances where some products may have to be brought back from countries to which they were exported. The testing regime now required for that meat is no longer cost beneficial and the appropriate way of handling the problem is for that meat to come back. There are other questions concerning the forms of support for individual properties. Over 340 properties are now quarantined. Although it is not mentioned in this amendment, the Government has broken another promise to the cattle industry. It concerns the national residue survey which has been in place for some years and for which the Government covers the cost. A range of commodities is tested to ensure that the food eaten in this country is free of residue. This Government has now imposed a 50 per cent requirement not on all the commodities covered by the national residue survey but just on the meat section. The public health responsibility of this Government is to ensure that the foods eaten are wholesome and free of excess residues. It has always been accepted by government that every aspect of public health requirements is met by government, but the meat industry is now being forced to pay costs to the tune of 50 per cent. That means that, in addition to the $17m or $18m which this Government is reneging on, another $3m is being forced on the industry through the sudden imposition of this new tax. That is just what it is-an additional tax on an industry that is down. That industry is already committing itself this year to many millions of dollars-approximately $70m to $75m-to ensure that its product is pure, that it is the best in the world, that it is promoted, and that it is and will remain one of the great export industries of this country. Mr Cobb —I second the amendment. Mr HAWKER(Wannon)(4.25) —I would like to speak briefly in support of the amendment moved by the honourable member for Murray (Mr Lloyd). It is to the eternal shame of this Government that it has not seen fit to take up the cost of this residue testing. The livestock industry is entirely blameless over this whole matter, yet it has been saddled with a very large Bill. I think the honourable member for Murray mentioned a figure of about $20m or more which is additional to the cost of the ordinary meat inspection testing for export. This is quite a large sum of money for any industry to find. It comes back to a point of principle. The principle is whether or not we should have a tax on exports. When we are facing such a desperate balance of trade problem and when we have such an enormous overseas debt, I would have thought that the first thing that the Government ought to be doing is looking at ways and means of encouraging people to export more and to increase the value of those exports. Yet the Government is again putting an additional tax on these exports, thereby curtailing the chance for them to expand at the rate at which they should be able to expand. There is no doubt that there is considerable scope for an increase in those exports if the opportunities could be raised and if the industry was not being saddled with additional costs. The honourable member for Murray mentioned the national residue survey, which has been in place for some years. I would like to draw the attention of honourable members to question No. 330, which I put on notice last week, asking the Government to give a few facts on this matter. I am very curious to know what has been going on all these years and how it is that suddenly-or supposedly suddenly-the Americans found residue in our beef. I would like to know how this was not noted before and, in particular, whether it was noted but nothing was done about it. There are many questions that need answering. The Government ought to be moving pretty quickly to get those answers. If there is some slackness in one of its departments it ought to straighten it up quickly. I return to the question of who should be paying this cost. If it is found that the Department of Primary Industries and Energy has been acting properly, there is still an onus on the Government to take up this cost and also to look at the question of the 300-odd farms that have been quarantined, many for reasons beyond the owners' control. I cite the example of someone who had electricity poles running through his paddocks. The poles were being treated with the chemical aldrin and, because the cattle came in contact with those poles and picked up the chemical residue, that farmer has found that his whole property has been quarantined at considerable expense. It could work out to be a very large expense. It is an expense that the farmer is being penalised for unreasonably. It is something the Government ought to be looking at very sympathetically. That is part of the amendment that has been moved by the honourable member for Murray. It is important that the Government look at these points that have been raised and in particular at the amendment, because this is a very significant matter. It is something that has caused considerable heartache in the industry and it is something of which I suspect the industry has been the innocent victim. Mr COWAN(Lyne)(4.28) —I support the amendment that has been moved by the honourable member for Murray (Mr Lloyd). This matter concerns me because I represent quite a number of people-average graziers-who run small farms. I have an appreciation of the overall scene in Australia. I am very mindful of the Opposition's policy on inspections, which has been very well outlined by the honourable member for Murray. The Minister for Primary Industries and Energy (Mr Kerin) has stated on many occasions in this House and elsewhere that the Government accepts the fact that today the primary industries are in a reasonably prosperous condition and that therefore they should be self-supporting in their own right. It is all right to have a policy along those lines, but Mr Deputy Speaker, you and I know, and I am sure all honourable members of this Parliament know, that if Australia's economy gets too low it will be the primary industries that will assist the country to survive. We could well reach that stage within a year. We on this side, particularly those of us in the National Party of Australia, believe that we owe it to the primary producer to support him wherever and whenever we can when a certain problem arises. The honourable member for Murray broadly outlined the policy and said, `If we are returned to government, we will give 100 per cent support'. As the honourable member for Wannon (Mr Hawker) pointed out, there are farmers and graziers who are severely disadvantaged because, through no fault of their own, their properties have been quarantined. When farmers sell stock at the market and residue is found, the farmers are not compensated. I am a farmer, in a very small way, and my neighbours on either side have been quarantined. One was quarantined because he sold a calf and residue was found in its body. I know that no fertilisers or chemicals of any kind have been used on that property for many years. The previous owner grew maize and did not even use superphosphate, because the land was good enough to grow the crops without it. My neighbour says-and the stock inspector might agree-that the reason for the residue is that he sprayed the outside of his home for spiders. So minimal things that we think will not affect us have a very great bearing on our lives. Many dairy farmers throughout New South Wales and elsewhere have purchased grain from the western parts of New South Wales. Many of their farms have been quarantined because of the residue in the milk the cows are turning out. If they were to sell their beasts, the residue might be found in the fat thereof. So there is a great effect upon the farmer. If insecticides that leave residues have been used on a property, this can be picked up after a very long period of time. The residue might be in the grass, in the dirt, or even in the hay or grain-the product of the farm. The residues can be distributed very quickly around the whole length and breadth of Australia depending on the feed that graziers and farmers are using. I point out that any farmer can be subject to this problem, and if he is he will not be able to sell the beasts that have been reared on his property. Of course, a farmer on an affected property cannot sell stock he has purchased either. During the second reading debate it has been pointed out in the House that the State departments of agriculture have encouraged farmers to use insecticides-and rightly so. I have used them for years because we have been advised to do so. We appeal to the Government because there is a very strong reason why the effect of this problem on the farmers should not be accepted solely by them, and the honourable member for Murray has moved an amendment to that effect. In this legislation the Government, as it has done in the past, agrees to subsidise only 50 per cent of inspection fees for export. But this is a specific problem. Land owners who have residues through no fault of their own are being charged and have to foot the bill not only for the loss of the beast but also for the property being out of production for months, or even years, when the farmers are unable to sell any of their stock. This is very serious for many of our farmers. Farmers have said to me, `Bruce, all the governments have supported the steel industry; they have supported other manufactured goods that we export from Australia. Why can't the Government meet this problem and assist the people who have been penalised?' That is why I appeal to the Government to consider the amendment that has been moved by the honourable member for Murray. There is a misconception in the minds of Government members if they believe that the primary industries of Australia are really prosperous. Suppose a grazier wants to make a living off his land and he has 150 breeders or about 250 steers. I am sure that the honourable member for Gwydir (Mr Hunt) would agree that that would be a relatively small property, but it could possibly be self-supporting. A property to carry that stock would cost between $400,000 and $450,000. That money is tied up in real estate, stock and plant. The grazier would be lucky to get a gross return of $30,000 to $35,000 a year. By the time that person pays his rates, insurance and ongoing costs on the farm, there is very little left compared with the investment he has outlaid. That is why I always like to put up as strong a fight as I can for the producer. He has made the outlay because he loves the land and loves to live there but, so importantly, he also keeps Australia going so far as exports and the balance of trade are concerned. That is why I support the amendment moved by the honourable member for Murray. Mr HUNT(Gwydir)(4.36) —I support the amendment moved by the Deputy Leader of the National Party of Australia, the honourable member for Murray (Mr Lloyd), on behalf of the Opposition. I am surprised that the Government has not responded sympathetically to the requests of the Cattle Council of Australia and other sectors of the Australian cattle industry for the assistance that really should be extended to this very important export industry. I am particularly surprised that the appeal of the industry has gone without any positive response from the Government. The cattle industry is one of the least protected industries in Australia. As I said a short while ago, and as the honourable member for Lyne (Mr Cowan) said, it is a very important export industry. Over the years it has established very reliable markets, particularly in the United States and Japan as well as in some other important countries. The residue problem, as the honourable member for Lyne has just said, is one for which responsibility does not go back in every case to the cattle producer. On the north coast of New Sout Wales and in coastal areas of Queensland, many people have purchased properties where chemicals have been used in the past-and today those properties are quarantined. It is grossly unfair that these people should be treated any differently from other sectors of the industry that are getting assistance; for example, under the brucellosis and tuberculosis testing arrangements. The industry, Commonwealth and State governments have made contributions to ensure that our export meat is free of those diseases. It is quite inconsistent to treat this issue differently. The reason the industry and the Government have been most concerned about the issue, of course, is that they do not want to lose the important markets in the United States. As the honourable member for Wannon (Mr Hawker) pointed out, it is amazing that, in spite of the testing processes conducted by government authorities over the years, this problem was not identified until only a few months ago. The honourable member for Wannon quite rightly has listed on the Notice Paper a number of questions to ascertain why this issue should have come to the fore at this time when we have been doing spot testing over a period of years. The honourable member for Lyne made the point-and it is worth repeating-that, in the steel industry, Australia's number one company, the Broken Hill Proprietary Co. Ltd, has been on the receiving end of a considerable amount of Commonwealth Government or taxpayer assistance. The big Australian is to be assisted to the extent of up to $500m over a five-year period, and the multinational motor industry will be assisted to the tune of up to $300m, while one of our least assisted industries, having some difficulties in some regions on specific properties, is now being asked to meet the cost of testing and inspections. The honourable member for Murray eloquently stated that he could not for one moment understand why the Government is not honouring its policy of meeting 50 per cent of the cost of export inspection charges, particularly when those charges surely must be part and parcel of the export inspection service. The Government has been remiss and totally unsympathetic at a time when the industry surely should have been extended some sympathy and at a time when the industry has been labouring under incredible cost pressures in this country. To my knowledge, no other beef producing country has experienced in recent years interest rates as high as those obtaining in Australia. We in this country have had sustained record high interest rates. The Government has chosen to continue to tax petrol and fuel to a considerable extent, and that has added to the cost of transportation. Of course, inflation in this country has been three to four times higher than that of most of our competitors on the export market. The honourable member for Murray has endeavoured at least to do some justice and service to this important export industry at a very critical time. I appeal to the Government to reconsider its position and at least provide some assistance to this industry to help it overcome a cost burden that it can barely afford. Mrs KELLY(Canberra-Minister for Defence Science and Personnel)(4.42) —I do not intend to say very much, except that I listened with interest and some sympathy to the views expressed by members of the National Party of Australia. The Government is not prepared to accept the amendment moved by the honourable member for Murray (Mr Lloyd). The Government feels that it is already providing considerable financial assistance to the industry and it is not prepared to introduce what would probably be an open cheque policy in that regard. It has already provided considerable assistance in the form of $7m to the market innovation scheme and the payment of 50 per cent of export inspection costs, as well as providing the usual tax concessions to primary producers. The Government has already agreed to make available $10m under the integrated action plan. We have some sympathy for those who encounter the quarantine problems outlined by members of the National Party. I appreciated their comments in that regard. I shall advise the responsible Minister of their concerns. Unfortunately, the Government cannot support the amendment. Question put: That the words proposed to be omitted (Mr Lloyd's amendment) stand part of the question. The House divided. (Mr Deputy Speaker-Mr J. G. Mountford) Ayes . . . . . . . . . . . 75 Noes . . . . . . . . . . . 58 —— Majority . . . . . . . . . 17 —— Baldwin, P. J. Jenkins, H. A.Beazley, K. C. Johns, G. T.Beddall, D. P. Kelly, R. J.Bilney, G. N. Kent, L.Blanchard, C. A. Kerin, J. C.Blewett, N. Kerr, D. J. C.Bowen, Lionel Klugman, R. E.Brown, Robert Lamb, A. H. (Teller)Brumby, J. M. Lavarch, M. H.Campbell, G. Lee, M. J.Charles, D. E. Lindsay, E. J.Charlesworth, R. I. McHugh, J.Cleeland, P. R. McLeay, LeoCourtice, B. W. Martin, S. P.Crawford, M. C. Mildren, J. B.Cunningham, B. T. (Teller) Milton, P.Darling, E. E. Morris, AllanDawkins, J. S. Morris, PeterDubois, S. C. O'Keefe, N. P.Duffy, M. J. O'Neil, L. R. T.Duncan, P. Price, L. R. S.Edwards, Ronald Punch, G. F.Fatin, W. F. Saunderson, J.Fitzgibbon, E. J. Scholes, G. G. D.Free, R. V. Sciacca, C.Gayler, J. Scott, J. L.Gear, G. Simmons, D. W.Gorman, R. N. J. Snow, J. H.Grace, E. L. Snowdon, W. E.Griffiths, A. G. Staples, P. R.Hand, G. L. Theophanous, A. C.Hayden, W. G. Tickner, R. E.Holding, A. C. Uren, T.Hollis, C. West, S. J.Howe, B. L. Willis, R.Humphreys, B. C. Wright, K. W.Hurford, C. J. Young, M. J.Jakobsen, C. A. Alderman, A. E. Katter, R. C.Aldred, K. J. Lloyd, B.Andrew, J. N. (Teller) McArthur, F. S.Beale, J. H. McGauran, P. J.Blunt, C. W. MacKellar, M. J. R.Braithwaite, R. A. McVeigh, D. T.Brown, N. A. Macphee, I. M.Cadman, A. G. Miles, C. G.Cameron, Donald Millar, P. C.Cameron, Ewen Moore, J. C.Cameron, Ian Nehl, G. B.Carlton, J. J. Peacock, A. S.Cobb, M. R. Porter, J. R.Connolly, D. M. Prosser, G. D.Cowan, D. B. Reith, P. K.Dobie, J. D. M. Rocher, A. C.Downer, A. J. G. Ruddock, P. M.Edwards, Harry Shack, P. D.Fife, W. C. Sharp, J. R.Fischer, Tim Shipton, R. F.Fisher, Peter Sinclair, I. McC.Goodluck, B. J. Smith, W. L.Hall, Steele Spender, J. M.Halverson, R. G. Sullivan, K. J.Hawker, D. P. M. Tuckey, C. W.Hewson, J. R. White, P. N. D.Hicks, N. J. (Teller) Wilson, I. B. C.Hunt, R. J. D. Woods, R. L.Jull, D. F. Wooldridge, M. R. L. Jones, Barry Burr, M. A.Brown, John Webster, A. P. Question so resolved in the affirmative. Amendment negatived. Original question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mrs Kelly) read a third time. Consideration resumed from 7 October, on motion by Mr Kerin: 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 Mrs Kelly) read a third time. Consideration resumed from 7 October, on motion by Mr Kerin: 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 Mrs Kelly) read a third time. Consideration resumed from 7 October, on motion by Mr Kerin: 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 Mrs Kelly) read a third time. Bill received from the Senate, and read a first time. Ordered that the second reading be made an order of the day for the next sitting. 7 Bill received from the Senate, and read a first time. Ordered that the second reading be made an order of the day for the next sitting. Debate resumed from 21 October, on motion by Mr Kerin: That the Bill be now read a second time. Mr DEPUTY SPEAKER(Mr Mountford) —I understand it is the wish of the House to debate the Petroleum Resource Rent Tax Assessment Bill concurrently with the Petroleum Resource Rent Tax Bill, the Petroleum Resource Rent Tax (Interest on Underpayments) Bill and the Petroleum Resource Rent Tax (Miscellaneous Provisions) Bill. There being no objection, the Chair will allow that course to be followed. Mr SINCLAIR(New England-Leader of the National Party of Australia)(4.55) —This package is a re-run of the debate that was undertaken in this House some months ago. The legislation gives vent to Australian Labor Party spleen developed way back in 1977 when, for the first time, the Labor Party adopted as policy the suggestion that what it saw as the excess profits of the oil industry justified additional taxation. In July 1984 Senator Peter Walsh made a statement which identified the fact that legislation would be introduced and earlier this year such a package was introduced into the House. The delay in introduction is something everyone needs to have in his mind. This is 1987; the concept began in 1977 and the 10 years between the proposal and its final implementation are such that the character and nature of oil exploration around Australia has changed fundamentally. There is little doubt that, if one has a look at the industry today and realises not only how the price regime has changed but how profitability has changed and how in so many ways the industry now sees itself better placed by acquiring existing exploration rights from abroad instead of exploring within Australia, one can understand the degree to which this legislation is out of date. We are debating four pieces of legislation, not just the Petroleum Resource Rent Tax Assessment Bill. The Petroleum Resource Rent Tax Assessment Bill 1987, the Petroleum Resource Rent Tax Bill 1987, the Petroleum Resource Rent Tax (Interest on Underpayments) Bill 1987 and the Petroleum Resource Rent Tax (Miscellaneous Provisions) Bill 1987 as a package all add yet another and a not insignificant tax burden, not just on those who are exploring for oil but on everyone in the Australian community. Indeed, I intend to put to this House that one of the fundamental reasons why honourable members on this side of the House intend to oppose this legislation and show that it does not meet even the stated objectives of the Government is that there is little doubt that it adds yet another inequitable part of a tax package on a sector of the industry which, as a result of this legislation, in some instances, we call on to be paying 69c in the dollar by way of taxation. In other words, it has not just come as a piece of taxation on its own. It comes from the attitude of a Labor Party that says profits are something it generally does not like and within the petroleum exploration industry there have been, particularly in circumstances I shall describe in a moment, windfall profits and therefore there was justification for introducing this virtual excess profits tax. The concepts of 1977 will apply a 69c in the dollar taxation burden on those who are subject to it. Mr Smith —Terrible. Mr SINCLAIR —As my colleague says, that is terrible. I looked at the speech of the Minister for Primary Industries and Energy (Mr Kerin) to see whether he provided any justification for this legislation. Even though on the last occasion we debated oil the Minister did not seem to know very much about it, I hope by now he does. If he does, it certainly does not come through in his second reading speech. He states merely that in contrast to production based secondary tax regimes, the petroleum resource rent tax (RRT) will be payable only in respect of projects earning a high rate of return on outlays, particularly in light of the current volatility of world oil prices. Thus, the resource rent tax system offers considerable benefits to the petroleum industry. If that is the basis of the logic for this piece of legislation, I suggest to the Minister and his Government that they ought to look at it again because neither in the application nor in the consequences of this tax are they going to facilitate off-shore petroleum exploration. Indeed, I suggest to him that it does not offer any benefit to the petroleum industry, but quite the reverse. I think the second thing we need to realise is that, as far as additional taxation is concerned, while it is true back in the mid-1970s, when the tax was first conceived, there were, particularly as a result of the development of the Bass Strait field, very significant profits coming to some companies, this tax now comes on top of all those other taxes which already are burdens on the industry. It is not just on top of company tax, but it comes, of course, in addition to royalties, fringe benefits tax and capital gains tax. Certainly those companies involved in the industry are liable to companies tax, royalties, fringe benefits tax and capital gains tax. It is true that there is to be some reduction in excise on production resource rent royalty. However, State royalties, where applicable, are applicable generally to the industry. The proposed new resource rent tax is to take the place of the excise on royalties only in some off-shore areas. The other tax burdens are there and are applied. The fact that the Minister for Primary Industries and Energy says that this proposed tax is not in addition to other taxes shows part of the problem applying to the whole industry. The Minister does not understand the industry. The only time he spoke on this subject in the House, he demonstrated how inept and incompetent he is. It is about time we got a Minister who does know and who cares a bit about this very important, productive sector of Australian industry. As far as the general burdens of taxation are concerned, it is also of interest to note that while it is true that the Organisation of Petroleum Exporting Countries, when it first came into the field, set very significant increases in oil prices, the general character of the OPEC- induced increase in oil price has changed significantly since the early 1970s. There is no doubt that the price OPEC countries applied, which was not as a result of market forces but rather as a consequence of their seeing their ability to create quite major increases in income for themselves, resulted in windfall profits for the industry. It is of interest that at that stage oil prices, in particular Saudi Arabian light crude, were in excess of $US30 a barrel. The latest figures I have show that oil is now $US17.40 a barrel. Of course, the basis for comparison is significantly different. Indeed, I am told that in real terms the price of oil approximates the price it held in about 1973. A rise to at least $US22 a barrel is needed before it would equate to the price charged between 1975 and 1979. Therefore, at $17.40 a barrel, it is significantly below that price regime. The result is that there is quite a significant difference in revenue now received by the oil industry. That is a difference at which I suggest the Minister's attention should be directed when he is assessing the consequence of the resource rent tax. Indeed, it is of interest to note that while in other countries there was, at the time of the OPEC-induced increase, an acceptance that there should be a proportion of the extra income generated accruing directly to government, there has now been a recognition that present circumstances have changed and countries such as Canada, the United States and the United Kingdom have all made concessions to the industry, reflecting the change in pricing conditions. However, that is not happening in Australia; indeed, quite the reverse is happening. Here we have a climate in which the Government is increasing the taxes paid by industry at a time when the price regime does not justify this. Indeed, we should understand that today the consequences are amplified by the changing climate within the stock markets which add further uncertainty to the oil industry. The consequences of the world oil price fall indeed have been quite significant in the way in which they affect one of the important elements in determining the extent to which there is oil exploration. This is what is called producer realisation. I am told that producer realisation is defined as the price the producer receives for oil produced, less the costs of exploring for it and extracting it. In this instance of producer realisation, the Government not only is introducing a new tax but also is not even allowing reasonable expenses incurred in the identification and the extraction of oil. Indeed, we have heard from the industry about the problems in the infrastructures which are necessary to find oil. We have heard that in the definitions of the exemptions to be allowed from the formula in determining the resource rent tax liability there are very marked restraints. Indeed, the areas within the permit lines which are set are such that, if a company explores outside that particular permit area, it is not allowed deductions from its RRT. Of course, the prospective areas in which the proposed tax is to apply largely are in the Browse Basin and the Arafura Sea, up in the north-west of Western Australia, and in the Otway Basin in the south-west of Victoria and to the west of Tasmania and the western end of Bass Strait. There are quite a number of permit areas there. I am told that the geological basin is fairly extensive but that the knowledge of the resources is fairly sparse. The Government is applying this tax in circumstances where it is not taking into account what we would see as the reasonable level of expenses involved before the RRT is determined. This is quite apart from the consequences that apply from the fall in oil prices themselves. I revert briefly to the consequences of the drop in oil prices because that is another part of the important factor of producer realisation. The effect of the collapse has been to reduce commercially recoverable crude oil reserves. As the price goes down, some of those reserves are no longer capable of being extracted profitably. Secondly, it has reduced the number of exploration prospects which have a positive expected monetary value. As the value goes down, so the capability of extracting oil is also changed. In some instances it has more than halved company cash flows. In other words, companies' ability to fund additional expenditure is reduced. Of course, the very significant reduction in equity capital on the stock market for high risk exploration has further affected the ability of companies to continue exploration. Of course, what it has done above all else is to make acquisition of reserves through takeovers and mergers more attractive than exploration itself. That is occurring not only within Australia but also in relation to investments outside Australia. I would like to mention that again in a moment. Exploration activity is sensitive to the crude oil price. Under an RRT regime, the exploration decision is sensitive both to the resource rent tax rate threshold and to the crude oil price. With a proposed resource rent tax on 40 per cent, very few high risk exploration prospects will be capable of proceeding or are likely to proceed. Indeed, they are likely to be most unattractive. If we think that the exploration sensitivity is such that it is not likely to be affected by oil price falls, all we need to do is to look at the recent experience of the Broken Hill Proprietary Co. Ltd in 1986 when it shut in production because that production had become uneconomic. We need to understand that marginal producer realisation has already dropped to its lowest level in 10 years. Exports certainly have been reduced. The Minister certainly needs to register the fact that the changed economic climate very significantly affects that producers realisation. Also, it is affected by oil prices and certainly it is affected by the tax regime. Our concern is that on both those grounds the general level of producer realisation is significant lower than it should be. However, the other aspect in determining exploration is very much affected by what is called prospectivity. It would seem that generally, on all the detail I have been able to find, Australia's prospectivity is considered low. We have large geological basins and an unsophisticated, relatively undeveloped geological data base. In terms of world oil resources and cumulative production, Australia compares very badly. Indeed, all one need to do is look at the figures produced in the United States Geological Survey in 1985. In a chart prepared by Charles D. Masters it can be seen that there is little doubt that in regard to the estimated undiscovered crude oil reserves, Australia is assessed as the second lowest, with countries such as the Union of Soviet Socialist Republics with 42.4 per cent undiscovered crude oil, Mexico at 36 per cent, the Arabian-Iranian Gulf only third at 31 per cent and Australia the second lowest at 1.8 per cent, ranking only above the Suez-Sinai at 1.6 per cent. In terms of our looking at prospective crude oil reserves, our geological base is already low; and to that the Government is adding this additional impost, which in this present economic climate one can categorise only as showing remarkable little foresight and demonstrating yet again the sad fact that the Government is hide-bound by its philosophy of the past and is not capable of assessing the conditions as they apply presently in the market-place. Mr Cobb —It would have a wealth tax. Mr SINCLAIR —Yes, it would; my colleague is right. Brian Griffith, the general manager of petroleum exploration of the Broken Hill Proprietary Co. Ltd, in a recent speech to the Australian Institute of Mining and Metallurgy, said: In assessing Australia's prospectivity, it is perhaps relevant that in the past thirty years or so, only some four billion barrels of oil have been discovered in the country, and the great bulk of this volume was discovered in a relatively short period of time in one very small area of the Gippsland Basin. In the face of statistics such as this it is perhaps not surprising that the undiscovered oil resource base of Australia has been assessed at a relatively low level. In other words, we have a low prospectivity and a high tax base and another tax burden cannot be justified. It is on that basis, above all others, that we on this side of the House regard the Government's timing in introducing this measure as particularly unfortunate. Of course, there are other factors. I want to turn to some of them because I am quite sure that the Government's assessment and understanding of the situation are also based on a misconception of Australia's self-sufficiency. On the last occasion on which the House debated this matter the Minister said not to worry about the available resources in Australia because the worries would be solved by the considerable potential of the North West Shelf. I only hope that the Minister has caught up with the statistics that have become available since the last time he spoke, because every figure that I have been able to find suggests that there is a significant prospective shortfall in available oil in Australia, and we should recognise not only the consequences, in terms of available raw material, but the significant difficulties that there will be economically. I want to talk about a few of those matters for a few minutes because the Minister does not seem to understand the consequences of them. The first thing that we need to know about self-sufficiency in oil is that it is a very important part of the circumstances of our balance of payments. The extent to which we are able to avoid the high cost of importing oil has, of course, a benefit to this country. Yet the Bureau of Mineral Resources (BMR) has suggested in recent figures that by 1992-93 the gap between supply and demand, to be met by imports, could be as much as 320,000 barrels per day. In other words, considering the 1987 dollar rate-and that is pretty uncertain at the moment-a broad assessment of what that 320,000 barrels a day of imports should represent is about $3 billion a year. If that is the assessment for 1992-93, which is only five years off, obviously that is a significant economic cost to this country. The price of oil is expected to rise and it could be that not only will the dollar fall but the price of oil will rise. The further assessment of the BMR is that, by about the year 2000, we shall be needing somewhere between 390,000 and 400,000 barrels a day and the cost of that is likely to be about $4.5 billion. Whatever the figure is, the cost to Australia of additional imports will be very significant. There is no doubt, in all the studies that I have seen, that the present rate of new exploration, on-shore and off-shore, the rate of new discoveries and the cost of the replacement of that oil by imports are such that Australia will be in a difficult financial position unless something is done. Of course, it is true that there are alternatives to oil as an energy source. However, at this stage none of them are as economically attractive as oil itself. In this country, there has been talk of ethanol production-from sugar and from grain-and shale oil, and there has been a search for other energy resources from the sun, the wind, the waves and so on. All of those have some part to play, but in the short term it is foolish for us to think that any of them will be able to make up that significant shortfall between the oil found in Australia and the extent to which we have to import significant quantities. That will have quite a dramatic effect on our overall ability to fund our present standard of living. Of course, oil found overseas will not help Australia's prospects for self-sufficiency. What has happened in recent times is that, because of the general lack of prospectivity and in part because of the economic circumstances, there has been quite a move by a range of companies to source their oil needs from overseas. Only last week, we saw BHP Petroleum announce that it had spent $570m to acquire a 49.9 per cent interest in Hamilton Oil. The interesting thing about Hamilton Oil is that it has 93 per cent of its oil and gas reserves in the North Sea. The same can be said of quite a number of other companies. For example, I am told that the Australian Petroleum Exploration Association Ltd (APEA) has estimated that Australian companies have spent more than $100m in acquiring overseas exploration acreage and a further $60m in exploration activity in other countries in the past 12 months. That means that Australian activity is spread through the Philippines, New Zealand, Papua New Guinea, North and South America, Indonesia and, of course, the North Sea. When one contrasts not only the higher prospectivity but the direct tax incentives that are available for exploration elsewhere, one understands why companies are going off-shore. None of that does anything for Australian self-sufficiency. Honourable members will recall that the Victorian Government has prepared an analysis of the general circumstances and the consequences of the general decline in self-sufficiency. If we look at those, we find that there is little doubt that the impact is very severe indeed. It is estimated that the oil decline will have an $8 billion to $9 billion impact on the balance of trade between the years 1995 and 1996. The belief in the analysis is that gross domestic product will fall by $1.559 billion and that public sector borrowing will need to increase to cover the loss of excise revenue. In addition, it is suggested that employment will fall by 22,000, the brunt being felt in Victoria itself. We should be concerned with not just the direct consequence of those exploring, but also the indirect consequences. Similar studies conducted not very far away by the South Australian Government show something of the impact there. If one has a look at the overall effect, one sees that the impact of the fall-off in the exploration activity on a whole range of activities in South Australia is quite serious. A study by Flinders University in 1986 showed that $1m spent on-shore by the industry generated 20 indirect jobs. In this case, with the resource rent tax, we are dealing with off-shore expenditure. The off-shore expenditure, nonetheless, has similar flow-on effects and the implications for Australia are that we badly need to maintain the level of activity and do nothing to reduce the interest and concern felt by all of us on this side of the House. We believe that this particular measure is a direct detriment to Australian companies wishing to invest in oil exploration in the off-shore area, where it is said that there is greater prospectivity than there is on-shore around Australia. The inescapable conclusion to be drawn from the way in which the resource rent tax is structured is that it is a disincentive, that it is not truly profits-based and that it is a tax that will further discourage companies from spending money around Australia-all at a time when there is a need for greater exploration activity and when there is certainly a need for us to be conscious of the economic and employment consequences of failing to encourage exploration in our off-shore areas. The Australian Petroleum Exploration Association Ltd has assessed that only one in 15 off-shore wells proves viable. There is a significant disadvantage when one takes into account that each well costs between $5m and $7m to drill and that the direct result of this tax legislation will add significantly to the cost of those off-shore wells as the cost of not all of them will be deductible and permissible expenditure under the resource rent tax formula the way the lines have been drawn. Of course, the other problem is that in taking a decision to explore companies basically seek to find a large field. This is what impels them. Companies do not explore if they expect to find only a small field. It has been felt that the better chance of finding large fields is off-shore from Australia. There are usually small prospects of a small find; the prospects of a large find are very small indeed. The one-off finding of the Bass Strait field certainly should not be taken as a precedent but we need to recognise that with RRT having its largest effect, approaching 40 per cent, on large finds, it can be expected that many previous decisions to explore made viable by the possibility of a large find are likely to be no longer viable. Therefore, if there is no prospect of finding large fields, self-sufficiency levels will further decline. Indeed, the whole problem is that in many marginal discoveries there is a significant downside risk in development and producers need to be assured of a reasonable risk loading rate of return before committing development. With less likelihood of large finds, with the added downside risk in development contributed to by the RRT, it is very problematical that there is an adequate level of return to offset the risk. I am afraid I see the whole concept as developed by the Government as totally unsatisfactory. It is disappointing that the Government has not changed its attitude even in the light of the recent market downturn. Only nine wells were drilled in Australia's off-shore oil search in the first nine months of 1987. There have been only two wildcat wells-I am told that the chance of oil discovery in wildcat wells is only about 2 per cent-and one appraisal well completed in the third quarter of this year. In that climate one cannot say that there is exactly the most buoyant activity in the whole field of oil exploration. The Victorian figures which I cited, the effect on self-sufficiency, the Australian economy and the employment consequences show that Australia is in a very serious position. The Government has said that Jabiru and Challis would not have gone ahead had it not been for the resource rent tax. We all know that the early estimates of Jabiru's capacity have been significantly revised upwards. Indeed, I am told that under the earlier estimates Jabiru was not considered a very profitable proposition. Because Challis and Jabiru are close together and the assessed capacity of Jabiru has increased, the two will go ahead. I would suggest to the Minister for Primary Industries and Energy that this development owes absolutely nothing to the introduction of the resource rent tax. Indeed, it has gone ahead only because Challis lies 20 kilometres upstream from the Jabiru field. When one looks at the capital costs of developing Challis and the problems in future exploration one realises that the company has recognised the reality that there is an opportunity there. I can see no relationship whatsoever between the development of these fields and the introduction of the resource rent tax. This tax is not a properly structured profits based tax. Over 90 per cent of wells drilled fail to encounter hydrocarbons, yet the cost of drilling many of the wells will not be permissible expenditure for the purpose of determining RRT liability. The Chairman of APEA, in his 1984 address to the Coopers and Lybrand survey of the industry, stated that the industry earned a net profit on average shareholder funds of about 19 per cent but the net profit on average funds employed was only 10 per cent. The industry as a whole was left with a net profit of around $A621m from which to pay dividends and put funds aside for exploration. So much for these windfall profits which may well have occurred 10 years ago but which do not exist now. The Minister should realise that the heart of the Australian industry consists of 50 to 60 Australian companies. There are only 300 companies involved in oil exploration, most of them Australian. There are over 300,000 shareholders in listed oil exploration companies. Of course, the Australian Mutual Provident Society, National Mutual and other investor companies are included amongst them. We do not believe that this tax will add one whit to the encouragement of oil exploration off-shore from Australia. We believe the tax is wrongly based. We think it has failed to take account of the circumstances of the industry and for that reason the Opposition opposes the legislation. Mr DEPUTY SPEAKER(Mr Cowan) —Order! The right honourable member's time has expired. Mr BRUMBY(Bendigo)(5.25) —It is my pleasure to support the Petroleum Resource Rent Tax Assessment Bill, the Petroleum Resource Rent Tax Bill, the Petroleum Resource Rent Tax (Interest on Underpayments) Bill and the Petroleum Resource Rent Tax (Miscellaneous Provisions) Bill. These are Bills which have been before this House before. They were passed by the House prior to the dissolution of Parliament for the 11 July election. The legislation gives effect to announcements which the Government made in 1984. Of course, the legislation has to do with replacing production based tax with profit based secondary taxes in the petroleum industry. I want to highlight a few of the issues which have been raised by the Opposition and the right honourable member for New England, the Leader of the National Party of Australia (Mr Sinclair). I will paraphrase briefly from earlier debate on this legislation. It is important to emphasise that the legislation is not about additional taxation for the petroleum industry, rather it is about a form of taxation which will replace the existing taxation. The Minister for Primary Industries and Energy (Mr Kerin) said in his second reading speech on the Petroleum Resource Rent Tax Assessment Bill: I emphasise that the proposed tax replaces the existing system-it is not in addition to it. In these Bills we are talking about a secondary tax regime. The tax will be payable only in respect of projects which earn in excess of a certain rate of return. It is my view and the view of the Government that at a time when there is concern about levels of oil exploration it makes sense to be giving effect by legislation to a tax system which provides for the taxation of profits on the basis of a high level of profits from very lucrative finds and which replaces the production based system which tends to discriminate against marginal prospects. In other words, we have in this resource rent tax legislation legislation which looks to encourage exploration and improve prospectivity because it will ensure that many marginal petroleum fields around Australia will be developed which otherwise would not be were the previous system of production based taxes solely to apply. So we on the Government side think that this resource rent tax system offers considerable benefits to the petroleum industry. We think that the legislation strikes a reasonable balance between the objectives of satisfying the rights of the community to share in the profit of a community owned resource and the need to provide adequate returns to people in the exploration industry. A number of issues have been raised by the Opposition in this debate. The first one was that this tax represented an additional tax. That is a furphy. As I have said, this is simply another form of taxation; it is secondary taxation. It is a tax based on profits. Profitability above a certain level will be subject to tax under this legislation. It replaces, by and large, a tax system based on production and in that way we think it will assist in the exploration or marginal exploration fields. The second claim that has been made by the right honourable member for New England concerns prospectivity. The Government and I do not have any objection to the view that there are other countries which are more prospective for oil than is Australia, but we certainly reject the suggestion that the industry in Australia is less prospective simply because of the introduction of cash bidding and the resource rent tax. In fact, if one looks at the statistics, one will see that trends in Australian exploration activity are similar to those which are being experienced elsewhere in the world. What we have seen in the last two years is a dramatic fall in exploration activity during 1986, in response to falling international oil prices, followed by some signs of a recovery on-shore, but certainly subdued activity in 1987. So from our point of view we would argue very strongly that the statistics show that it is the collapse in international oil prices, not a resource rent tax or cash bidding, which has led to some reduction in off-shore exploration in Australia. The right honourable member for New England in his contribution referred to a number of countries-Canada, the United Kingdom and the United States-in which exploration activity was more prospective. Let me make a few comments about that point. In Canada on-shore exploration activity in 1987 is expected to approach the level achieved in 1986, and that level was 38 per cent below the level achieved in 1985. In the United States total well completions on-shore and off-shore declined by 46 per cent in 1986, compared with the figure for 1985. In September 1987 Saloman Brothers Inc. forecast that a further decline of about 4 per cent would occur in 1987. So in Canada and the United States, two countries which the right honourable member for New England mentioned as being more prospective, 1986 exploration levels were down significantly-by about 40 per cent on average-on 1985 levels. They were down because the international price for oil had declined. If the international price for oil has declined, clearly the benefits of exploration are considerably less than they are at a time of a higher international price for oil. I think that dismisses the argument which was put by the right honourable member for New England about prospectivity. The right honourable member also claimed that the introduction of the resource rent tax and cash bidding had led to a depressed level of off-shore exploration activity in Australia only. I have already answered part of that claim. We on the Government side reject the argument that either the resource rent tax or cash bidding can in any way be related to the reduction in exploration activity that has occurred since the record level of activity which took place in 1983. Again, the statistics show that from 1983 to 1985 there was a relatively steady level of off-shore exploration activity, with 43 to 50 wells drilled each year. There was a marginal fall in activity in 1984, but one cannot attribute that to resource rent tax. What we say, though, is that there was a reduction in the number of wells drilled in 1986. In fact, only 28 wells were drilled in Australia. It is likely that there will be a further reduction over the full course of this financial year. It is fairly obvious that the principal factor, as it was for the fall in exploration levels in the United States, Canada and other areas of the world, is the world oil price. For instance, in the early 1980s we were getting well over $A40 per barrel. The price today is less than $A30 per barrel. There is some uncertainty, obviously, about future price rises. Obviously, if one gets $A40 or $A50 a barrel, there is a bigger incentive to explore than if one gets $A30 a barrel. I note that, in the context of that relationship between Government policy and exploration in Australia, the Broken Hill Proprietary Co. Ltd (BHP) has made it quite clear that it would not have gone ahead with the development of the Jabiru field were it not for the introduction of the resource rent tax, because it is a secondary profit based tax rather than a production based tax. The final point which I wish to address is, again, a point made by the right honourable member for New England-another of the furphies that he raised in this debate. He alleged that the fact that a number of Australian companies were investing in oil exploration overseas reflected a lack of interest, a lack of prospectivity and a lack of profitability in drilling in Australia. Again, we reject that hypothesis because we think that the facts simply do not support it. It is true that there has been some increase in exploration overseas, but that is probably a good thing. I always think it is a good thing when I hear of Australian companies investing overseas. If those companies are profitable, they return a profit to Australian shareholders, they broaden the profit and capital base, they provide the foundation for further investment and further growth in the future. They also indicate, obviously, an increasing maturity amongst Australian companies. As far as I am concerned, if Australian companies get into the act overseas, that is good. If they are profitable, that is even better, because they pay a dividend to shareholders in Australia. There is absolutely no evidence to suggest that any tax regime in Australia is encouraging exploration overseas. Certainly, as I said, there has been some increase, but mainly among small to medium sized firms which are maturing and spreading their wings by investing internationally. We think that that is a good thing. It is one thing for the right honourable member for New England to say that it is bad for Australian companies to invest overseas, but he forgets that foreign oil companies still find Australia an extremely attractive investment opportunity. In fact, 60 per cent of Australian off-shore exploration permits are issued to firms with foreign equity. So the argument that Australia is a sinking ship in terms of oil exploration, that companies are rafting off-shore, investing in America and Canada, is simply not sustained by the facts. The fact is that, of the permits issued in Australia, 60 per cent are issued to companies which have foreign equity. So overseas investors still find it attractive to invest in Australia. Mr Deputy Speaker, there is a time limit on this debate. I conclude by saying that the Government strongly supports this legislation. We believe it is eminently sensible legislation to replace a production based tax regime with a tax which is payable on the basis of high levels of profit. Clearly, the new taxes put into effect by this legislation will encourage the development and exploration of many marginal oil deposits that, under the existing and previous tax regimes, would not have been explored, because tax would have been payable through production levies and excises, irrespective of the profitability of such fields. This is not an additional tax; it will tax only those finds which are highly profitable. For those which are marginal, such as the Jabiru find, it will be an incentive for exploration and production. As BHP has noted, it would not have gone ahead with the Jabiru field were it not for the introduction of this tax. Mr SMITH(Bass)(5.39) —I will second the amendments to be moved to the resource rent tax (RRT) legislation by the right honourable member for New England (Mr Sinclair). They refer basically to two broad areas: a widening of the deductibility, which I will mention later, and the deductibility of cash bids. Cash bids were the subject of a piece of legislation that we dealt with some time ago. This is a piece of legislation that ought to interest all members in this place because, in a sense, it talks about a new tax regime which will have a fundamental effect on, and be of importance to, the tax raising mechanisms of both this Government and any future government. When one looks at raw materials that have enriched the pockets of many, one sees that over the centuries they have included king cotton from America, opium from China, rubber and tin from Malaysia, spices from the East and gold and wool from Australia. Each has had its boom period and, from each, great fortunes have been made. The days of pure laissez-faire have long passed. Today we expect-and quite rightly-that the whole community will benefit from the natural resource endowment of a nation. Governments, as well as individuals, are keen for windfall profits. As wealth derived from natural resources and all other sources is collected by Government revenue raising measures and redistributed by Government spending measures, it is pertinent to ask what kinds and levels of taxes should apply to these commodities and whether the Government should look more at what the commodity can bear rather than at what is fair, reasonable and encouraging to future exploration and development. That is really the essence of this debate. That the Australian public has benefited enormously from the higher price of world oil is not in question, except where it hits the hip pocket most-certainly, at the petrol pump. The decision to go down the route of import parity pricing (IPP) is seen now as being correct and it is testimony to the wisdom of those who put that policy in place. State and Federal taxes from crude oil, natural gas, liquefied petroleum gas (LPG) and petroleum products have, since 1980-81, totalled over $38 billion, which is a massive amount of money. This has given governments enormous capacity to redistribute income. The high cost of oil to the consumer has had other benefits, when one considers the nature of this non-renewable resource: it has encouraged a shift to other energy sources, such as coal; it has encouraged us to use less liquid fuels-for instance, the move to smaller cars; it has encouraged research into energy efficiency and, therefore, energy savings; and it has encouraged research into alternative energy sources although, as I have said to the Minister for Primary Industries and Energy (Mr Kerin) before, we are not spending nearly enough money in that area at present. In other words, there is some, undoubtedly too little, preparation for the time when the oil well runs dry. This is already evident in Australia. As crude oil production has declined from its height in 1985, so has the revenue that governments have been able to reap from it. In 1985-86, crude oil revenues netted the Government over $4 billion. In this financial year they are expected to be only $2.2 billion. In the period from 1980-81 to 1985-86, crude oil contributed 70 per cent of a total government revenue from the petroleum industry. This financial year, the contribution is expected to plummet to 30 per cent, with petroleum products making up the rest. I emphasise the words `petroleum products'. It is look out, Mr Motorist. The IPP pricing mechanism we have seen utilised is coming to an end on 1 January. The share markets crash has also had a profound effect on petrol pricing. The Weekend Australian newspaper only this weekend published an article under the heading `Big petrol price rise likely in December'. Perhaps the Minister will see fit to respond to the article, because I believe that it raises another element that needs to be looked at. What will such a price rise do to the consumer price index (CPI) and the inflation rate during the first quarter of 1988? One sees that the transport sector of the CPI has been the quickest moving, upwards, of all the components that make up the CPI. If one adds another 3c to 4c price rise on petrol-based on the material that has been found by that reporter-one sees that there will be a dramatic increase in inflation at the end of that first quarter. So 1988 might not be as rosy as some might like to believe. It is now generally accepted economic theory that the price of oil needs to rise each year by an amount broadly in line with prevailing interest rates. This is to reflect the fact that conventional crude is becoming scarcer and will be ever more costly to produce. The problem that we as politicians must face is that excessively low oil prices, leading to increased demand and decreased exploration, may bring disruptions in supply which can prove more damaging to the West than artificially high prices. High prices have had some real benefits for Australia. They have stimulated domestic exploration and production, thereby reducing our dependence on the highly volatile Middle East supplies, and they have prevented fields already in production from becoming uneconomic. An increase in energy efficiency programs, the switch from oil to other traditional sources, wherever practicable, and alternative energy research have been the products of these high prices. The thrust of what I am saying, and it applies to all Western democracies, is that even those countries which are heavily dependent on imported oil and which, one might imagine, might be delighted that the price has fallen, such as Japan, can see that some benefits have accrued to them because of higher prices. But even if Western governments could agree on a price for oil, there is probably little that they can do to influence it. The main contribution governments can make is through the tax regime. All, including Australia, were quick to take their slice when prices rose and will need to respond equally flexibly now to encourage exploration, and perhaps even consider subsidies for some projects. I attended the national gas conference in Perth recently and it was interesting to hear one speaker talk about enhancing exploration activity by imposing a tax regime of 150 per cent similar to the tax regime of 150 per cent for the film industry. Perhaps we should look at that proposition. The key word is `flexibility'. What we are denying ourselves is flexibility in policy settings. After extracting enormous economic rents for a decade, it might be in the long term interest of the West to plough back some subsidy when prices are unsustainably low. This is because the world's proven oil reserves show little change. The additional increases in proven reserves, since 1975, most particularly in Kuwait, Mexico, Saudi Arabia and Venezuela, are matched by a net reduction in reserves in North America, Western Europe, the Far East and Africa. The poor productivity of oil exploration has sharply reduced the differential between the value of the oil in the ground and the cost of recovery. A study of 375 oil companies which was reported in the Petroleum Economist of March 1987 found that global discovery costs exceeded the value of the reserves being added. Given the poor returns, it is not surprising that the 1986 crude oil price decline was associated with sharp cuts in oil exploration activity both in Australia and world-wide. What of the contribution of indigenous crude oil to Australia's overseas trade balance? Petroleum producers have contributed $27 billion to Australia's balance of trade with other countries in the past four years. This figure comprises crude oil import replacement by indigenous production, valued at $22.5 billion; crude oil exports at $3 billion; and LPG exports at $1.6 billion. What of the national impact of the domestic crude oil rundown and the declining self-sufficiency crisis to which the right honourable member for New England referred? The effect of the decline in crude oil production on the Australian economy depends on the level of domestic crude oil production and the price of imported crude oil. In 1986, the price of crude oil fell dramatically-that was due to a chain of events-and it is now firming again. The majority expert view is that over the 1990 decade oil prices are likely to increase significantly from their current levels. That is the view of the National Institute of Economic Industry Research. The Victorian Department of Minerals and Energy has estimated that there is a 50 per cent chance that Australia will be importing 320,000 barrels of crude oil a day by 1992-93, based on a prediction that explorers will find sufficient oil to add 80,000 barrels a day to production by that time. The cost of importing crude oil at this level would be more than $3 billion in 1987 dollar terms, at current exchange rates, and an oil price of $US17 a barrel. This compares with a net crude oil import bill of only $44m in 1985-86. It is interesting that the Department's estimate of additional discoveries assumed a continuation of reasonable levels of exploration activity both on-shore and off-shore. This is no longer a valid assumption, particularly if a resource rent tax is imposed in off-shore greenfields areas. The exploration on which the Department based its forecasts is not occurring and the lead time between exploration and production, particularly off-shore, is a minimum of three years. The gap between supply and demand could be even wider than the Department's median forecast and closer to its high probability forecast that only 40,000 barrels a day will be added to domestic supply by 1992-93 from new discoveries. The annual import bill would then be $400m higher. So what is the Government doing about this? Twelve months ago it instituted Energy 2000, which was a reasonable program set up by Senator Evans. But what has happened? The Government held a ministerial conference and we are waiting to see what will come up. I inform the Minister that we need that program now more than we ever did. It is time that the Minister got on to his Department and started to crack the whip. Energy 2000 is being seen as increasingly more important as the dimensions of the problems that we face start to be plain for all of us to see. The legislation before us is made up of a package of Bills. It is complicated and detailed. The history of the resource rent tax is important, as the right honourable member for New England said. As far as I can find out, the concept of RRT dates back to 1975, in an article by Ross Garnaut and Mr Clunies-Ross. In a subsequent paper in 1979 entitled The Neutrality of the Resource Rent Tax, they argued that a tax of this nature-that is, a tax on the profits of production-is tax neutral; in other words, it is a tax that does not alter the ordering of possible investment in its attractiveness to investors from the ordering that would have existed in the absence of tax. RRT is a tax which is not collected until investment has been recouped, with interest at a specified rate. However, the authors noted that the RRT, if applied alone, has several weaknesses-the major one being that it would not collect the whole of the rent without distorting production and investment decisions. In other words, applied alone it would not be tax neutral. This particular weakness, the authors saw, could be remedied by the allocation of exploration rights by competitive cash bidding. The authors recognised that investors are influenced by the knowledge that fiscal regimes will change at some future time and that such a change is likely to reduce their returns. They termed this phenomenon `sovereign risk'. It is more aptly described as the fear of the worst. They identified the sovereign risk phenomenon-and now we suffer from it; it is coming back to bite us. There has been uncertainty in 1975 when the first paper was presented and in 1979 when the Labor Party signalled that it was going down this route. We are nearly 10 years down the track. The uncertainty has seen Australian companies vote with their feet, despite what the honourable member for Bendigo says. It is all right to talk about companies going off-shore, investing and being happy about it, and seeing the money come back in terms of dividends, but they are raising equity in this country and they are planting it overseas. We need the oil to be found here. That is what we are concerned about. It is all right for companies to go off and make a profit. We would be happy for any company to go off and make a profit, but the Government is putting in place a tax regime which will not allow the companies to do that. The authors recommended, and the Government has obviously followed their advice, that a heavier reliance on conditional rather than prior fixed payments is the way to go. As I said earlier, the two papers I have referred to that were produced in 1975 and 1979-and there was a subsequent one in 1984-were put together in a very different economic situation and certainly a very different oil scenario for Australia. That is the key point. It is all right to theorise but this theorisation took place 10 years ago. When the Government tries to impose it now it is blind to what is actually happening and what the realities are. Nevertheless, the Government adheres to this line of thinking despite the changes which have occurred both in fact and in perception. In An Outline of a `Greenfields' Resource Rent Tax in the Petroleum Sector of April 1984-a government publication-the Government decided to narrow the focus of its RRT proposal to new off-shore petroleum projects-that is, those which had not reached the development stage. Currently these are the Jabiru and Challis fields in the Timor Sea. Areas excluded from RRT were the Bass Strait, North West Shelf and associated permits which, if included, would considerably disturb the current excise-royalty arrangements. At the time the Government was considering introducing the system of cash bidding in off-shore areas but had not reached a position on whether cash bids would be deductible for RRT purposes. It stated, however, that non-deductibility could have the advantage of simplifying the administrative arrangements. What a reason for not having it; it is simple in terms of administration. The Government says, `We're not worried about getting the administration right. We know we've got people in the departments who can sort those problems out'. We have moved an amendment to make cash bids deductible because it is a cost of exploration. The Government's reluctance to do so is really hard to understand. The Government decided that the RRT will be a two-step tax arrangement. The threshold should be set at the long term bond rate plus 15 percentage points which I understand is effectively 28 per cent free of tax except, of course, for the imposition of company tax-and a tax rate on top of that of 40 per cent thereafter. The former is to allow automatically for changes in the rate of inflation and for the movements in real interest rates. There are three vital issues in this legislation: the threshold, the tax rate and the deductibility. It is the deductibility provisions that both us and the industry are urging the Government and the Australian Democrats to widen because if we must have this tax there must be 100 per cent deductibility available over the whole exploration area. Certain exploration expenditure will be deductible for RRT purposes from the five years preceding it. Any undeducted exploration expenditure at the end of a year will be carried forward year by year. However, the period prior to the granting of the first production licence, over which eligible exploration expenditure may be compounded year by year at the threshold rate, would be limited to five years. The Government has also decided that eligible exploration expenditure refers only to expenditure within the original exploration permit area. Exploration expenditure elsewhere is not a deductible expense. As I said, we seek to amend that to include the whole exploration area. When one looks at our amendment-and it is quite detailed-one realises that that is what the effect will be. In our view RRT is unsoundly based in that it applies to successful outcomes but gives inadequate relief for failures. It is a risky business. Not every time a hole is put in the ground oil is found. We want those expenditures to be deductible in the whole exploration area. The Government's proposals will distort exploration decision-making and, in particular, will inhibit wildcat exploration in high risk areas. When we spoke on cash bidding we pointed out how many wildcat wells are not being drilled in this country. It is certainly the case as the right honourable member for New England said. A company will attract RRT on successful projects even though it earns no aggregate economic rent. It appears that the Government has taken no notice of the industry. This tax has been talked about for nearly 10 years. Yet here we are today debating it again but the industry is unhappy and it does not appear to have been consulted fully. The Australian Institute of Petroleum made many points in its response to the Minister for Primary Industries and Energy at the Energy 2000 Conference. It said that the tax regime in Australia is more onerous than that applying in the United States of America and Canada. It pointed out that Australia's marginal rate of government take is 69.4 per cent-nearly 70 per cent. In the United States of America it is 45 per cent and in Canada it is only 39 per cent. It was interesting to hear the honourable member for Bendigo talk about Canada. It is actively encouraging explorers to come back by way of incentive. We are doing the complete reverse. We are going in the opposite direction to every other Western country. Admittedly, Norway, the United Kingdom and Indonesia have more onerous rates of tax but their prospectivity is far higher. That point has been picked up before. Indeed, the indecision on the tax regime has led to a dramatic move away from Australia. An amount of $180m has already gone to the United States, Colombia and Belize. The Broken Hill Proprietary Co. Ltd takeover of Hamilton Oil from the Volvo company last week has meant that half of the exploration activity and staff of BHP are now in Houston, I understand. The Government has been heavily reliant on revenue from the crude oil levy. This reached its height in 1980-81 when it comprised nearly 10 per cent of total government taxation revenue. This year it is expected to contribute only 2.8 per cent of total revenue. This surely highlights the need for the Government to adjust to the new circumstances by making its own contribution to restraint. Instead, the Government has raised taxes on petroleum products, further increasing distortions in the tax system. What about the share market crash? There ought to be new concerns there for equity raisings. The RRT penalises risk taking with the result that activity is biased away from exploring the larger, riskier wildcat prospects, those that offer the main opportunity for a significant discovery. The Australian Institute of Petroleum points out that petroleum taxes are structured around infrequent events, that is major petroleum discoveries. There have been only two in the last 20 years. If we are to find more we have to get out there and explore. Something must be said in my last few minutes in this debate about BHP. It has given qualified support to the RRT while the rest of the industry opposes it. Although BHP is, like other oil companies, a vigorous opponent of secondary taxes-which this is-knowing the inevitability of an RRT it assented to the Government's proposal because it thought the RRT less onerous than excise royalty arrangements for small developments such as Jabiru. BHP commenced the Jabiru development on the firm understanding that the Government would hasten the RRT legislation. BHP can deduct exploration activities in Challis from production in Jabiru. However, it too wants wider deductibility of exploration expenditure against RRT liability. It has suggested that 100 per cent deductibility in all greenfields areas would have the maximum impact. In conclusion, few could quibble with the Government's stated intention of striking a balance between yielding a reasonable return to the community and maintaining adequate incentives for explorers. RRT, though, is not the way to achieve this. It is based on a false premise. Neither exceptional accessibility nor high quality petroleum deposits are known to exist. Those that might occur are unlikely to yield profits well above those necessary to attract investment. Revenues from RRT are uncertain. The Democrats certainly believe that they may be too low. The coalition parties believe that RRT is not the most efficient way to ensure either community benefit or incentive for explorers. Mr DEPUTY SPEAKER(Mr Cowan) —Order! The honourable member's time has expired. Mr MARTIN(Macarthur)(5.59) —The purpose of the Petroleum Resource Rent Tax Assessment Bill and cognate Bills is to give effect to the new profit-based taxing regime for off-shore petroleum projects which, in respect of those projects, is to replace the existing production-based excise and royalty arrangements. These Bills encapsulate that very aim of the Government. It is very important that a few introductory remarks be made about this legislation before I address some of the comments that have been made by the two previous speakers from the other side of the House, the right honourable member for New England (Mr Sinclair) and the honourable member for Bass (Mr Smith), and pick up on some of the points raised when this legislation was debated some months ago. I have heard the same sorts of comments from those opposite in tonight's debate as were raised by them several months ago. First, these Bills follow extensive consultation with the industry and the States, despite what the honourable member for Bass (Mr Smith) has just said. All the oil companies may not agree with the legislation. The Broken Hill Proprietary Co. Ltd (BHP) may be the only major company that has signalled its intention to support it. Nevertheless, the companies have been consulted and the Government has taken into consideration the views that have been expressed. That is how this Government goes about its business of governing. It consults the community that is affected by the legislation being proposed. It makes policy adjustments accordingly and the legislation is then put in place. Secondly, the legislation is based on the concept that petroleum resources are community property and that the community as a whole should share in the potentially high returns from the exploration of these scarce, non-renewable resources. I do not think that anybody in this place would disagree with the concept that petroleum resources are community owned, that they are the basis of all our community, that therefore we should take a very real interest in exploration for those resources and that an appropriate taxation regime should be put in place which is not production-based but which gives dispensation for the risk being taken. Thirdly, the proposed tax regime certainly is not additional. The right honourable member for New England led off in his contribution this afternoon by suggesting that this was an additional tax. I did not hear the rest of the right honourable member's speech but, no doubt, he ran past us such phrases as `the highest taxing, biggest spending government this country has ever seen'-the kind of thing we hear time and time again from those opposite. They continue to raise this total furphy. This tax regime is not additional. It replaces excise and royalties which, in the past, have been based on production. Fourthly, this resource rent tax, as related to achieved profit, is a far more efficient and equitable secondary taxation regime than anything that has existed in the past. It offers considerable benefits to the petroleum industry for that reason. Finally, the tax is to apply to a company's taxable profits from the recovery of petroleum in off-shore areas where the Commonwealth's Petroleum (Submerged Lands) Act 1967 applies. We have given dispensation in the case of production licences granted on or before 1 July 1984 and the permit areas from which those production licences were drawn. Clearly, as I indicated at the start, through the process of consultation, dispensation has been given for specific areas. This reflects well on the consultative process that has gone on in the drafting of this legislation. Because of those considerations and concessions, the tax will not apply to the North West Shelf permit areas or, indeed, to the Esso and BHP Bass Strait permit areas. The excise and royalty arrangements that are presently in place will continue to apply in those areas. This package of legislation before us came before the House several months ago. Unfortunately, it was not put into effect. A number of points on this issue have been raised in the debate today in the contributions by the Leader of the National Party of Australia (Mr Sinclair) and the shadow spokesman on energy, the honourable member for Bass. Those contributions reflected upon comments that had been made by previous speakers in the earlier debate and upon some of the arguments that had been put forward. I would like to briefly address several of those. The first is this furphy about the tax being an additional tax on the petroleum sector that cannot be justified if exploration is to be encouraged. There seems to be a feeling that the Government is endeavouring to stifle exploration for new resources and energy substitutes. As my colleague the honourable member for Bendigo (Mr Brumby) indicated, that certainly is not the case. We are encouraging these sorts of explorations, and not just here in Australia; we are also looking at equity in overseas countries because that is brought back to Australia. The second reading speech of the Minister for Primary Industries and Energy (Mr Kerin) and the explanatory memorandum made it perfectly clear that this is not an additional tax. It will not discourage exploration but will benefit the petroleum industry. The Bills are a product of the extensive consultation that I have mentioned. As a government, we have endeavoured-with outstanding success, in my view-to promote consultation. That is in stark contrast to the efforts of those opposite. I am not sure whether this matter has been raised so far but it was said in a previous debate that this tax will be an administrative nightmare for both the Government and the oil industry. I think that in a previous debate in the last Parliament the honourable member for Dawson (Mr Braithwaite) had carriage for the Opposition of these Bills. I just point out to those opposite that these sorts of comments about the capital gains tax and the fringe benefits tax have been made previously-and have been proved wrong. These efforts are part of the reforming of the various taxation regimes by the different legislation that comes before this place. If this method of taxation is proved to be more effective-as it has been-it is justified. We have reformed the tax system in the income tax area; now, with this legislation, we are reforming the tax system in the resource area. An argument has been put that the community already benefits from a profit-based relatively high company income tax rate of 49c in the dollar and other applicable taxes. That argument simply does not hold true. In my view, it certainly proves that there are on the Opposition benches those who have no understanding of the concept that petroleum resources are community property, owned by us all, and that, therefore, the community should share in that potentially high return that will come through exploration for the resources there. I am sure that the honourable member for Wannon (Mr Hawker) will pick up the point regarding the differences in philosophy between the two sides of the House. Mr Hawker —Are you going to bring in a gold tax? Mr MARTIN —I hear the honourable member yelling out about other taxation regimes. He will be aware, as everybody else is, that government is a difficult road and that decisions have to be taken with all things in mind. Mr McGauran —Is that the best you can do? Mr MARTIN —The Opposition obviously believes that these resources are the sole property of the people in a position to exploit them. That is a sort of finders-keepers attitude. I am sure that that view is shared by the honourable member for Gippsland, judging by the strength of his interjection. The community certainly is benefiting by this taxing regime that is being put in place by this legislation. The Opposition would also have us believe that the oil industry does not make any profit. I refer those opposite to many speeches that have been made by my friend and colleague the honourable member for Dunkley (Mr Chynoweth), who has constantly raised the question of the oil industry, oil companies and their profit motives, what drives them and so on. My colleague once said that the oil companies are venomously critical of government policies in the industry. I guess that that was a reflection of what they saw as a stifling of profits to a few. It is probably because these policies hinder the companies' ability to exploit resources, so it is claimed-and the resources are the property of every Australian-and to enhance their profits, which they want to keep to themselves, that the oil companies are generating this sort of comment. I understand from the speakers list that our very good friend the honourable member for Franklin (Mr Goodluck) will speak during this debate on petrol pricing. Mr McGauran —It will be a good contribution. Mr MARTIN —It will be a good contribution this week. We have heard him ask only one question this week and I think he gave two or three speeches last week, which I had the pleasure to hear even though the same material was being run by. With respect to petrol pricing, as I pointed out in my contribution during the last round of debate on these Bills, in December 1975 under the Liberal-National Party coalition petrol cost 15.6c a litre; by March 1983, the price was 43.1c a litre. That is an increase in price of approximately 176 per cent over that period. At certain places within metropolitan areas of Australia and, indeed, in some provincial centres petrol can be bought more cheaply. I respect the views of those opposite who suggest that these discount prices are not available in many country areas, for obvious reasons. During the price discounting wars that seem to take place very frequently, one can purchase petrol at some service stations, certainly in my electorate, for 46c and 47c a litre. That represents an increase in price in the past four or five years of about 4c or 5c. That is quite amazing. That certainly is not the maximum price that can be charged but it is a price at which petrol is freely available to many people in the general community. It is most enlightening to reflect on the figures I just cited: at December 1975 petrol sold for 15.6c a litre and at March 1983 it sold at 43.1c a litre, an increase of 176 per cent. The price of petrol has increased by only 26 per cent in the past five or so years that this Government has been in office. Again, that says something about the import parity pricing principle to which we continue to adhere but which has been argued against by those opposite, interestingly enough since they were the ones who put it in place. The situation of the oil companies and those who make a profit from the sale of petrol must be examined in the light of the price discounting wars that go on around Australia. If no profit is being made from the sale of petrol, how is it that these discount wars can continue for the length of time that they do? How is it that the petrol companies can offer petrol at the prices they do? Yet, at the same time, those companies very quickly adjust those prices, always upwards, at an appropriate time, perhaps when a new shipment arrives or whatever. Honourable members of this House should give their attention to explaining just how that practice operates in the broad community, because there is a misunderstanding in the broad community about petrol pricing policies. People tend to forget that by comparison with countries in the Organisation for Economic Co-operation and Development, Australia has the third lowest fuel prices of any country in the world. It is most important that that sort of statistic be conveyed to people. I agree with the suggestion of the honourable member for Bass that we should encourage exploration and continue to find oil here in Australia in order perhaps to become self-sufficient. I wish to turn that suggestion round a little and pick up some of his comments on the Energy 2000 document. Through his studious reading of that document, the honourable member would no doubt be aware that considerable attention is being given to alternative sources of energy. For example, one must look at the coal industry at present. Several years ago the average price per tonne of steaming coal was in the high $30 bracket. Steaming coal is now being sold for $28.50 per tonne out of Australia. Oil prices have been depressed greatly, so that situation is continuing. There is also uncertainty in the world market-place because of the problems in the Middle East. Because of those situations it is very likely that a number of overseas countries that perhaps have used oil as an energy source will consider using steaming coal, thermal coal, as a substitute. If that happens, I suggest that it will open up very important and significant markets for Australia in the future. I hope that that prophecy is proven to be correct, because it would certainly benefit a number of people in my electorate. It would certainly result in the coal industry returning to its former glory. As I indicated, these Bills are a very important part of the Government's commitment to changing the taxation regimes which operate in a variety of areas in Australia. We are endeavouring to get away from the concept upon which the honourable member for Bass dwelt, of looking at the possibility of providing subsidies or tax incentives for exploration. It is the old socialise-the-losses type of argument. I suggest that we look at the alternative energy sources and Australia's ability to sell them to overseas countries or, indeed, to use them internally in Australia. This legislation will provide real incentives for oil exploration in this country, and we must provide those incentives in full knowledge that we must encourage such exploration. If we do that, the benefits of this legislation will be passed on to the Australian community. Mr HAWKER(Wannon)(6.15) —In speaking to the Petroleum Resource Rent Tax Assessment Bill and cognate Bills, I wish first to take up some of the points made by the honourable member for Macarthur (Mr Martin) because I really believe they cannot be left unanswered. He spoke of the incentives that this new tax will provide. The industry has been aware for some time of the proposed imposition of this tax. Already there has been an incredible downturn in oil exploration. If the honourable member wants better evidence of the adverse effect that this tax will have on our exploration and our likelihood of stopping the continuous decline in our reserves, he only has to look at what has happened in Australia over the past year or so. I wish to take up a couple of other points made by the honourable member. He made great play of the fact that the Government had engaged in consultation. I suppose one could say that consultation simply involves telling people what one intends to do, but that is not very effective consultation. As far as I know, only one company has agreed with what the Government is doing. So I would say that that is a pretty poor record of consultation. If the consultation carried out had been effective, one would expect the Government to have received reasonable support for what it proposes. The honourable member commented on the Opposition's claim that exploration has been stifled. The fact is that because of this legislation exploration has already been stifled. The figures prove that; there is no argument about them. The honourable member said that oil is a community resource and therefore belongs to everyone. The Government's attitude is totally inconsistent in that regard when one looks at other minerals. I just mention gold as one example. The Government's taxation policy is totally inconsistent in respect of gold and oil. I turn to the coalition's record, since the honourable member mentioned it. The honourable member was amazingly inconsistent in his comments. On the one hand, he was critical about the rise in the price of oil during the term of the previous coalition Government. Of course, when Labor came to power it did not propose reducing any of these oil taxes; indeed, the honourable member was quite proud of the fact that they were increased by a further 26 per cent. Again, the honourable member has been remarkably inconsistent. One assumes that now that the Australian Labor Party is in government it has endorsed the decision taken by the previous Government-at the time I think it was accepted by the community as being a prudent decision-that import parity pricing would conserve a limited resource and that it would encourage the use of alternative fuels and exploration. As the honourable member for Bass (Mr Smith) pointed out so well in his speech tonight, obviously times are changing. We must have some flexibility in oil taxing policies. It is clear that the import parity pricing decision was the correct one at the time. Its endorsement by the present Government is evidenced by the fact that it did not dismantle it. But the present Government has now found it necessary to introduce a new tax-the resource rent tax. As the industry has known for some time that this tax was to be imposed, it has already had an adverse effect on the level of exploration. It is remarkable that only three Government backbenchers are listed to speak in this debate, compared with 10 members from the coalition parties. Included among those 10 speakers from the coalition parties are four shadow Ministers. I think that demonstrates the Opposition's level of interest in this new tax and the lack of interest of Government supporters in their own legislation. In speaking to these Bills on the resource rent tax, I wish to concentrate on what this new tax regime will do to our exploration activity and the effect it will have on our oil supplies. I wish to go in some detail into the serious future problem of our oil reserves running down at a rather disastrous rate and the effect that that will have in a relatively short time. Not only will we be forced to import more oil, but also our balance of payments will be dramatically affected. I do not think anyone in this chamber needs reminding how serious the balance of payments is already. It is worth recalling that over the past 10 years Australia consumed almost 2,000 million barrels of crude oil, yet discoveries during the period amounted to only 830 million barrels-less than half. At the same time, consumption was 1.3 times greater than production. So, we are already starting behind and this new tax will only make it worse. What I find of even more concern is that the number of exploration wells fell from 264 in 1985 to 131 in 1986, a fall of more than 50 per cent. The industry is aware of this resource rent tax and has been for a couple of years. This tax, along with the fall in world oil prices, has encouraged explorers either to stop exploring in Australia or to move off-shore. The number of development wells fell from 96 in 1985 to only 30 in 1986. It is interesting to note that as of 30 June 1986 our remaining recoverable reserves were nearly 1,700 million barrels. Theoretically, about half as much again is available for recovery, which means that our total reserves are of the order of 2,500 million barrels. At the current annual rate of consumption of about 170 million barrels our demonstrated economic reserves will last only 11 years. Mr Smith —Eleven years? Mr HAWKER —Eleven years; that is right. So, by the year 2000 we could be dependent on foreign sources for up to 60 per cent of our oil needs. Mr Smith —You will be nearly 40 then. Mr HAWKER —I shall ignore that interjection. What is of great concern is the fact that, if we go back a couple of more years, the expenditure on exploration in 1983 was $520m and that has dropped to $130m in 1987-a drop of 75 per cent. While our demand for crude oil is forecast to rise, according to Government figures from 565,000 barrels a day in 1985-86 to 680,000 barrels a day in 1992-93, we have to face the fact that our production is likely to fall from something like 546,000 barrels a day in 1985-86 to 280,000 barrels a day in 1992-93-a fall of almost half. Even by the Government's figures, discoveries by 1992-93 are likely to add only 80,000 barrels a day. So, by any measure we are in serious trouble trying to maintain some form of self-sufficiency. Even by the estimates the Government is making, the chance of our maintaining 50 per cent self-sufficiency is less than half. We would have to find 120 million to 150 million barrels of oil a year. Since 1978 our average has been only 62 million barrels and in most years we had a much higher rate of exploration than we have today. From being fuel self-sufficient in 1985 Australia now faces the situation where by 1992 crude oil imports will be adding $3 billion to the nation's import bill. By the year 2000 this is certain to be much higher. The National Institute of Economic and Industrial Research Pty Ltd estimates that the oil decline will have a $8 billion to $9 billion impact on the balance of trade by 1995-96. Further, it believes that gross domestic product will fall by $1,600m and public sector borrowing will need to increase to cover the loss of excise revenue. These are big figures and they highlight the seriousness of the problem Australia will face in the not too distant future. It goes on to suggest that employment will fall by 22,000 people. The brunt of that will be borne in Victoria as the oil decline is concentrated in Bass Strait. Of course, that will concern very much the honourable member for Gippsland, who is vitally concerned about the future of our oil industry. Mr Smith —And all Victorians. Mr HAWKER —And all other Victorians too. It is a very serious matter and one about which the Government seems to be putting its head in the sand. Yet, by any measure we are seeing our exploration being cut. The Government is bringing in a new tax regime-the resources rent tax-which is a further disincentive to exploration. All in all it is a very serious matter for the future of Australia. It has been estimated by the Australian Petroleum Exploration Association Ltd that for Australia to be 50 per cent self-sufficient in oil by the year 2000 we would have to double our average annual expenditure on exploration for the past five years, which has been almost $1 billion. The drilling rate will also have to be doubled from the present 145 wells a year. It can be seen by any measure that our present drilling exploration program is hopelessly inad- equate to attack the problem. What really concerns me most is that the Government has its own estimates. They show that we have a serious problem with the shortfall, yet the Government does not seem to understand the magnitude of the effort required to achieve 50 per cent self-sufficiency. As the Australian Petroleum Exploration Association has stated, on our historic strike rates we would require the industry to double the average off-shore exploration effort of the past six years. Yet, the Government is bringing in a new tax to discourage exploration. Mr Smith —It is crazy, isn't it? You have a better chance in a casino. Mr HAWKER —It is crazy. Unfortunately, casinos do not generate much off-shore income and one does not get much oil there. What we are seeing is the politics of envy. The Government is not satisfied that it has increased company tax rates. It has brought in a capital gains tax which has an impact on farm-out deals. Again this affects the oil industry. The fringe benefits tax directly affects the oil industry because a lot of the drilling is done in remote areas. That tax adds significantly to the cost. Now we have the resource rent tax and we have cash bidding on new exploration sites. Mr Smith —Capital gains hurts them too. Mr HAWKER —It certainly does. I should now like to turn briefly to the size of the Government take of revenue from petrol and from crude oil. Currently the Government receives about 20.8c a litre in crude oil excise. While that helps improve the budgetary situation, it must be remembered that this will fall to about half in 1991-92. Obviously a question arises as to how the Government will recoup this extra money. Will it put the price of petrol up even further? The honourable member for Macarthur seemed to be quite proud of the fact that since coming to office the Government had increased the price by 26 per cent. I think it is worth looking briefly at where the motorists' petrol dollar goes. If we take the current price of petrol to be about 58.6c a litre, 33.8c or 58 per cent of that is now taken by governments in the form of excise duty, royalty or crude oil levy. Let us not forget our friends in the State governments who are always in for their chop when they can find one. They have their State franchise fees, which are usually a little over 4c a litre. As I said, about 58 per cent goes to governments. I think it was the Treasurer (Mr Keating) who talked about putting a branch of the Australian Taxation Office at every petrol bowser. This Government has not been backward in carrying on what it considered to be some evil of the previous Government. Another thing I should like to mention is that although the honourable member for Macarthur seemed so proud of the fact that the Government has increased the revenue it is generating from oil, it has not been nearly so generous with Commonwealth road funding. In fact, what has happened is nothing short of a disgrace. Sitting suspended from 6.30 to 8 p.m. Mr HAWKER —Before the dinner break I was touching on some of the effects of the decline in oil reserves and also talking a little about why it is that although the Government's revenue from petrol and oil is enormous, it is not returning a reasonable amount to road funding. In fact, over the last four years the Commonwealth contribution to road funding has been static. In real terms it has in fact been declining. In passing I would like also to mention a rather interesting situation that exists in relation to the taxing of fuel and its spinoff relating to sales tax. As many honourable members will probably know, people in the country have to pay sales tax on the freight component on any goods delivered to the country. I would suggest that, interestingly, the Government here is in fact taxing a tax. That is something that has been concerning country people for a number of years, yet to date no government seems to have been prepared to address the problem. I raise the matter again tonight because it causes a lot of concern among country people to see sales tax levied on the freight of goods in the country. As I said, it is a tax on a tax. I would also like to talk briefly about energy research and development. While the Government has committed $8 1/2m to new energy research projects under the national energy research, development and demonstration program this, in fact, represents a drop from the $13.7m spent in 1985-86. It represents a nominal decrease of 32 per cent. Mr Beale —How much? Mr HAWKER —Thirty-two per cent. In fact, we see quite a dramatic cut in this funding. All of this is taking place at a time when our energy reserves are running out, when we will have an enormous balance of payments problem because we will have to import more oil, with the resulting enormous effect this will have on Budget revenue as our oil reserves decline, and yet the Government is not prepared to spend a sensible amount on energy research. In conclusion, I would like to say that I support the amendments to be moved by the Leader of the National Party of Australia (Mr Sinclair). I feel that the Government has made a grave error of judgment in proposing to introduce this new tax. It will do nothing to help reverse the enormous problem we face with declining oil exploration and declining oil reserves. Dr THEOPHANOUS(Calwell)(8.03) —I am pleased that the Petroleum Resource Rent Tax Assessment Bill 1987 and cognate Bills finally have come before the House and that we have a chance to debate them. Let me say that the issue of the resource rent tax has been around ever since I was elected to Parliament seven years ago. Indeed, that was something discussed even prior to that time. I remember that during my first two years as a member of Parliament, when the Australian Labor Party was in opposition, we heard a lot about resources and resource development. Madam Speaker, since this debate has been a wide-ranging debate, if you permit I will range over this matter as well. Unfortunately, the Opposition seems to have a very short memory in relation to what its members were saying was going to constitute a massive resources boom in this country. I remember during the election campaign of 1980 that the Fraser Government, both during that time and after the election, proposed that there would be $30 billion of resources development in Australia. The Fraser Government said that natural resources were going to be the saving grace of this country and that we could forget about manufacturing and other areas of enterprise; it was all going to be resources and resource development. What we saw then was a blind faith in resource development as the way to go forward, with no heed of those value added industries such as the manufacturing industries. It was during that period in 1981-82 that the Fraser Government put in place those disastrous policies which virtually destroyed our manufacturing sector. The honourable member for Charlton (Mr Robert Brown) who has just come into the House will remember that the Fraser Government believed that this would be so and kept telling the Australian people that everything would be saved by raw materials, and by natural resources. Mr Robert Brown —The big resource boom. Dr THEOPHANOUS —Yes, the big resource boom. The Fraser Government said that there was no need for us to look at these other areas of enterprise. Of course, it was during that period that a quarter of a million jobs were lost in manufacturing because of the resources boom myth. Of course part of that resources development concerned the petroleum sector. At that time we were told that Australia's petroleum resources and potential petroleum resources were infinite. We were told this by the very same honourable members who today in this House are saying, `Shock, horror, it is going to run out by 1992', or something like that. This is the very same party whose members, without knowing what they were talking about, went to the people in 1980 and said that the resources boom would occur and that we would have infinite petroleum resources. Let me say in relation to this matter that the arguments we have heard from the Opposition this afternoon and tonight in regard to these Bills are bogus arguments. What sort of arguments have we heard? We have heard that the petroleum producers do not want the resource rent tax. That is one argument we have heard presented. However, the petroleum producers do not want the existing forms of taxation either. That is the point. They do not want to be touched by taxation at all. If we follow the logic of that argument we would end up with a situation where we would not have any taxation revenue from those companies whatsoever, or very minimal taxation revenue. That is a totally unacceptable situation given that these producers are taking out a natural resource from this country. Not only that, as we know from what has happened in Queensland for example, if the Federal Government does not have a uniform tax on a major mineral resource, the States will themselves impose a tax such as the enormous taxes which are imposed on coal in Queensland. In fact, the Federal Government merely loses out on something which should be its priority as a national Government. Therefore, let us not hear any more of this nonsense from the Opposition to the effect that the resource rent tax is unwanted by the industry. Of course, industry producers are not going to want such a tax. However, they do not want the existing forms of taxation either. In fact, if they are forced into a situation in which they have to choose between the existing forms of taxation and the proposed resource rent taxation they will reluctantly say that they prefer the resource rent tax. All we have to do is to look to history to see why this is the case. The previous forms of taxation were a tax on production. There was a tax on the amount produced, irrespective of the price achieved, profitability or, whether in fact, one could make money or how much money one did make. To suggest that it is wrong to replace that with a rational tax, which is a tax on profits, is incorrect. The supposed defenders of the private enterprise system come in here and say, `It is better to have a tax on production rather than a resource rent tax'. I do not know who determines policy on the part of the Opposition but honourable members opposite do not know what they are talking about when they argue in this way. Let me say quite clearly that the resource rent tax is a fair means of taxation provided-this is a very important provision, of which I would like the Minister for Primary Industries and Energy (Mr Kerin) to take note-that the reporting by these companies of their actual levels of profitability is correct. What we have been getting in recent times is some pretty tough evidence, and the most recent is an article in the Sydney Morning Herald on Saturday by Colleen Ryan. The article seems to expose misbehaviour on the part of companies in not paying their taxes or reporting the real level of their profitability. That point is important when looking at the revenue of the Commonwealth. I agree with the replacement of the existing taxes on production with the resources rent tax, but let us not see it be abused by people in the sense that they do not report the real levels of their profitability. It is very important that we take note of some of the things that have been happening in relation to the reporting of levels of profitability by companies in recent times. Unfortunately, the amount of tax being paid by companies in recent times, especially by some of the more well-know entrepreneurs, and what have you, has not been particularly good. In a chart provided by the Sydney Morning Herald, for example, we see that companies like Adelaide Steamship Co. Ltd paid 0.18 per cent taxation this year, compared with 25.87 per cent last year. What a dramatic drop! Dr Klugman —They must have had a terrible accountant the year before. Dr THEOPHANOUS —The honourable member mentions the fact that one can get a good accountant who can organise accounts in such a way that one does not have to pay much company tax. The fact of the matter is that we have a situation in this country where, if we are going to have a fair resources rent tax, it becomes very important that that tax be exercised in the correct way, and that means that companies must report the true level of their profitability. The Government will have to watch this, otherwise we might find abuse of the new system by companies and corporations which will behave like Mr Bond, who has recently announced that he is paying $41m in salary packages to his top executives. That comes off the declared profitability. Mr Robert Brown —All deducted. Dr THEOPHANOUS —All deducted from profitability. Mr Ian Cameron —What is wrong with that? Dr THEOPHANOUS —What is wrong with that? The honourable member is the person who talks about workers not having wage increases, or having only small wage increases, and now he is trying to justify the payment of $41m to the top executives of a corporation. It is outrageous, and typical of the double standards coming from the honourable member for Maranoa (Mr Ian Cameron). We understand one thing clearly. The Opposition wants to create two classes in the society-a class which has to abide by the rules and bear the burdens and sacrifices and a class that is supposed to be above all of that. I say to the Minister and the Government that if the resources rent tax is to operate, it has to be imposed on the real level of profitability of these corporations, otherwise the Government will not get the revenue that it deserves. It is a serious step to move from a tax imposed on the levels of production to a tax of this kind. It is a generous gesture to corporations, contrary to what the Opposition is saying, but they must not abuse that gesture, and must pay according to the real level of profitability. This point was picked up way back in 1971 by no less than the Chairman of Conzinc Riotinto of Australia Ltd, Sir Maurice Mawby, who said about this matter: In addition to the taxes which the mining industry pays in common with all other forms of enterprise in Australia, the industry is required to pay royalties. These are virtually a turnover tax imposed on only one other industry-sawmilling. He went on to object to that, and continued: Where royalties and freight charges such as these retard the processes of creating new basic resources or distort the pattern of industrial development, they are not in the best interests of our community. He went on to object to this proposal. Then he came out in support of the idea of a tax based on the profitability of enterprise-a resources rent tax. We have had the Opposition trying to claim that we do not need a resources rent tax because it will slow down exploration. What rubbish! What we have had in the last few years, I remind honourable members opposite, is a tax on turnover, on production. If they think that that does not slow down exploration, when a company explores and discovers something-- Mr Ian Cameron —They both do. Madam SPEAKER —Order! The honourable member for Maranoa must not interject at will. Dr THEOPHANOUS —Madam Speaker, the honourable member for Maranoa has put the finger on it. He wants a position where there are no taxes on oil companies at all. I do not know whether he has shares in oil companies or what-- Madam SPEAKER —Order! The honourable member for Calwell will not cast aspersions on the honourable member for Maranoa. Dr THEOPHANOUS —I withdraw that comment, but I have been provoked by the honourable member for Maranoa because he says we should have no taxes on oil companies. It is absurd to suggest that there should be no taxes on a natural resource like oil. How would one fund the services of the Government without a tax on petroleum, for example, something introduced by the previous Liberal Government? Mr McGauran —It is how you tax them, not if you tax them. Dr THEOPHANOUS —The honourable member does not want a tax on production or a resources rent tax. What tax does he want? Mr McGauran —A low tax. Dr THEOPHANOUS —He wants a low tax. Honourable members opposite obviously do not know what they want and have not even thought through the economic implications of what they are talking about in the proposed amendments. Mr McGauran —We want royalties. Dr THEOPHANOUS —Oh, you want royalties. Madam SPEAKER —Order! The honourable member for Calwell would do well to ignore the interjections. The honourable member for Gippsland would do well not to interject and I remind the honourable member for Bass that he is not sitting in his own seat. Dr THEOPHANOUS —If Opposition members think that the petroleum sector wants increased royalties, or the royalty regime continued instead of the resources rent tax, then they have not spoken to the people in that sector. People in the resources sector want a tax based on profitability and, as I said, such a tax is good on equity grounds because the more profits that a company makes-- Mr McGauran —The less it has to invest. Madam SPEAKER —Order! The honourable member for Gippsland will not interject again. Dr THEOPHANOUS —What can one say about economic illiterates? The principle of the resources rent tax is that the more profit a company makes, the more tax it pays. Therefore, if there is more exploration, and if the company makes money out of the exploration, it pays more tax. If it loses money, it does not pay the resources rent tax. On the other hand, if it makes money out of the exploration, if it finds more oil and the oil is developed, then the resources rent tax is paid. As I said, that is the correct approach which should be taken, and it is the approach which we support. I conclude by asking the Government once again to look at the situation in relation to ensuring that when we move from one tax to another we will not end up with the situation where companies will be able to avoid paying the correct level of tax by not declaring the real level of profitability as is unfortunately already happening in Australia with a number of companies that are not paying their fair share. Mr Cadman —Which companies? Dr THEOPHANOUS —I am not going to name the companies. They are in the Sydney Morning Herald article. I will table it if the honourable member likes. I turn in conclusion to what I said when I began my speech: the Opposition has had no idea in terms of the role of resources development in this country. When the honourable member for Charlton (Mr Robert Brown) and I came into this House the saviour of Australia was going to be the big resources boom. What rubbish! Opposition members went to the people and promised $30 billion worth of resources development-forget about manufacturing and all the other enterprises. That hope was destroyed and confidence was undermined. The previous Government created a massive crisis in this country because it did nothing to develop the manufacturing and services sectors of industry which we needed. Australia could have avoided many of its balance of payments problems had the previous Government taken care in relation to this matter. Many of our balance of payments problems were created by the previous Government's excessive reliance on the resources sector and the myths which it created about the resources boom. Now Opposition members say petrol will run out by 1992. Mr McGauran —True. Dr THEOPHANOUS —The honourable member should have been here when Malcolm Fraser said that our petrol supplies would last indefinitely. The honourable member for McMillan (Mr Cunningham) was here at that time and he remembers all of those statements. Let us be perfectly clear that the Opposition has no resources strategy. It has no idea of the correct role of resources development in the whole context of the Australian economy. Unless the Opposition gets its act together in relation to the balanced development of the Australian economy, with the correct place for resources development, it will not be in a position to put before the Australian people a coherent approach to the national economy. Mr IAN CAMERON(Maranoa)(8.22) —I would like to speak to this legislation. Before I do, I point out to the House that the honourable member for Calwell (Dr Theophanous) is way off track. He does not know what he is talking about. He was blurping away in his usual economic jargon through his moustache. He is not too sure just where he stands. He is taxing industries to death before they are able to get up on their own two feet and to have a go. Dr Theophanous —Ha! Mr IAN CAMERON —It is true. Mr Robert Brown —It is not true. Mr IAN CAMERON —It is true. Madam Speaker, Australia is facing a crisis in its economic well-being. We have record trade deficits, a record low in the level of the dollar, record interest payments, record overseas borrowings and a record slump in shares-and that includes the price of oil shares. Companies depend on the price of their shares to raise capital on the equity markets throughout the world. We have seen a record slump in those prices. Yet what do we see here tonight? The Australian Labor Party Government has introduced yet more income tax Bills-more taxes on production. Companies are trying to get up and get going and what do we see? More taxes, Andrew; you agree with me. That is what it is about: your Government is introducing more and more and more taxes. The oil industry has suffered from capital gains taxes and fringe benefits taxes. Mr McGauran —Company tax. Mr IAN CAMERON —Company tax has risen from 40c in the dollar to 49c in the dollar. Dr Theophanous —What rubbish! They are not even paying their taxes. Mr IAN CAMERON —They are paying taxes. Madam Speaker, oil exploration in Australia is at a record low. We have massive imbalances in our trade. We will be paying out somewhere between $3 billion and $7 billion a year to import crude oil if oil companies are not encouraged to get out to look for more product. What we need in this country is more product, new fields. And what do you people do? You come in here and introduce new taxes. These are up front taxes on companies. It is just like the auctioning of radio licences you were talking about last week which this week you have dropped. It is like the taxes you have introduced on the new fields with cash bidding for oil companies. Not only do they have to get out there and compete against one another in an auction system and pay cash down before they even get an exploration permit to explore; having got that, if they are lucky they might find oil. One out of 10 happens to find a bit of oil. The companies having found the product, you then introduce another tax, a resource rent tax on top of the-- Madam SPEAKER —Order! Will the honourable member please speak through the Chair. Mr IAN CAMERON —Madam Speaker, you know what this Labor Government is doing: it is continuing to introduce more and more revenue measures to satisfy the socialists and the left wing of the Labor Party, of which Andrew is a member. That is what they are on about-to continue down the socialist track to finance the welfare state. That is why Australia today is bankrupt. Mr Robert Brown —Rubbish! Mr IAN CAMERON —It is not rubbish, Bob. You know as well as I do that Australia today is bankrupt. These free enterprise Australian companies such as Ampol and other companies that are prepared to come to Australia are prepared to look for product. And what do you do? You turn around and tax them to death before they are even allowed to get out to look for the product. Australia has been self-sufficient in oil. Previous governments encouraged oil exploration companies to come to Australia; they were actually paid a subsidy to look for the product. They found the product. The companies having found the product, governments are not satisfied; they wish to tax them. We are totally opposed to the resource rent tax. It is a nonsense. We believe the Government can collect enough tax through company tax, capital gains tax, fringe benefits tax and personal taxation on the people employed to work on the fields. High risk off-shore rigs are operating 24 hours a day in the Gippsland Basin. The honourable member for Gippsland (Mr McGauran) is here beside me. Most of those areas are within his electorate. The Broken Hill Proprietary Co. Ltd has discovered new fields off the north-west coast of Australia. People working on the rigs earn big money and they pay big taxes, Andrew, and you know that. It is a nonsense to say they do not pay taxes. Over 40 per cent of the tax take of this nation is indirect taxation-sales taxes, for instance. Every bit of product that these oil companies buy to service their rigs-- Dr Theophanous —Who pays that? Mr IAN CAMERON —The company does. The company pays sales tax. On every bit of product that the company buys the company pays some form of taxation. But no, that does not satisfy you of the left wing. You want more taxes. You want to kill them. Just look at the figures on exploration. The level is way down, Madam Speaker. There is nobody out there exploring. I have the Cooper Basin in the south-western part of my electorate and the Jackson oil field. I have Roma where the first oil in Australia was discovered. The charter operators, the drillers, the roughnecks who are flown backwards and forwards to these isolated fields and the dozer drivers who doze the tracks so that the seismic crews can bomb the field up to try to find oil-all these people have seen a dramatic downturn. The honourable member for Gippsland has given me a graph which shows this in black and white. Look at it. From the 1983 level when Labor came to office it has fallen to 1987's level. There is nothing left, Andrew. There is hardly a damn thing left. Look at that. It is disgraceful. You ought to be disgraced. Bob, you should be ashamed of the Government. Madam SPEAKER —Order! The honourable member for Maranoa will cease addressing the honourable member for Calwell as Andrew. He will observe the Standing Orders of the House. Mr IAN CAMERON —Madam Speaker, you can see the graph. Just take a look at it. That is the sort of situation, Andrew. Andrew, you are not looking. Madam SPEAKER —Order! The honourable member for Maranoa will address the honour- able member for Calwell as the honourable member for Calwell. Mr IAN CAMERON —I have got to get this message to the honourable member for Calwell, Madam Speaker. Madam SPEAKER —I am trying to get a message through to you. Mr IAN CAMERON —Look, he cannot see it in black and white; I will have to bring the next one in colour. That is the problem with you. But there it is in black and white. Just take a look at the graph. You ought to be ashamed of yourself, Andrew, absolutely ashamed of yourself. Look at it. Where is your Prime Minister? Where is Bob Hawke? Oh, there is the Bob Hawke of the bush, the Minister for Primary Industries and Energy (Mr Kerin). Where is the Prime Minister anyway? What is wrong with him lately? He is not around. Madam Speaker, I would like to table this graph on the off-shore exploration, which has fallen since 1983-- Madam SPEAKER —Order! Are you seeking leave to table it? Mr IAN CAMERON —I am seeking leave to table this graph, Madam Speaker. Madam SPEAKER —Is leave granted? Mr Kerin —I have not yet seen it. Madam SPEAKER —The Minister has not yet had the courtesy of being shown it. Mr IAN CAMERON —He cannot read but he can probably read a graph. Madam SPEAKER —While it is a little quiet I again suggest that the honourable member for Maranoa abide by the Standing Orders and address honourable members by their electorates and not by their Christian names. Leave not granted. Mr IAN CAMERON —Madam Speaker, I would like the Government side of the House to understand that I represent a large area for oil exploration in Australia, the Cooper Basin area, which is as big as Victoria. We have seen a tremendous downturn in exploration activity. The companies involved in this activity employ good, solid Australian citizens, and that is what we are on about. There are too many people in this country on the dole and sitting around doing nothing. The honourable member for Calwell is encouraging that by introducing more taxes. These companies that wish to do some work and look for a product are not allowed to do so because of the prohibitive taxation regime which the Government of which the Minister for Primary Industries and Energy is a member-Hawke and Co.-has put in place. It has imposed capital gains taxes on these companies. It is a disgrace. Not only is that happening, but also the drop in the value of the dollar in the last week will force up the price of petrol. It will go up by at least 3c a litre. The Prime Minister told us on a number of occasions that the price of petrol would drop. But what will happen? The honourable member for Calwell knows only too well that because the level of the Australian dollar is going down, under our parity pricing arrangements the price of petroleum will go up. The Australian people will have to suffer yet another in-built tax. Companies are being asked tonight to pay an extra tax-a resource rent tax-on oil that they may or may not find. They must first be prepared to cash bid for a lease in order to drill for oil, then, if they are lucky enough to find product, they will be taxed by way of a resource rent tax, over and above all the other taxes that they are expected to pay. Dr Theophanous —Only when they make a profit. Mr IAN CAMERON —I say to the professor that he is an economist. He knows that this will not encourage business. The more that one taxes companies, the harder it is for them to get into business. I am sick to death of it. How on earth can we do this in a period of recession? We should be encouraging companies to get out and do the job. We should not be taxing them before they even start their work. That is what we are doing in this country. Government members interjecting- Mr IAN CAMERON —That is true. We are taxing them to death before they even have the chance to get out and do some work. Why are all the major figures down? Why is the trade balance down? The Minister has been travelling the world of late. He knows what our trade position is. Our trade balance is horrific. Our trade balance is down the drain to the tune of a billion dollars a month. What will happen in this recession? The position regarding the American trade balance is the same. America will have to restrict imports, and we will all suffer because there will be a clamp-down. There will be a minor recession-a minor recession, not a major one-because of the action America will have to take. Australia will have to do the same thing. We will have to do more than we are doing to restrict imports. The honourable member for Calwell will understand in regard to our trade balance that oil is a very big component of our trade. We are actually exporting as much product as we are importing. We should encourage companies to find new product. Because of the taxation measures that the Government is introducing, two or three years down the track we will have to increase our imports of crude oil at a tremendous rate. That means that our balance of trade will again go down the mine. The Minister knows that the figure is $3 billion to $5 billion. He knows only too well that if we do not find more oil product, we are history as far as oil supplies are concerned. We will have to import crude from Indonesia. We cannot rely on it; one would not know when it would blow up next. Indonesia and the Philippines-- Government members interjecting- Mr IAN CAMERON —It is true. One would not know when it will blow up. The Middle East-- Dr Theophanous —Have you spoken to the Indonesian Ambassador? Mr IAN CAMERON —I say to the honourable member that there is a gunboat sailing up and down the canal in the Middle East at this moment. What about the United States and the Soviet Union, and Iran and Iraq? The biggest reserves of oil in the world are about to blow sky high, yet we are fiddling while Rome burns. These fools on the Government side, including the honourable member for Calwell, support this legislation. He wants to introduce more and more taxation. It is a disgrace to the Australian economy, and the honourable member ought to be ashamed of himself. The value of the dollar is going down. The Reserve Bank of Australia is daily trying to prop up the dollar. It spent a billion dollars yesterday trying to prop up the dollar. The dollar is too dear. It will go down even further. I reckon that the level of the Australian dollar will end up at about 55c to 50c. That is its real value. The Reserve Bank is propping it up, but it will go down below 65c because it is not worth that amount. Having regard to our balance of trade and the problems that we face with respect to trade, our dollar is not worth that amount. It will go down, and when it goes down the price of petroleum, under the resource rent tax regime, will go up. It will not go up by 3c; it will go up by 6c or even more under the regime that this Government is prepared to keep in place. I know that this legislation contains a lot of detail. I have been asked by the Whip not to talk for too long. It is a bit of a habit of us politicians to go on a bit. It would like to say how keen I am to keep the companies that are operating in my electorate looking for the product. The Moonie oil field is very close to where I live. It was one of the first commercial oil fields, but it has just about run out of oil. Most of the stuff that is coming out of the ground now is water. There is not much oil left; a lot of water is being pumped out. No doubt the Bass Strait off-shore fields will end up pretty much the same. The Bodella field, a new field near Quilpie, has come into production of late. Those boys are working day and night. There are no roads. I wish that the Minister for Land Transport and Infrastructure Support (Mr Duncan) were here. I would ask him for a few more of the dollars that were mentioned during Question Time today so that some of the roads in my electorate could be upgraded. There are no roads in south-western Queensland. In the Channel Country vehicles must plough through three or four feet of bulldust all the time. I say to the Minister that what we need is some more money, Federal grants, to help these people to look for product. It is easy for those companies who operate off-shore. They can sail around in boats; they do not have to use roads. If one is looking for oil on the mainland, one must have a good road system. That is most important to allow these companies to operate properly. Good roads and good airfields are important because the workers, the roughnecks, fly in for a week or 10 days and fly out again. Madam Speaker, I know that others wish to speak in this debate. I have much pleasure in opposing the four pieces of legislation. I am totally opposed to this type of taxation and I believe the legislation should be thrown out of the House. Mr KERIN(Werriwa-Minister for Primary Industries and Energy)(8.38) —in reply-Several Opposition members have invited me to make comments on the points that they have made. I thank the honourable member for Bendigo (Mr Brumby), the honourable member for Macarthur (Mr Martin) and the honourable member for Calwell (Dr Theophanous), who made very incisive and sensible comments about the whole question of the resource rent tax (RRT). It is pretty obvious that the honourable member for Bass (Mr Smith) has studied the issue a lot more closely than his colleague the Leader of the National Party of Australia (Mr Sinclair), who made several ideological points and some personal criticism. Let us not deny-I certainly do not-that ideological reasons do come into political decision making. That is why we have political parties and that is why powerful ideologies, such as conservatism or whatever, hold sway. Frankly, conservatism holds sway in all parties in this Parliament. But what one has to do in government is sort out policies and principles, despite one's ideological position. That is what this Government set about doing when it came into office. It tried to work out the best taxation regime for this industry. What is alarming about the Opposition's contribution is that it is pretty clear that it has no policy on this issue whatsoever. If the honour- able member for Maranoa (Mr Ian Cameron) can be taken as a guide, we have a pretty fair idea of the sort of nonsensical propositions that are likely to emanate from the Opposition. He reminded me of one of the new committees I became aware of when I gained this portfolio-the crude allocations committee. I think he would be a very good candidate for that committee. What is the Opposition's policy? Where is it? Does it want more excise and royalty? It was clearly indicated by the points made by members of the Opposition that they are very much prey to lobby groups. The Opposition, using a mixture of ideological, irresponsible and often mildly contradictory arguments, is mainly picking up a bit of all the cases being put forward by the various lobby groups. That is about all that came forward. Of course, we must accept, particularly after the remarks of the honourable member for Maranoa, that many National Party members are a little past it. The man whom the National Party now wants to dump, the Premier of Queensland, is the man the National Party could not resist when he split the coalition, split the National Party and destabilised the Liberal Party only a few months ago. He has not changed much, but the Nationals want to get rid of him now. Why? Because neither the National Party nor the Liberal Party-- Mr Ian Cameron —On a point of order, Madam Speaker, I ask you to direct the Minister back to the subject of the Bill and to get away from the Premier of Queensland. I do not know whether he has much to do with the Bill. Madam SPEAKER —Order! The Chair is in an awkward position. I have not sat through the entire debate, but I must say that while I have been here it has been a very far-ranging debate. Mr KERIN —National Party members could not resist this man from the north because neither the Liberal Party nor the National Party had or has now enough consistency and continuity to resist the approach of a demagogue with a few simplistic nostrums. These same grand solutions persuade only one person now-Senator Stone. Let me turn now to tax; I will get back to the topic. Honourable members opposite could not agree about any sort of taxation, even personal taxation, at the recent election. Now the new Federal President of the Liberal Party wants a consumption tax. He had his horns pulled in pretty quickly. I guess that he really wants the tax to suit his business interests. That is the sort of nonsense that we get from honourable members opposite-they are prey to lobby groups and they run this case and that case with no consistency or continuity. Let us focus on what the Bills are. They are part of a package of legislation applying to the crude oil and petroleum industries in this country. The resource rent tax is about one principle-that is, whether or not the community has the right to the rent from a scarce non-renewable resource where it is clear super-profits are to be made. The resource rent tax is a profits based tax which efficiently and equitably collects for the community a fair return for exploitation of the community's non-renewable petroleum resources. It replaces excise and royalty for some fields. What the Opposition chooses to ignore is what we are doing in the other areas. For administrative efficiency we have cash bidding for areas of high prospectivity-none of that mad regulation that the Opposition seems prone to want all the time. We have an excise holiday for any field of less than 30 million barrels. In other words, from the sorts of oil fields we have, effectively no excise is paid on-shore. We have staged reductions in the top excise rate levels in the Bass Strait. We have deregulated the crude oil market, which allows oil to be sold or exported by companies to their maximum advantage. They take the decision. The Leader of the National Party talks about ideology. I ask him: Resource rent tax compared with what? The excise royalty regime that his Government introduced, which takes more regardless of profitability, which discourages companies from getting the maximum flow from the wells? If the profitability declines, the resource rent tax disappears. Under the regime which the Opposition proposes, if it wants to stick to the status quo-it has not made it clear what it wants to stick to-excise and royalty will be paid no matter what profitability exists. The old regime is to be replaced. That must be taken into account with the other things we are doing for this industry. Taking into account Australia's prospectivity and likelihood of off-shore finds, the resource rent tax is a much better regime. Let us work it out. The companies have to make a 29 per cent return before they pay anything-after all eligible expenditure has been claimed, which can be compounded forward. Even shut-down expenditure is deductible. They have a 10-year straight line depreciation deductibility and a 40 per cent tax rate, which is deductible for company tax purposes. That is why it is a better regime than the one the Opposition proposes-the status quo, if that is what it wants. Let us look at the resource rent tax compared with taxation regimes overseas and compared with the status quo. We have done calculations in the Department-they were done when Senator Evans was Minister, so this has been around for a long time; it is another turn on the hurdy-gurdy for the Opposition to come in as if it did not understand it all and repeat the same tired old vapid arguments-which take into account the regimes in the United Kingdom (UK), the United States of America (USA), Norway, Canada and Indonesia and put them against a 20 million barrel field, a 100 million barrel field and a 200 million barrel field. If one looks at the net value of real returns to companies, the net present value analysis of effective real government take, one sees that the resource rent tax is consistently less onerous on the companies than is the excise royalty system. Compared with other countries, we are in the middle range of the take. Sometimes other countries take more and sometimes they take less. I guess what this is all about, and the reason the Opposition so blithely picks up the Australian Petroleum Exploration Association brief, is risk. We have consulted the industry. There is a general agreement that Australia's petroleum prospectivity is less encouraging than that of many other countries. However, the Government does not accept that exploration decisions are based on country-wide or basin-wide assessments of prospectivity. Rather, the decision to explore a title area is dictated in terms of prospectivity by the probability of finding attractive drilling targets and the expected outcome of those targets. In this respect, Australia offers the broad spectrum of opportunities from the highly prospective to the very poor. What differentiates Australia from the other countries included in the comparative analysis to which I have just referred is that our geology offers far fewer opportunities to acquire highly prospective title areas. In the Government's view, by comparing average country wide prospectivity, the industry has erroneously reached the conclusion that there should be no petroleum taxation applied to new petroleum discoveries in order to restore Australia's relative attractiveness. We simply reject that. The Government disputes industry claims that the resource rent tax and cash bidding policies can be blamed for the decline in off-shore exploration activity since the record level achieved in 1983. The figures show that, in terms of on-shore exploration, we are getting close to the record. The estimate for 1987 is 214 wells. The highest number, in 1985, was 227. So we are only 13 wells short. Mr Ian Cameron —It is cheaper to look off-shore. That is why they are looking off-shore. Mr KERIN —That is right. But it makes sense. There is no sense in honourable gentlemen opposite talking about off-shore in the same vein as on-shore exploration. If one looks at the experience of other countries one gets the same picture. The reality is that the price of oil is the main determinant of exploration activity. Trends in Australian exploration activity are similar to those being experienced elsewhere in the world-namely, a dramatic fall in activity during 1986 in response to falling oil prices, followed by signs of recovery on-shore but subdued activity off-shore in 1987. It is the collapse in oil prices, not resource rent tax and not cash bidding, which is the major inhibiting factor to off-shore exploration in Australia. The industry often cites Canada, the UK and the United States in its comparisons with Australia. We have no argument with the judgment that Australia's prospectivity for oil is, on average, far lower than that of those countries, but we reject the suggestion that the industry in Australia is worse off because of RRT and cash bidding. In Canada, on-shore exploration in 1987 is expected to approach the level achieved in 1986, which was 38 per cent down on the level achieved in 1985. I will not go through the figures, but exploration in the US was down 46 per cent. Salomon Brothers Inc. has forecast a further decline of around 4 per cent. That is occurring in a country that is highly prospective. What the Opposition cannot face is that the price of oil is the main determinant. In my consultations with the oil companies, they have all agreed with that. Another point raised by the Opposition is that the circumstances have changed. It wants us to change our policy on the basis of the Dow Jones index which changes daily. It wants us to change our policy on the basis of speculation. It does not want us to change, it does not want the industry to be allowed to change and it does not want deregulation on the basis of oil prices. It somehow thinks that if we have no taxation for this industry it will magically explore and find a lot more oil. It is not game to say that it will not tax this industry at all. As I said, we do not know what its policy is. The Opposition said that the Australian Labor Party delayed for 10 years putting this tax into effect. Actually, we were not in government until 1983. From that point on we have had extensive consultations with industry. It was after a very long period of consultation that we came to the various policy options and the policy put forward in these Bills. Of all the options put before the various companies in terms of threshold rates, tax rate and exploration deductibility, this was the option that was agreed to by industry. It is a negotiated position. There has been a lot of nonsense spoken here tonight, but this is something that the House has been familiar with for a long time and there have been very extensive debates in both Houses of Parliament. I finish by listing some of the nonsense spoken about the Jabiru-Challis area. Challis was put in with Jabiru which gave the Broken Hill Proprietary Co. Ltd, if anything, an effective tax break, but it was not because of proximity; it was because it was in the one exploration area. BHP has said that just royalties-forget about excise-would have been enough to stop that project from going ahead. The reason for that is that the resource rent tax is a lot fairer secondary tax on any of these companies. It allows all the deductibility to be put aside before they start paying tax. In terms of the small fields where there is very big wind up or start up costs this regime is very fair. As to the broader questions raised by the honourable member for Bass concerning wider deductability, as I have already explained, this is a negotiated position which we have arrived at with the companies in terms of the threshold, in terms of the tax rate and in terms of the whole bracket of deductabilities which I have already said are very generous indeed. Question put: That the Bill be now read a second time. The House divided. (Madam Speaker-Hon. Joan Child) Ayes . . . . . . . . . . . 75 Noes . . . . . . . . . . . 57 —— Majority . . . . . . . . . 18 —— Baldwin, P. J. Johns, G. T.Beazley, K. C. Kelly, R. J.Beddall, D. P. Kent, L.Bilney, G. N. Kerin, J. C.Blanchard, C. A. Kerr, D. J. C.Blewett, N. Klugman, R. E.Bowen, Lionel Lamb, A. H. (Teller)Brown, Robert Lavarch, M. H.Brumby, J. M. Lee, M. J.Campbell, G. Lindsay, E. J.Charles, D. E. McHugh, J.Charlesworth, R. I. McLeay, LeoCleeland, P. R. Martin, S. P.Courtice, B. W. Mildren, J. B.Crawford, M. C. Milton, P.Cross, M. D. Morris, AllanCunningham, B. T. (Teller) Morris, PeterDarling, E. E. Mountford, J. G.Dawkins, J. S. O'Keefe, N. P.Dubois, S. C. O'Neil, L. R. T.Duffy, M. J. Price, L. R. S.Duncan, P. Punch, G. F.Edwards, Ronald Saunderson, J.Fatin, W. F. Scholes, G. G. D.Fitzgibbon, E. J. Sciacca, C.Free, R. V. Scott, J. L.Gayler, J. Simmons, D. W.Gear, G. Snow, J. H.Gorman, R. N. J. Snowdon, W. E.Grace, E. L. Staples, P. R.Griffiths, A. G. Theophanous, A. C.Hand, G. L. Tickner, R. E.Hollis, C. Uren, T.Howe, B. L. West, S. J.Humphreys, B. C. Willis, R.Hurford, C. J. Wright, K. W.Jakobsen, C. A. Young, M. J.Jenkins, H. A. Adermann, A. E. Lloyd, B.Aldred, K. J. McArthur, F. S.Andrew, J. N. (Teller) McGauran, P. J.Beale, J. H. MacKellar, M. J. R.Blunt, C. W. Macphee, I. M.Braithwaite, R. A. Miles, C. G.Brown, N. A. Millar, P.C.Cadman, A. G. Moore, J. C.Cameron, Donald Nehl, G. B.Cameron, Ewen Peacock, A. S.Cameron, Ian Porter, J. R.Carlton, J. J. Prosser, J. D.Cobb, M. R. Reith, P. K.Connolly, D. M. Rocher, A. C.Cowan, D. B. Ruddock, P. M.Downer, A. J. G. Shack, P. D.Edwards, Harry Sharp, J. R.Fife, W. C. Shipton, R. F.Fischer, Tim Sinclair, I. McC.Fisher, Peter Smith, W. L.Goodluck, B. J. Spender, J. M.Hall, Steele Sullivan, K. J.Halverson, R. G. Tuckey, C. W.Hawker, D. P. M. Webster, A. P.Hewson, J. R. White, P. N. D.Hicks, N. J. (Teller) Wilson, I. B. C.Hunt, R. J. D. Woods, R. L.Jull, D. F. Wooldridge, M. R. L.Katter, R. C. Jones, Barry Burr, M. A.Brown, John Dobie, J. D. M. Question resolved in the affirmative. Bill read a second time. The Bill. Mr SINCLAIR(New England-Leader of the National Party of Australia)(9.00) —by leave-I move: (1) Clause 2, page 2, after the definition of ``Deputy Commissioner'' insert the following definition: `` `eligible exploration permit area' means an exploration permit area other than an exploration permit area constituted by blocks that are the subject of a permit to which a production licence in force on or before 1 July 1984 was related;''. (2) Clause 2, page 3, after the definition of ``excluded fee'' insert the following definition: `` `exploration for petroleum' means any exploration carried on in any eligible exploration permit area, retention lease area or qualifying production licence area;''. (3) Clause 2, page 5, after the definition of ``project combination certificate'' insert the following definition: `` `qualifying production licence area' means a production licence area constituted by blocks that are the subject of a production licence that came into force after 1 July 1984;''. (4) Clause 5, pages 7 and 8, omit the clause, substitute the following clause: Petroleum exploration and recovery in relation to certain areas ``5. (1) For the purposes of this Act (including this section) a reference to recovery of petroleum from a production licence area, an exploration permit area or a retention lease area is a reference to recovery of petroleum from the production licence area, the exploration permit area or the retention lease area while the production licence, exploration permit or retention lease concerned is or was in force. ``(2) For the purposes of this Act, a reference to recovery of petroleum from the eligible recovery area in relation to a petroleum project is a reference to recovery of petroleum from- (a) where the production licence or any production licence in relation to the project is a permit derived production licence-the exploration permit area in relation to the exploration permit to which the production licence is related (being recovery occurring either before or after the production licence came into force but not after marketable petroleum commodities cease, otherwise than temporarily, to be produced in relation to the project); (b) where the production licence or any production licence in relation to the project is a lease derived production licence-the retention lease area in relation to the retention lease to which the production licence is related (being recovery occurring either before or after the production licence came into force but not after marketable petroleum commodities cease, otherwise than temporarily, to be produced in relation to the project); and (c) the production licence area of the production licence, or the production licence areas of the production licences, in respect of the project. ``(3) For the purposes of sub-sections (1) and (2), where, at a time when no permit derived production licence in relation to an exploration permit is in force, a retention lease that is related to the exploration permit comes into force, any recovery of petroleum that occurred while the exploration permit was in force in the block or blocks in respect of which the retention lease was granted and during the period- (a) where paragraph (b) does not apply-before the retention lease came into force; or (b) where, before the retention lease came into force, a permit derived production licence, or permit derived production licences, in relation to the exploration permit were in force-after that production licence or all of those production licences, as the case may be, ceased to be in force and before the retention lease came into force, shall be taken to have occurred in the retention lease area and not in the exploration permit area notwithstanding that the retention lease was not in force at that time. ``(4) For the purposes of sub-section (2), where, but for this sub-section, the same recovery of petroleum would be recovery of petroleum from the exploration permit area or the retention lease area in relation to 2 or more production licences, the recovery shall be taken to relate only to the production licence that first came into force.''. (5) Clause 19, page 13, line 19, after ``taken'' insert ``, subject to sub-section (2a),''. (6) Clause 19, page 13, after subclause (2) insert the following subclause: ``(2a) For the purposes of the assessment of augmented bond rate exploration expenditure or GDP factor expenditure, an eligible production licence that is specified in a project combination certificate shall be taken not to be so specified and there shall not be taken to be a combined project in relation to any eligible production licences so specified.''. (7) Clause 32, page 21, at the end of the clause add the following paragraph: ``(e) any payment made under the Petroleum (Submerged Lands) (Cash Bidding) Act 1985.''. (8) Clause 34, pages 22 and 23, omit the clause, substitute the following clause: Augmented bond rate exploration expenditure ``34. (1) For the purposes of this Act, a reference to the augmented bond rate exploration expenditure incurred by a person in a financial year in relation to a petroleum project is a reference to- (a) in relation to the first occurring petroleum project, the sum of: (i) any amount of exploration expenditure actually incurred by the person in any eligible exploration permit area in the financial year, not being expenditure incurred more than 5 years before the production licence in relation to the first occurring petroleum project came into force; (ii) any amount that is taken by sub-section (3) or sub-section 36 (1) to be augmented bond rate exploration expenditure incurred by the person in relation to the first occurring petroleum project in the financial year; and (iii) any amount that is taken by Division 5 to be augmented bond rate exploration expenditure incurred by the person in the financial year; and (b) in relation to any petroleum project other than the first occurring petroleum project-any amount that is taken by sub-section 36 (1) to be augmented bond rate exploration expenditure incurred by the person in relation to that project in the financial year. ``(2) For the purposes of this section a reference to the first occurring petroleum project is a reference to- (a) where a financial year is a year of tax in relation to a person in relation to 2 or more petroleum projects-the project in relation to which the relevant production licence first came into force; and (b) in any other case-the petroleum project in relation to which a financial year is a year of tax for a person. ``(3) For the purposes of sub-section (1), where the sum of the augmented bond rate general expenditure and the augmented bond rate exploration expenditure incurred by a person in a financial year in relation to a petroleum project exceeds the assessable receipts derived by the person in the financial year in relation to the project, an amount ascertained in accordance with the formula A (1.15 + B), where A is so much of the excess as does not exceed the amount of the augmented bond rate exploration expenditure; and B is the long-term bond rate in relation to the financial year, shall be taken to be augmented bond rate exploration expenditure incurred by the person in relation to the project on the first day of the next succeeding financial year.''. (9) clause 35, pages 23 and 24, omit subclauses (1) and (2), substitute the following subclauses: ``(1) For the purposes of this Act, a reference to the GDP factor expenditure incurred by a person in a financial year in relation to a petroleum project is a reference to the sum of- (a) in relation to the first occurring petroleum project: (i) any amount of exploration expenditure or general project expenditure actually incurred by the person in any eligible exploration permit area more than 5 years before the production licence in relation to the first occurring petroleum project came into force; (ii) any amount that is taken by sub-section (3) or sub-section 36 (1) to be GDP factor expenditure incurred by the person in relation to the first occurring petroleum project in the financial year; and (iii) any amount that is taken by Division 5 to be GDP factor expenditure incurred by the person in the financial year; and (b) in relation to any petroleum project other than the first occurring petroleum project-any amount that is taken by sub-section 36 (1) to be GDP factor expenditure incurred by the person in relation to that project in the financial year. ``(2) For the purposes of this section a reference to the first occurring petroleum project is a reference to- (a) where a financial year is a year of tax in relation to a person in relation to 2 or more petroleum projects-the project in relation to which the relevant production licence first came into force; and (b) in any other case-the petroleum project in relation to which a financial year is a year of tax for a person.''. (10) Clause 35, page 24, line 3, omit ``or (2)''. (11) Clause 36, pages 24-6, omit subclauses (1) to (3), substitute the following subclauses: ``(1) Where there is a project group in relation to a person in relation to a year of tax, the following provisions have effect: (a) in relation to any petroleum project other than the last occurring project-where there is a carry forward expenditure amount of the person in relation to the project in relation to the year of tax, that amount shall be taken to be augmented bond rate exploration expenditure or GDP factor expenditure, as the case requires, incurred by the person in the year of tax in relation to the next occurring project and the person shall not be taken by sub-section 34 (3) to have incurred augmented bond rate exploration expenditure, or by sub-section 35 (3) to have incurred GDP factor expenditure, in relation to the first-mentioned project on the first day of the next succeeding year of tax; (b) in relation to the last occurring petroleum project-where, but for this paragraph, the person would be taken by sub-section 34 (3) to have incurred an amount of augmented bond rate exploration expenditure, or by sub-section 35 (3) to have incurred an amount of GDP factor expenditure, in relation to the project on the first day of the next succeeding year of tax, that expenditure shall be taken to have been incurred instead by the person on that day in relation to the first occurring of such of the projects in relation to which the financial year is a year of tax in relation to the person as are petroleum projects on that day. ``(2) For the purposes of this section, petroleum projects in relation to a person in relation to a year of tax shall be taken to occur in the order in which the relevant production licences in relation to the projects came into force.''. (12) Clause 37, page 26, line 24, omit ``in relation to a petroleum project''. (13) Clause 37, page 26, lines 29 and 30, omit ``in the eligible exploration or recovery area in relation to the project''. (14) Clause 37, page 26, line 33, omit ``the eligible exploration or'', substitute ``an eligible exploration permit area or the eligible''. (15) Clause 37, page 26, lines 34 and 35, omit ``the project'', substitute ``a petroleum project''. (16) Clause 44, page 30, lines 28 and 29, omit ``an exploration permit,'', substitute ``a''. I have moved the amendments together and I will address them in a moment. Before I do so, I will explain two things about the response by the Minister for Primary Industries and Energy (Mr Kerin) to the second reading debate. First, the coalition parties are not locked irrevocably into a system of royalties and excise as it now applies. It should be remembered that, as a result of the initiative taken by our side of the chamber, import parity pricing was introduced-a system designed to try to facilitate a better price opportunity for exploration and production in Australia. However, we believe quite strongly that the introduction of the resource rent tax (RRT) at this time is inappropriate. It has not addressed the circumstances of increased production and exploration around Australia. Above all, the Minister, in his speech, was very prompt in addressing the apparent increase in exploration on-shore while not realising that the Petroleum Resource Rent Tax Assessment Bill applies only to off-shore exploration. The picture is quite different. I am told that at the moment only one drilling rig is spudded in. In the last 12 months only nine wells were drilled. The circumstances for exploration are very bleak. Our whole concern with this legislation is that it serves as a significant deterrent to those people who wish to try to find more oil. As my colleagues and I explained in the second reading debate, there is a necessity from the economic point of view, the employment point of view and certainly Australia's point of view, to accelerate oil exploration and discovery as soon as we possibly can. The purpose of the amendments I have just moved is to ensure that the Government realises that if it is to introduce an RRT, it should genuinely be related to profit, and those expenses reasonably incurred by exploration companies should be allowed against the RRT. I want to explain a little about how we intend to extend deductibility. The purpose of these amendments is to that end. In addition, we also seek to include those sums that have been spent by way of cash bidding to achieve an exploration permit. As I explained during my speech on the second reading, this legislation applies only to two fairly extensive but particular areas of off-shore exploration. The first is an area to the north-west of Western Australia, north-west of the Bonaparte basin, the Arafura basin and the Browse basin up to the off-shore border with Indonesia. The second is in the basin to the west of South Australia and Tasmania. In each instance there are many exploration areas. The legislation, as it is now framed, permits deductibility of expense only within the one exploration area. The Minister made a great song and dance about the fact that in north-west Western Australia at the moment, Jabiru and Challis are in the same exploration area. But there are many other exploration areas. We believe that it is essential that there be encouragement to companies to explore, not just in those areas that might have higher prospectivity, but also in other areas, to ensure that there can be a reasonable understanding of the geological base leading to a potential understanding of the oil resource. The amendments I moved are thus designed to widen the ambit of deductible exploration costs. I have explained that what qualified under the Government's legislation as augmented bond rate expenditure was restricted to that expenditure outlaid in the preceding five years in the permit for which RRT was applicable. With the amendments, this will be changed so that any exploration expenditure incurred in any RRT area and with any RRT permit qualifies as deductible expenditure. I put it to you, Mr Chairman, that that is not an unreasonable extension. It is designed to ensure that companies will not just spud in wells for the sake of deductibility. It does encourage a reasonable exploration base. If this tax is designed to be a profit-based tax, it will bring this tax back to an appropriate level. We see this tax not as a profit-based tax but as a production-based tax and it is partly for that reason that we oppose it. On a continuing basis, it was only exploration expenditure that was spent in relation to the permit that qualified for deductibility under the legislation as introduced by the Minister. The amendments change that so once there is the first discovery of oil, any exploration expenditure will qualify as augmented bond rate exploration expenditure, subject only to it being within the general areas identified for RRT purposes. I strongly put to the Minister that, if the tax is genuinely intended to provide for a reasonable profit base, these extensions will provide such a base. In addition, I suggest to the Minister that those sums spent by way of cash bidding to achieve the right to explore in these areas also should be allowed as a legitimate deduction. In my speech on the second reading I expressed concern that those items included for permissible expenditure are not sufficiently wide and that this is one way by which that can be achieved. We see the present provisions, without a widening, acting as a disincentive to exploration, as expenditures arising from unsuccessful exploration, unless the exploration area will not be able to be used to reduce RRT liability. High risk projects where the chance of discovery is small therefore will be less likely to proceed. In the petroleum industry, the major risk is incurred at the time of exploration. I quoted the low success rate for Australian wildcat off-shore wells. It is said to be about 2 per cent. In other words, there can be as many as 50 unsuccessful projects, costing anything from $5m to $9m, for every successful one. If we are genuinely intent on encouraging both an understanding of the geology of the area and encouraging exploration, we must provide some incentive for exploration. The cost of seeking resources in off-shore areas ranges over widely separated extremes. The risk of failure, in spite of the maximum effort and technical efficiency, almost always will be dependent upon natural factors which are unpredictable. The return required by an explorer must reflect not only the cost of discovery in production, but also the reward expected by investors in a high-risk venture. In my speech on the second reading, I also mentioned my concern that the cost of infrastructures is totally ignored. All that has to be taken into account in trying to encourage companies to explore. However, we are not including that in our amendment. We realise that there has to be some reasonable basis if RRT is to be adopted. While we are opposed to it, it is the responsibility of the coalition to try to make sure it works. The amendments I have moved are directed to that purpose. A petroleum company must look to offset the cost of many exploring permits. As I explained a while ago, there are something like 300 Australian shareholders and 60 to 80 major participants in drilling. Most of the exploration is done by Australian companies. We want those Australian companies to continue to explore, not just on-shore but off-shore. It is there that the prospectivity is higher. It seems to us that the amendments I moved provide a reasonable extension of the legislation and the concept that the Government has set down. However, I go back to the concern we have that the Government seems rigidly to be locked into a concept that was developed in the middle 1970s. Circumstances have changed. The world is quite different today from what it was then. The Minister claims that oil price is the only determinant of exploration. That is not so. Oil price is part of the determinant. The real determinant is the net ultimate yield to the exploring company; in other words, producer realisation-how much money the producers get back in their pockets after they have explored, exploited the well and taken off the costs associated with it. One of our concerns, in spite of all the concessions available, is that this additional 29 per cent cost will still impose too much of a disincentive. For that reason, if the Government insists on proceeding with this resource rent tax, we ask that at least it allow a reasonable range of exploration costs and that those exploration costs not be just in that one exploration area but on a wider base. I strongly put it to the Minister that, if that wider base is allowed and if cash bonus bidding is taken into account as a deductible resource rent tax expense, the amendments proposed will make this legislation so much more effective than it now is. Although we oppose the concept in the legislation, we are not opposed to all change in the area. If the Minister is genuine in his belief that this area should be profit oriented, I suggest he take serious note of the amendments I have just moved. Mr GOODLUCK(Franklin)(9.11) —I support the amendments. I compliment the Leader of the National Party of Australia (Mr Sinclair) on a very fine address, as I compliment my colleague the honourable member for Bass (Mr Smith) on his address. Mr Lloyd —You'll get on, Bruce. Mr GOODLUCK —I am not really trying to get on. I have never tried to get on. Regrettably, that is the trouble with me. Those two honourable gentlemen delivered fine addresses filled with detail. They put forward an argument that should be adopted by the Government. The honourable member for Macarthur (Mr Martin) had a bit of a tilt at me. He said to me that when the coalition Government came into power in 1975 the price of petrol in Australia was about 15.2c a litre and when we lost power it was about-- Mr Lee —Come back to the amendments, Bruce. Mr GOODLUCK —I will come back to the Bill in a moment. The honourable member alluded the other day to the fact that I had repeated a speech about 13 times. At least I am drawing attention to a few problems and a few facts pertaining to the oil industry. If we do not have development in Australia, we will go down the chute. We will be dependent on other countries for our oil supplies. The Leader of the National Party was saying that we need to carry out exploration and we need to be self-sufficient in Australia. That is the important thing. Oil is a very precious commodity. It is part of our everyday lives, and we need it. Consequently, I support the amendments. I return to the point I was making. In 1975 the price of petrol in Australia was 15.2c a litre. The coalition Government adopted a policy of import parity pricing. The Opposition of the day, the present Government, supported that policy of import parity pricing. It knew that we needed alternative sources of energy. It knew also that further exploration needed to be carried out if we in this country were to become self-sufficient in oil. That is the important thing. Regrettably some of the alternative energy sources have not been used. Liquefied petroleum gas (LPG) could have been used as an alternative source of fuel. One-quarter of the cars on the road should be powered by LPG, but that has never been achieved. People have changed to smaller cars. Of course, taxicabs use a dual fuel system. Every time I ride in a taxicab I always ask the driver whether his vehicle runs on LPG or petrol. Invariably the response is, `Thank God, I am now using LPG because it saves me about 50 per cent on my fuel costs'. The Leader of the National Party said that we in this country need to carry out exploration and that we need to look at alternative fuels so that we can become self-sufficient in the long term. That is the important thing. However, it is imperative that we offer incentives. If the oil exploration companies are not provided with incentives they will not explore for oil. I think it is accepted worldwide at present that for every well that does not proceed 50 men lose their jobs. It is important to employment and to the investors in Australia that new wells are found so that ultimately we will become self-sufficient in oil. The Minister for Primary Industries and Energy (Mr Kerin) asked me what I was on about in relation to petrol pricing in Australia. I shall tell him briefly. The Prices Surveillance Authority fixes a maximum wholesale price for petrol in every capital city. That Authority was set up by this Government and it is the Authority for which the taxpayers of Australia pay. Today the Minister for Consumer Affairs (Mr Staples) answered a question I put to him. I am a gentle soul and I allowed him to answer the question in his own way. He mentioned that the Prices Surveillance Authority examines the wholesale price of petrol. That is not so. The oil companies approach the Prices Surveillance Authority. If they can justify a price increase, the Authority grants it. The Authority fixes the maximum wholesale price throughout Australia, but that maximum wholesale price varies from State to State. Admittedly, State taxes are added to the price of petrol. What I have been driving at for a long time is that petrol is a precious commodity. Saturday's Australian newspaper carried the headline `Big petrol price rise likely in December'. That is a matter of concern to the consumers I represent, not those that Mr John Elliott purports to represent. He said that we all have to toe the line. I toe the line only for the people I represent, and that is the ordinary consumer. I get a little annoyed when it comes to my attention that people are being disadvantaged because of our lack of tenacity in facing up to the problems associated with the oil industry. The Prices Surveillance Authority fixes the maximum wholesale price of petrol. In some areas where the oil companies have heavy volume sales, they drop the price below the wholesale price. That matter ought to be looked at. We do not want a royal commission established to look at it. The last one on this subject cost about $1.5m. Two of my colleagues have said that the oil industry is ever changing. The reason we are crying out now for further exploration is that in the past five or six years the whole ball game has changed. Our oil supplies have been severely depleted. The Government depends on those oil supplies for revenue. The Treasurer (Mr Keating) said that petrol tax was taxation by stealth at the petrol pump, but the Government needs the taxes provided by the oil industry if some of its schemes are to survive. The Opposition realises that we must ensure that we are self-sufficient in oil. That is why I support the amendments moved by the Leader of the National Party, supported by the arguments he advanced today in his most eloquent speech. Mr Sinclair —You'll get on, Bruce. Mr GOODLUCK —I do not think so. I am in the wrong Party. Mr Sinclair —You're always welcome in our ranks. Mr GOODLUCK —I am welcome everywhere; that is my trouble. Mr McGauran —Except the Labor Party socialists. Mr GOODLUCK —No, I am not welcome over there. It is important that we start to look after the consumers and that we look carefully at the oil industry, making certain that the exploration companies and the consumers are treated fairly. We must make certain also that the people who are involved and who work in the industry are treated fairly. Dr HARRY EDWARDS(Berowra)(9.17) —I support the amendments moved by the Leader of the National Party of Australia (Mr Sinclair). The Opposition is totally opposed to the imposition of this resource rent tax. It will have the effect of killing the goose that lays the golden egg, but that is typical of the Government's approach. However, if this tax is to be forced upon us, the amendments proposed by the Leader of the National Party are of the utmost importance. The Petroleum Resource Rent Tax Assessment Bill provides that exploration expenditure that is deductible for resource rent tax purposes is only that expenditure which takes place within the particular exploration permit area for which a production licence is granted as well as any further expenditure that takes place within that production licence area. That provision is extremely limiting when one considers the whole of the activity of an exploration company in such a context of very high risk, and exploration is surely such a one. The amendments propose only the very reasonable widening of the deductibility provisions to the extent that any exploration expenditure undertaken in any area where a discovery would be liable to rent should be deductible against any revenues from other discoveries subject to the rent resource tax. Mr Cobb —It is not an incentive now. Dr HARRY EDWARDS —It is a disincentive. The amendments are designed to act as some incentive. As I said, what is proposed is typical of the Government's approach. Let me take negative gearing as an example. It may be that the debate is not specifically on negative gearing, Mr Chairman, but I instance the withdrawal of negative gearing as a case where, in the interests of alleged fairness, a measure was introduced, the ultimate effect of which was to dry up supplies of houses in the private rental market and to lengthen the queues waiting for public housing. That had a particularly adverse effect on low income groups. Why do I instance this? I am making the point that the Government is prone to undertaking these measures in the alleged interests of fairness, or some such aim, the effect of which, as my colleague said, is to kill incentive and to disadvantage people whom, if fairness is to be the criterion, ought not to be disadvantaged. The same thing is happening in this area, where the deductible expenditure is to be limited in this way. This tax will tend particularly to preclude high risk projects where the chance of discovery is very small, so the likelihood of revenues to offset the exploration expenditures is very small. They will be particularly discouraged. But who knows where the really large and profitable well will turn up? It is something that is almost entirely unpredictable; that is the nature of the game. I believe it is absolutely essential that the amendments proposed by the Opposition in this vital area be accepted by the Government. Earlier in the night the honourable member for Calwell (Dr Theophanous) said this is a reasonable tax. Mr Cobb —The alternative Treasurer. Dr HARRY EDWARDS —Whose alternative Treasurer? Mr McGauran —His own. Dr HARRY EDWARDS —Yes, his own, maybe. He said that this is a tax that will be imposed only where the exploration and development is profitable. That is the very point that is at issue, because this is an area where effort has to be spread very widely. It is necessary to undertake exploration in many areas. It is critically important in those areas that would, if a well is found, be subject to resource rent tax, that all the expenses incurred should be permitted. It is all right for the Minister for Primary Industries and Energy (Mr Kerin) to state that the major factor influencing exploration expenditure is the oil price. Certainly that is a factor, and an important one, but as the Leader of the National Party of Australia pointed out, what the explorer is ultimately interested in is the net yield after the exploration has been carried out and after facilities have been established to get the oil. In that sense the limits that are introduced here on the expenditures which are ultimately deductible for the purposes of this tax are a very important determination affecting that factor. The impact of this tax, as with the matter of negative gearing to which I have referred and capital gains tax-and I had better not embark on a long discussion about that-is on this vital area of incentive. In the interests of greater oil production and in the interest of maintaining a reasonable level of self-sufficiency in this country in this important area I urge the Government to accept the amendments proposed by the Opposition. Mr McGAURAN(Gippsland)(9.24) —Mr Chairman, I think you and most members of this chamber would agree that it is difficult to imagine more important legislation being debated. Mr Downer —I would not say that. Mr McGAURAN —The honourable member for Mayo would not say that. Well, in a few years Hansard will be read and it will be seen just which honourable members were aware of the dire consequences facing the country under this tax regime. Yet where are the Government members? Only three Government members have spoken on this legislation this evening. This is landmark legislation that will determine to a large extent the prosperity of the country in the future, and a measly three Government members contribute to the debate whereas several members of the Opposition have participated in the debate. Indeed, the speakers list has been prematurely terminated. That gives an indication of just how serious the Government considers this measure to be. I would go further and suggest that the absence of Government members is proof in itself of the shallowness of their argument. After all, the three members who did speak on behalf of the Government could not and did not in any way counter the two basic facts drawn out by members of the Opposition. The first is that there will be a fall in Government revenue-the Government take-from petroleum and oil in the next few years. The second major fact that none of them could counter is that the figures demonstrate beyond doubt that there has been a dramatic fall in exploration since this Government came to power, and it will further decrease in the future. Time does not allow me to debate some of the intricacies of this legislation. Nevertheless, they are the two fundamental principles. Firstly, the Government will lose out by this disincentive tax regime and, secondly, exploration will drop markedly in the future. The results will be a rise in the cost of petrol, which will affect all Australians, and it will have an effect on our balance of payments-already at a critical level. This Government has run away from the major oil exploration challenge facing Australia; that is, to create a tax regime to provide the necessary incentive to encourage exploration. Not only will this Government dampen exploration by way of its resource rent tax (RRT), but it will kill exploration. How many times do figures have to be drawn to the Government's attention? In 1983, $520m was spent on exploration. In 1987 it is estimated to be $130m. The Minister for Primary Industries and Energy cannot deny those basic facts that have been highlighted time and again by members on this side of the chamber. Already a heavy tax burden is applied to oil explorers. There is company tax, payroll tax, sales tax, fringe benefits tax and capital gains, and now there is cash bidding and the RRT. The figures speak for themselves. It is estimated that by 1990 Australia will have an import bill of some $3 billion a year. That will be the cost of importing oil within the next two or three years. Oil reserves still exist, particularly in Bass Strait and the North West Shelf. Of course Bass Strait is part of my constituency of Gippsland. It is estimated there could be three billion barrels of oil-15 years' supply-remaining in Australia. It is not true to say the oil is not there; it is true to say that there is no incentive to tap that oil supply. At present Bass Strait is two-thirds exhausted. I am told that this year Bass Strait will supply only 65 per cent of Australia's needs and by 1990 that will reduce to 40 per cent. Honourable members will know it has been much higher in the past. At the very height of Bass Strait production it seemed that most of Australia's oil needs were obtained from that region. The Minister does not have to believe the Opposition. Why does the Minister not have recourse to a study commissioned by a similar socialist government, the Victorian Government? A study carried out by the Victorian Department of Industry, Technology and Resources has produced a report that estimates the impact of RRT to be even greater than that suggested by the Opposition. That report by the Victorian Labor Government estimates the oil decline will have an $8 billion to $9 billion impact on the balance of trade by 1995-96. Furthermore, it believes that the gross domestic product will fall by almost $16,000m, and obviously public sector borrowing will need to increase extravagantly to cover this. The facts are obvious. They are clear. It seems that most members on this side of the chamber have that appreciation-though not all. But out in the community there is no doubt whatsoever; it sees this Government as taxing the living daylights out of the oil exploration industry. The ramifications will be brought home to Australians very quickly. We will remind the community time and again of the consequences and where the responsibility lies. The responsibility lies at the feet of this Government, which is imposing an oppressive tax regime in the face of all logic. Mr McARTHUR(Corangamite)(9.31) —I support the amendments moved by the Leader of the National Party of Australia (Mr Sinclair) that the Petroleum Resource Rent Tax Assessment Bill 1987 should encompass broader deductability items. Of course, the Bill is opposed by members of the Opposition. I note that the Government can muster only three speakers to support its legislation. The Bill brings into clear focus the problems facing Australia in the 1990s and thereafter. Even when the world oil price has fallen, this Labor Government has managed to change its tax regime to ensure that it retains the ability to extract about $7.5 billion in taxes from the oil industry. The major difficulty facing Australia is that on current projections, both on exploration prospects and on the current availability of oil from known wells, Australia will be importing about $3 billion worth of oil in 1992-93. Historically, the experts have been wrong in estimating the world price of oil and consumption levels of oil. There seems to be little doubt that Australia is facing major difficulties in the next decade in relation to its balance of payments problems caused by the importation of large quantities of crude oil to make up for the rapidly depleting Bass Strait oil fields, along with the twin difficulty that the Federal and State governments will be deprived of oil based revenues. Australia is a large land mass plagued by the `tyranny of distance' in coping with its productive effort in both primary and secondary industries. With such large industries and relatively small resources of petroleum, Australia's next 30 years of economic development is threatened. Against this background Australia enjoys the use of cheap fuel, as compared with other Organisation for Economic Co-operation and Development countries. Australia's petrol price at the pump is the third lowest in the world. In September 1987 our average price was 55c per litre. Only the United States of America and Canada offered motorists cheaper petrol, at 41c and 49c respectively. If we look at other developed countries we see a dramatic comparison with Australia's 55c per litre at the pump. The price in the United Kingdom is 88c per litre; in France, 113c; in Japan, 123c; and in Italy, the most expensive, 138c per litre. In these countries there is an obvious incentive to save fuel to help with their balance of payments problems. Only in those oil rich countries such as Saudi Arabia and Nigeria are the governments and the national economies able to sell petrol as low as 13c per litre. Australia uses about twice as much transport energy per head as do Europeans, and about four times as much as the Japanese. This high spending Hawke Government has increased the tax burdens of Australians with higher company tax, capital gains tax, fringe benefits tax, increased oil excise and now a proposed resource rent tax which will crush the incentive of oil companies to seek new and bigger fields. Implicit in the legislation is that explorers seeking smaller oil fields gain a tax holiday-the first 30 million barrels produced will be exempt from excise duty. Rather than seeking out the more difficult off-shore areas requiring greater capital expenditure and involving a greater degree of risk, companies will seek to maximise their after tax profits. At a time when Australia desperately needs to find further oil reserves, Government policies have positively hindered exploration. Since the Australian Labor Party came to power in 1983, exploration has slumped. In 1983 there were 47 wildcat wells and 49 exploration wells. Today, after the discriminatory and high taxing policies of the Hawke Government, there are only 11 wildcat wells and 16 exploration wells. In 1983 the industry spent $520m on exploration. In 1987 this has dwindled to a mere $130m. Both industry sources and the Budget Papers indicate that the Bass Strait fields are running dry. The honourable member for Gippsland (Mr McGauran) has indicated his concern because the Bass Strait fields are part of his electorate. He is very worried about that. Bass Strait reserves already are two-thirds depleted. The relative importance of the Bass Strait fields is demonstrated by the fact that those fields produce 420,000 barrels a day. The rest of Australia produces between 120,000 and 130,000 barrels a day. Professor Ian Lowe, Director of the Science and Policy Research Centre at Griffith University said: . . . for about 20 years we have been effectively cushioned from the world oil market by production from the Gippsland Basin. All commentators agree that as the Bass Strait fields run dry Australia's oil production problems will escalate and our balance of payments problems will compound as we have to import our crude oil requirements. The forecast of the Bureau of Mineral Resources indicates that the 1985-86 production of 546,000 barrels a day will fall to about 280,000 barrels a day in 1992-93-just five short years away. Even more disturbing than this drop in production is the prediction by the Bureau that new discoveries can expect to add a mere 80,000 barrels a day to production by 1992. These predictions mean that there is a 50 per cent chance that Australia will be importing 320,000 barrels of crude oil a day by 1992. At a time when our exchange rates are falling, Australia would need an additional $3 billion in 1992-in 1987 dollar terms-to pay for importing our crude oil requirements. Calculated at the optimistic `pre-crash' exchange rate of 70c to the US dollar and taking the cost of crude oil at $US18 a barrel, this is a conservative estimate. These projections come at a time when Australia's current account is running to the tune of $13.6 billion in the red and our national debt is $110 billion and growing. Along with these balance of payments difficulties, future governments will find their sources of revenue from crude oil very much reduced with the inevitable fall in the standard of living of all Australians. The historical perspective of oil prices with their cost to industry and the government tax take indicates the volatility of crude oil pricing and the returns to government. In 1960 it cost the Australian producers $1.80 to import one barrel of crude oil. Australia's transport system and urban sprawl developed on this basis when oil seemed cheap and everlasting. Planners based their estimates on the proposition that Australians would use the motor car as their cheap method of transport. By December 1973 the cost of a barrel of crude oil had risen to $US5.04. The Organisation of Petroleum Exporting Countries, seeing wonderful opportunities for windfall gains, decided to slow down oil production and to set up its own cartel, with the result that the price more than doubled to $US11.65 a barrel. This first oil shock forced Western nations to reassess their energy requirements and the effect on their trading economies. Governments also saw a similar opportunity to take some revenue from this black gold. In August 1975 the Whitlam Government imposed a Commonwealth oil levy of $2 a barrel. This was increased to $3 a barrel between August 1977 and August 1978. In August 1978 import parity pricing was introduced. Prices rose quite dramatically from $US18 to $US24 a barrel in December 1979. One year later, in December 1980, a barrel of oil was worth $US32. By October 1981 it had reached a peak price of $US34. It appeared to users and to governments alike that this higher price would continue and that oil producing nations and governments would enjoy prosperity from these high commodity prices. But, as with any commodity, oil prices have a strong tendency to rise and fall as supply and demand interact. By March 1986 the world price of crude oil had plummeted to $US16.77 and four months later oil was at its lowest price since 1973 at $US8.07 a barrel. In this investment climate, oil companies and explorers are reluctant to invest capital and to take risks with the prospect of further taxes and the implementation of the Labor Party's stated policy of a resource rent tax. Not only are profit estimates down but also the ogre of the resource rent tax provides a further disincentive for the oil industry to invest and explore in Australia. True to form and consistent with long term trends, world oil prices had bounced back to almost $US20 a barrel at the end of last week. With these improved prices the Government has been persuaded to try yet again to introduce another tax on the productive sector of the Australian economy; hence the resource rent tax. Notwithstanding the Government's tax take from productive oil fields both on-shore and off-shore, both State and Federal governments bolster their coffers from taxing the motorist at the pump. Of course in suburban Melbourne last week we could see where the government has taken its gains. The petrol price varies from week to week but if we take a price of 58.6c per litre as the norm we see that State and Federal governments take 33.1c in tax. This is made up of 9c in royalties and crude oil levy and 19.8c in excise duty and 4.3c in State franchise. I support the amendments and support the Opposition's view that the resource rent tax will be a disincentive to the oil industry in Australia. Mr DOWNER(Mayo)(9.40) —I would like briefly to add my support to the amendments moved by the right honourable member for New England (Mr Sinclair), the Leader of the National Party of Australia, amendments that I think would add some rationality to legislation which, for the benefit of honourable members who think I might have some other position, I point out that I strongly oppose. I would not quite resort to the wonderland of hyperbole and say that it is the most important legislation that has ever been introduced into this Parliament, but it is important legislation, and it is made more rational by the amendments moved by the right honourable gentleman. These amendments at least ensure that there is some sort of energy strategy for this nation, a strategy which the Government has so far not addressed. One would think that the Government would be concerned about the issue of energy and energy supplies, which would be a high priority for any government, and that it would be able to articulate that strategy in a way that would give us hope for the future. One would think that it would want, as everyone on this side of the Committee has said, to encourage exploration and to give Australia a greater degree of self-sufficiency, partly so that we can address our balance of payments problem and partly so that we can have greater security of supplies, particularly in an unstable world-I am thinking of the instability in the Persian Gulf. Secondly, the Government's economic strategy should be inter-related with the nation's economic exigencies. I come back to our balance of payments problems and the need for our country to be economically competitive with other countries, to try to use some of its intrinsic advantages, and not throw them away in a tax grab. If the Government does not accept our amendments to this legislation, it will be pursuing what could be described as a Labor energy policy, which is to use energy industries as milk cows. The oil industry is the greatest milch cow of all. After all, since 1983, the Government has raised something like $44 billion in secondary taxes from the oil industry, and others have spoken about the great increase in other taxes during that period. It is interesting to look at the arguments that have been put forward in support of the resource rent tax. First, the Government has argued that it will mean that the community has a greater opportunity to share in this so-called community resource. That is intellectually a rather curious argument, but I do not have time to pursue that point. However, I would say that the community has already benefited to a great extent through the oil industry as a result of the corporation tax, the old oil excises and State and Federal royalties and a whole range of new taxes such as the fringe benefits tax, capital gains tax and so on which the Government has introduced. In the financial year 1985-86, $1 billion went to the Federal Government from the oil exploration industry and $200m went to the States. I would have thought that that would have put to rest the argument that the community was getting nothing from this resource. The community is getting a great deal from this resource. Why impose a further burden which, as other speakers on this side of the Committee have pointed out, will reduce the incentive for exploration and undermine the hope of a national energy strategy? To come to the point of the amendments, the Government argues that the resource rent tax is somehow profit based. That is a simple misunderstanding of the way that the company structure in Australia or in any other capitalist country operates. We define profits in Australia as something that can be taxed after cost has been taken into account. That is always the way that we have assessed profit, but this legislation does not do that. It does not allow for expenditure on dry wells. Companies get no deduction for that, and that is a breach of a fundamental principle of tax law that we have been implementing in this country since 1901. In any case, is this legislation economically rational? The Government argues that it has had a rush of economic rationality to the head, but when one looks at it, it has been behaving quite irrationally. I draw the attention of the chamber to something that Senator Gareth Evans said on 16 December 1986 in relation to the gold tax. He said: . . . the Government has concluded that the importance of encouraging active exploration- remember that word `exploration'- and development, and of maximising production and the consequent export income generated by the gold mining industry, outweigh the arguments in favour of removing the industry's long-standing tax exemption. I will not get into the arguments about the gold industry, but why is it a special case? Why is there no tax on the gold industry when there is this additional secondary tax on the oil industry? We cannot fill up our petrol tanks with gold. We can fill them up with petrol, and why is it that there is a secondary tax on an industry that is vital to the lifeline of our country? It is irrational, and the Minister knows that only too well. It is simply an example of this Government resorting to low politics. One can sink the boot into the oil companies because one does not think that the community sympathises with them. However, if one did that to the gold industry, one might lose a few seats in Western Australia. That blows apart any claim that the Government might have for economic rationality. If we look at the detail of this legislation, so does the fact that this legislation penalises those explorers who choose a wide geographical spread for their exploration. Why would one have legislation that discriminates against explorers with a wide geographical spread in favour of those with a narrow one? It is completely irrational, and once more is an argument that blows apart any claim by the Government to be economically rational. Finally, let us face it, this whole legislation was formulated way back in 1984. The idea of the resource rent tax goes back to 1977, in the dogma of the Labor Party of Australia, but in 1984, the plan for the resource rent tax was put forward. Let us look at the estimates for production and exploration in 1984 and then at what has happened. One would think, given the fact that production has fallen by something like 20 per cent in Australia since 1984, that the estimates of self-sufficiency, which have fallen from 95 per cent to just 65 per cent by 1990, would be sufficient grounds to reconsider this legislation. Look at the import figures at the time of a balance of payments crisis. Last year, we imported something like $44m worth of oil, and by 1990 we shall be importing $3,000m worth. One would think that those simple facts would at least have some impact on the Government, which would claim to manage the Australian economy. When one looks at the estimates for exploration, they show that in 1984 we were talking in heroic terms about future exploration, yet exploration around Australia fell by 35 per cent last year and off-shore by an incredible 55 per cent. I would have thought that any rational Australian concerned about the future of our economy and our country could see the coherence of the argument against the resource rent tax, against doing something that is economically irrational against doing something which discriminates against some companies and in favour of others, against something which does not square with the Government's policy on the taxing of the gold industry but, ultimately, it is a measure that blows apart any chance that we have until the next election of having a co-ordinated national energy strategy. That is why the amendments moved by the right honourable member for New England are so important. They give this legislation at least some sense of rationality and deserve the strong support of all honourable members, including the honourable member for Gippsland (Mr McGauran). Mr KERIN(Werriwa-Minister for Primary Industries and Energy)(9.49) —I am amazed that the honourable member for Mayo (Mr Downer) is advocating a gold tax, but that is his prerogative. The amendments proposed by the Opposition amount to a re-run of what it moved last time, with a few minor drafting changes. The amendments centre on a wider deductibility and there are a few other bits and pieces. Basically, I guess the comments by the Opposition in this part of the debate really get back to the central question of whether or not by giving companies a big tax break more exploration is encouraged. What we have been saying from the Government side is that the price of oil is one of the main determinants of the level of exploration activity. In Canada, for example, the exploration in 1986 was 38 per cent down on that in 1985. There was a peak of 28 off-shore wells in 1985 and only four in 1987. In the United Kingdom there was a peak of exploration in 1984. This year off-shore there is a decline of about 40 per cent. That country has a tax rate of 84 per cent but the after tax cost of exploration is very low-16 pence in the pound. So there is a lot of incentive there. In the United States exploration is 46 per cent down this year compared with that in 1985. This is why we keep saying to Opposition members that they should look at this as part of the whole bracket of Bills, that this is secondary tax which is based on profitability and, for a certain type of field, it does effectively give a tax break and an advantage to those fields. It makes sure not only that the Australian people get the rent but also that we actually get the oil out of the ground or from under the sea. It is pretty obvious that honourable members opposite ignored what I said in my speech at the second reading stage. Sure, this goes back to 1983 and 1984 because this was thoroughly discussed with the industry and two discussion papers were put out. It was argued through then and the reality is that the principle of resource rent taxation still holds. It is appropriate for this industry and the Government rejects these tired old amendments. Question put: That the amendments (Mr Sinclair's) be agreed to. The Committee divided. (The Deputy Chairman-Mr D. B. Cowan) Ayes . . . . . . . . . . . 56 Noes . . . . . . . . . . . 76 —— Majority . . . . . . . . . 20 —— Adermann, A. E. Lloyd, B.Aldred, K. J. McArthur, F. S.Andrew, J. N. (Teller) McGauran P. J.Beale. J. H. MacKellar, M. J. R.Blunt, C. W. McVeigh, D. T.Braithwaite, R. A. Macphee, I. M.Brown, N. A. Miles, C. G.Cadman, A. G. Millar, P. C.Cameron, Donald Nehl, G. B.Cameron, Ewen Peacock, A. S.Cameron, Ian Porter, J. R.Carlton, J. J. Prosser, G. D.Cobb, M. R. Reith, P. K.Connolly, D. M. Rocher, A. C.Downer, A. J. G. Ruddock, P. M.Edwards, Harry Shack, P. D.Fife, W. C. Sharp, J. R.Fischer, Tim Shipton, R. F.Fisher, Peter Sinclair, I. McC.Goodluck, B. J. Smith, W. L.Hall, Steele Spender, J. M.Halverson, R. G. Sullivan, K. J.Hawker, D. P. M. Tuckey, C. W.Hewson, J. R. Webster, A. P.Hicks, N. J. (Teller) White. P. N. D.Hunt, R. J. D. Wilson, I. B. C.Jull, D. F. Woods, R. L.Katter, R. C. Wooldridge, M. R. L. Baldwin, P. J. Jenkins, C. A.Beazley, K. C. Johns, G. T.Beddall, D. P. Kelly, R. J.Bilney, G. N. Kent, L.Blanchard, C. A. Kerin, J. C.Blewett, N. Kerr, D. J. C.Bowen, Lionel Klugman, R. E.Brown, Robert Lamb, A. H. (Teller)Brumby, J. M. Lavarch, M. H.Campbell, G. Lee, M. J.Charles, D. E. Lindsay, E. J.Charlesworth, R. I. McHugh, J.Cleeland, P. R. McLeay, LeoCourtice, B. W. Martin, S. P.Crawford, M. C. Mildren, J. B.Cross, M. D. Milton, P.Cunningham, B. T. (Teller) Morris, AllanDarling, E. E. Morris, PeterDawkins, J. S. Mountford, J. G.Dubois, S. C. O'Keefe, N. P.Duffy, M. J. O'Neil, L. R. T.Duncan, P. Price, L. R. S.Edwards, Ronald Punch, G. F.Fatin, W. F. Saunderson, J.Fitzgibbon, E. J. Scholes, G. G. D.Free, R. V. Sciacca, C.Gayler, J. Scott, J. L.Gear, G. Simmons, D. W.Gorman, R. N. J. Snow, J. H.Grace, E. L. Snowdon, W. E.Griffith, A. G. Staples, P. R.Hand, G. L. Theophanous, A. C.Holding, A. C. Tickner, R. E.Hollis, C. Uren, T.Howe, B. L. West, S. J.Humphreys, B. C. Willis, R.Hurford, C. J. Wright, K. W.Jakobsen, C. A. Young, M. J. Burr, M. A. Jones, BarryDobie. J. D. M. Brown, John Question so resolved in the negative. Bill agreed to. Bill reported without amendment; report adopted Bill (on motion by Mr Kerin)-by leave-read a third time. Consideration resumed from 21 October, on motion by Mr Kerin: 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 Kerin) read a third time. Consideration resumed from 21 October, on motion by Mr Kerin: 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 Kerin) read a third time. Consideration resumed from 21 October, on motion by Mr Kerin: 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 Kerin) read a third time. Debate resumed from 18 September, on motion by Mr Barry Jones: That the Bill be now read a second time. Mr LLOYD(Murray)(10.03) —The purpose of the Dried Fruits Charges Amendment Bill 1987 is to set a higher maximum rate of charge and to enable the operative rate of charge to be increased by regulation. This is a fairly standard Bill. From time to time the maximum levy rate has to be increased by legislation to allow the operative rate then to be determined by the industry and presented to the Minister for Primary Industries and Energy for change by regulation. This amendment increases the maximum rate from 1.5c a kilogram or $15 a tonne to 3c a kilogram or $30 a tonne. I understand that the operative rate that the industry is seeking will be 2c a kilogram or $20 a tonne. The amendment has been sought by the Australian Dried Fruits Corporation and it has the support of the industry. The reason for the request is that the cost of promoting Australian dried vine fruit on overseas markets has increased significantly in recent times, particularly in relation to the devaluation of the Australian dollar. The present fall in the value of the dollar will presumably mean that the good promotion work that is done on behalf of the industry overseas will cost even more. The industry is hoping to increase its promotional activity as well. I will not say any more on this legislation because there are people who are more expert in and more representative of the dried vine fruit industry than me, particularly the honourable member for Mallee (Mr Peter Fisher). I will be meeting members of the dried vine fruit industry in Mildura next Monday. I will welcome the opportunity at that time to discuss the range of industry measures with those people. In conclusion, I give notice that the Opposition parties support the legislation. Mr COURTICE(Hinkler)(10.05) —The Dried Fruits Charges Amendment Bill 1987 seeks to raise the maximum permissible charge from $25 to $30 a tonne to finance the operations of the Australian Dried Fruits Corporation. The Corporation promotes and controls the export of Australian dried vine fruit. The Corporation, of necessity, must undertake an increased promotional role in regard to Australian products. Australian industries today are in one of the most competitive positions ever because of the deregulation of the Australian dollar, along with wage restraint and the increased importance of research and development. The Government, through the Minister for Primary Industries and Energy (Mr Kerin), has placed a great deal of importance on research. I am indebted to the Minister for Science and Small Business (Mr Barry Jones) for the following statistics. In a paper entitled `Still the Lucky Country' the Minister states that Australia's ranking is No. 8 in the Organisation for Economic Co-operation and Development (OECD) and No. 10 in the world as a producer of scientific research papers. We have produced the same number of Nobel Prize winners in the sciences as Japan-namely, four-with one-eighth of Japan's population. In spite of this, we are not highly rated as an exporter of high technology products. Of the 24 OECD nations, we were ranked No. 18 in 1978, No. 20 in 1980, and No. 21 in 1982. The leaders were Switzerland-whose figure was 32 times higher than ours-the Netherlands, Belgium and Sweden, all of whom we beat as research producers. Australia was ranked twenty-first, finishing in front of Greece, Iceland and Turkey. It is pleasing to see the Government taking positive measures to reverse this trend. It is all the more amazing that the Deputy Leader of the National Party of Australia, the honourable member for Murray (Mr Lloyd), in an address to the Federal Council of the National Party, attacked the Government's funding of new technology. This Bill, by its nature, will allocate more money for research-- Mr Peter Fisher —Mr Deputy Speaker, I raise a point of order. This Bill is about dried fruit. I have not yet heard the honourable member for Hinkler mention those words. Mr DEPUTY SPEAKER(Mr Mountford) —I must apologise. I had not been listening too closely. Mr COURTICE —It is pleasing to see the Government taking positive measures to reverse this trend. It is all the more amazing that the Deputy Leader of the National Party, in an address to the Federal Council of the National Party, attacked the Government's funding on new technology. Without new technology, no primary industry will be competitive in the world today. The dried fruits industry is a classic-- Mr Peter Fisher —Mr Deputy Speaker, I raise a point of order. My point of order is one of relevance. I believe the honourable member does not quite understand the Bill that we are debating. Mr DEPUTY SPEAKER —I am sure that the honourable member is coming to the point of the legislation. Mr COURTICE —Mr Deputy Speaker, the dried fruits industry is an important primary industry, as they all are, and unless we embrace new technology we will not be competitive in the world today. Opposition members interjecting- Mr COURTICE —That is the point that I am making. It is a tragedy that those on the other side of the House who have interjected cannot see the importance of new technology in the primary industry field. One of the tragedies, Mr Deputy Speaker, of those on the other side of the House is that they could not fight over the spoils of victory and today they cannot even fight over the crumbs of defeat. One of the more contentious issues facing the whole export fruit industry today is the irradiation of food for export. The irradiation of food for export was recently argued in the Bundaberg district in my electorate at the Northern Australian Development Conference. The argument in favour of the process is that it preserves the shelf life of fruit. It is also preferable to the spraying of the fruit with chemicals, which occurs-- Mr McVeigh —Mr Deputy Speaker, I raise a point of order. My point of order, like that of the honourable member for Mallee, is that irradiation of fruit has nothing to do with the Dried Fruits Charges Amendment Bill. It is a point of relevance. Mr DEPUTY SPEAKER —The honourable member for Groom has no point of order. I have been listening carefully to what the honourable member for Hinkler has to say and he is within the terms of the Bill. Mr COURTICE —Thank you, Mr Deputy Speaker. As I was saying, unless we embrace new technology in all primary industries, we will not be competitive. As the Minister for Primary Industries and Energy said today at Question Time, if the only thing that honourable members on the other side of the House can do is interject or scream after they had seven years in government and they failed to embrace the problems that rural industry faced, it does not say too much for them. They should look at the mess that we face in Queensland as a consequence of the policies that they implemented over 30 years. I have great pleasure in supporting the Bill. Mr ANDREW(Wakefield)(10.10) —It is a matter of considerable concern to me to discover how little the honourable member for Hinkler (Mr Courtice)-the only Government speaker on the Dried Fruits Charges Amendment Bill-knows about the dried vine fruit industry. One would suppose, from his remarks, that he presumes that the fruit is in some way irradiated in order to be dried. I should like to hear the honourable member for Hindmarsh (Mr Scott) respond to the synopsis that fruit is dried by being exposed to a massive dose of radiation. The dried vine fruit industry is an industry in which high technology-this is the other excuse that the honourable member for Hinkler used for occupying the time of the chamber with a brief speech-has had very little impact. In saying that, I rebut what the honourable member for Hinkler said and in no way detract from the expertise currently employed in the dried vine fruit industry in Australia. I guess that, ever since the time of the Egyptian Pharaohs, people have known something about the technique of drying fruit. It is sad but true that many of the techniques employed in 1987 to dry Australia's vine fruit crop are still the same as those employed by the early Egyptians. Australia's vine fruit growers still prefer to sun dry their vine fruits than dry them by any another technique. There has been very little impact of high technology in the sun drying process, and neither should there be. After all, sun drying allows growers to dry their fruit by the natural process available to them and means that they do not need to consume Australia's scarce energy resources in the drying process. The Bill before the House seeks to increase the export charge, the so-called operative charge, from $15 to $30 a tonne. The Bill has elicited no objection from either the Opposition or the dried vine fruit industry. But the point that must be made to the House and the point that sadly must be made especially to the honourable member for Hinkler-since he is the only speaker, I presume that it must be made to the Government benches-is that this Bill relates to the dried vine fruit industry. We are not talking about the drying of fruit in general. We are not talking about the drying of pineapples, bananas, apricots, peaches or pears; we are talking about the drying of vine fruits. The man in this House most involved in the dried vine fruit industry is my colleague the honourable member for Mallee (Mr Peter Fisher). The majority of dried vine fruits in Australia are found in the Sunraysia area, under the stewardship of the honourable member for Mallee, and I will listen with interest to the comments that he makes on this legislation. The industry went to the Minister for Primary Industries and Energy (Mr Kerin) with a request that the operative charge be raised-he has met that request, and I commend him for it-because, although the falling Australian dollar has presented the industry with new export opportunities, it has also meant that the dried vine fruit industry has had to face the reality that promotion in those new export markets costs more than before the value of the dollar fell. I am grateful to the Minister for his reassurance that prior to the operative charge being increased by regulation, the industry will be consulted. This is an area in which exports are desperately needed. Over the last couple of days I have been in touch with the Australian Dried Fruits Association (ADFA) and the industry, as I have no doubt the honourable member for Mallee has been. But, sadly, there is little evidence that Government members have similarly made any effort to be in touch with the industry. Mr DEPUTY SPEAKER(Mr Mountford) —Order! It being 10.15 p.m., the debate is interrupted. I propose the question: That the House do now adjourn. Mr Kerin-Mr Deputy Speaker, I require that the question be put forthwith without debate. Question resolved in the negative. Debate resumed. Mr ANDREW(Wakefield) —I have referred to the importance of exports to the dried vine fruits industry. I point out that there are three major components of the dried vine fruit industry-dried currants, dried sultanas and, principally, dried gordo grapes which become known as raisins. Currently the dried currant industry, with an average production of 5,700 tonnes per annum over the past five years, is going into this season with stocks sold out. The export requirement for the dried currant industry has been relatively small because it has been a crop largely consumed by the domestic market. The dried sultana industry, which makes up far and away the largest part of the dried vine fruit industry in Australia and which, as I have said, is an industry dominated by the Sunraysia area, has had an average production of 75,000 tonnes a year over the last five years. This industry faces a much healthier outlook than it has seen over the last decade, with only moderate stocks remaining at the end of this selling season. Sadly, not quite the same rosy picture can be painted for the dried raisin industry, where the average crop dried has fluctuated enormously from 8,300 tonnes in some years down to 950 tonnes in other years. I am told by the ADFA that, unfortunately, some raisins are still available from the 1986 season. One might ask why this situation pertains in the raisin industry. It is largely because the raisin industry reflects whatever is happening in the wine grape industry at the time. When there are surpluses of wine grapes, people tend to turn gordos into raisins, and suddenly one is asking a marketing machine to pick up an enormous tonnage of raisins for which markets have not been developed. In other years, when there is an uptake of grapes for the wine industry, there can be a shortage of raisins, and markets formerly serviced principally by the Australian Dried Fruits Association can be neglected and lost to some of our major competitors. The Bill will allow the ADFA to promote export markets, to ensure that the sultana industry, which so desperately needs to retain export outlets, does so, and, I would hope, to ensure that some of the surplus raisin crops available to the ADFA can be sold on export markets. It is worth pointing out not only that export potential is important to this crop but also that the crop itself is unique in that it takes the form of a primary product which becomes no longer perishable once it has been dried, so it can easily be exported and stored. It is the capacity both to export and to store dried fruit that makes it quite unique in terms of the horticultural and viticultural industries. It is this capacity to store dried fruit and to be assured that it will remain healthy and that very little deterioration will occur that means the ADFA can go into the market-place with 1986 raisins knowing that they are a quality product available to any market-place prepared to buy them at a price at which Australian growers can economically produce them. While the Bill focuses largely on export markets it is just a shade ironic when one considers that production in the dried vine fruit industry in Australia-for which the export market, particularly in terms of sultanas, is so important-is largely, in 1987, in the hands of people who have been, and I use this term as kindly as I can, imported into Australia. This industry is labour intensive. I opened my remarks by saying that it was an industry which had changed very little with the passage of time. Today grapes may be grown on particular trellises and sultana grapes especially may be grown on root stocks that encourage the sort of production that our forefathers never envisaged. They are taken from the vines, placed on racks and sprayed with a harmless mixture that allows the skin to break down and the grapes to dry or, alternatively, they are sprayed on the grape vine. It is at that point that we see the first of the few changes that have occurred-in the high technology area. Particularly in the Sunraysia area some grapes are being dried on the vine and then mechanically harvested instead of being subjected to the lengthy and painstakingly sun drying process that has been characteristic of the Sunraysia and Riverland areas during the life of both the honourable member for Mallee and me. This is an industry which has largely not had to avail itself of high technology but which has put into practice the technology available to the wine grape industry in order to harvest the grapes that it dries on the vine or alternatively spreads in the sun on hessian runs so they can be exposed to the sun to dry. That process also involves an intensive use of labour. The hessian runs must be folded in every night to keep the moisture out and opened up every morning and the grapes raked in order to get maximum exposure to the sun. This labour intensive industry has been serviced largely by people who have come into Australia from various cultures and who have been prepared to work. There is vast opportunity both in the Riverland area and in the Sunraysia area for employment to be generated for those who are currently unemployed if only they are prepared to work. It is an indictment of our present system that in the middle of the grape season we still find grape growers seeking workers in what is largely a healthy working environment but which involves an input of real physical labour. I conclude by saying that the Australian Dried Fruits Association, which supports the legislation currently before the House, has shown some reluctance to enter the Australian Horticultural Corporation which will probably be debated here tomorrow. The Association intends to keep its options open to see how successful the Corporation is before it, as a parallel statutory body, chooses to join the Corporation. My final remark has a touch of irony. Apart from the Australian Dried Fruits Association the other major processor and retailer of dried vine fruits in Australia is the Angas Park Fruit Co. Pty Ltd, which happens to be located at Angaston in the electorate of Wakefield. Mr Kerin —Well done! Mr ANDREW —While I an grateful to the Minister for his commendation, I hope he will find it both ironic and pleasant to know that the Angas Park Fruit Co. has just been acquired by Colin Hayes of racehorse training fame. I hope that tomorrow brings Mr Hayes particular success and I hope that the acquisition of the Angas Park Fruit Co. does so as well. Mr PETER FISHER(Mallee)(10.24) —The honourable member for Murray (Mr Lloyd) and the honourable member for Wakefield (Mr Andrew) have quite adequately explained the technical aspects of the Dried Fruits Charges Amendment Bill. I would like to comment on a remark made by the honourable member for Hinkler (Mr Courtice). To even suggest that the Australian dried fruit industry has any association with the irradiation process shows the honourable member's ignorance. Mr Andrew —It is scandalous. Mr PETER FISHER —It is scandalous because the dried fruit industry is one of the most natural growing, processing and drying industries in this country. To associate it with the irradiation process is most unfortunate. By any measure of an industry the Australian dried fruit industry has remained viable and successful in the most difficult of domestic cost structures with difficult world tariff policies and, of course, intense competition. By any assessment of the circumstances with which the dried fruit industry has had to cope and even at times from reports by the Industries Assistance Commission, one would think that its potential for contribution to the Australian economy would have decreased rather than increased. The industry has in fact improved its position economically and has improved its potential to contribute to the economy. It has done so basically in three major areas. For a large part of its history it has always been a very organised industry. It has always had strong leadership through very difficult periods. It has been prepared to diversify and use new farming techniques to continually improve its productive capacity. As honourable members would know, all dried fruit that is exported is subject to a levy to fund the operations of the marketing corporation, the Australian Dried Fruits Corporation, and also to help fund research into the industry. This Bill applies a maximum charge. Tonight we are ensuring that that maximum rate is increased. In the past the maximum operative rate of the charge has been set at 1.5c per kilogram. Therefore, the purpose of this Bill is to set a higher maximum rate to enable the present charge to be increased. This amending legislation was sought by the Australian Dried Fruits Corporation with industry support to provide additional funding for promotional purposes. The cost to the Corporation of promoting Australian dried vine fruit on overseas markets has increased significantly in recent times. The main reason for this is that overseas currencies have appreciated against the Australian dollar and all overseas promotion costs are paid for in Australian dollars. For example, a promotion package in Germany, compared with one year ago, would cost an extra 37 per cent in Australian dollars, and to this needs to be added the inflationary costs. The only change contained in this Dried Fruits Charges Amendment Bill increases the rate of charges from 1.5c to a maximum of 3c per kilogram. The dried vine fruit industry is worth $100m annually to Australian export revenue. Mr Cobb —It is very important. Mr PETER FISHER —It is a very important industry and it is currently spending between $600,000 and $700,000 each year on its promotion overseas. Our dried vine fruit crops are exported to over 40 countries around the world, including the United Kingdom, Japan and the two very important markets of Germany and Canada. Exports of dried vine fruit increased in the marketing year from 1 March 1985 to 28 February 1986 by some 4 per cent to a total of 55,532 tonnes. On the domestic market there has been a sustainable and continual increase in sales. An interesting point to recognise in this debate is that the Americans spend $10m annually in promoting their raisin exports of 80,000 tonnes compared with our annual expenditure of $600,000 for our 50,000 tonne export figure. This means that when Australia exports some 50,000 tonnes of fruit the cost of promotion to the industry is in the vicinity of $8 per tonne. The only income apart from the present levy has been an export marketing development grant applied on a pro rata basis. For example, if the industry spends $600,000 some $200,000 is added to it from the export marketing development grant, which I sincerely hope will continue. The Australian dried fruit industry is facing enormous challenges on today's world market, as most of our commodities are. The heavily subsidised fruit from the European Economic Community presents increasing competition to our exports and a deterioration in quality wherever that fruit is applied to world markets. Scientific methods have already played a large part in the success of the industry. Research into soil, irrigation practices, drainage, viticultural techniques and drying and packing have enabled our dried fruit industry to become one of the world's most efficient and productive. Such research has led to reduced labour input, lower costs and, importantly, a better product. With government scrutiny of exports at a high level, our dried fruit industry ensures that all produce sent overseas is of uniform quality. I mention this matter because it is of some concern to me and to the industry that grants by the Government to the Commonwealth Scientific and Industrial Research Organisation (CSIRO) of some $13m were cut in the last Budget. The CSIRO has a very high profile and has performed a very acceptable service to the dried vine fruit industry with its operations at Merbein. I sincerely hope that this quite significant cut of over 11 per cent will not impact on the operations of the Merbein CSIRO facility. It is absolutely essential to the dried vine fruit industry that this research and promotion continue. This is the purpose of the Bill before the House. Dried vine fruit is a highly specialised product. It meets a specialised and sophisticated market. However, the industry and the Corporation have a major commitment to expand the product beyond the traditional markets into Asia and the Pacific rim. This task is ongoing but it must have its limitations as many of these countries have small incomes and their traditional way of life does not place vine fruit in the staple diet of the people. It is seen as a luxury. In many countries it is rare. However, prospects have grown. It is mainly because of the nutritional capacity of the Australian dried fruit crop that they have grown. This is indicated by the increased exports in the last 12 months to India-despite huge tariffs, major export markets have been obtained. A lot of this has to do with the aggression of the Union of Soviet Socialist Republics into Afghanistan which virtually has stopped the flow of its product through the Khyber Pass and into India. Volume increases to this market may not be large but they are already becoming significant to our industry. I will just mention that this industry is absolutely vital to an electorate such as mine and to that of my colleague the honourable member for Farrer (Mr Tim Fischer). The communities of Robinvale, Mildura and Swan Hill depend very heavily on the economic impact of this commodity. Dried vine fruit is very much a part of the successful development of so much of the Murray Valley and, importantly, the successful development and integration of people from so many parts of the world-people who are good farmers and who are producing real wealth every year that the dried vine fruit crop is harvested. I conclude just by mentioning-and I intend to refer to this on another occasion in this House-that this year is the centenary of the development of irrigation in the Sunraysia district, where the foresight of Alfred Deakin, a former Prime Minister, and, of course, the Chaffey brothers, combined with generations of hard-working people in a very difficult climate, have seen 100 years of successful irrigation. I am sure that if governments show the same sort of assistance to and interest in this industry as they have shown over the past 100 years, we will have another 100 years of successful challenges in the future. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Kerin) read a third time. Motion (by Mr Kerin) proposed: That the House do now adjourn. Mr COBB(Parkes)(10.34) —At 10 a.m. on Sunday, 10 October, 1915, close to 26 men set out to walk from Gilgandra in New South Wales to Sydney. This was called the Cooee march. The purpose of the original marchers was to inspire and attract others to join them for the war effort as they passed through the many country towns on the way. So successful were they at capturing the imagination of the people that their numbers had swelled to 263 and they had to force their way through tens of thousands of people when they arrived at the Domain on Friday, 12 November. At a time when attracting manpower for the war effort was proving difficult this action gave the recruitment forces a new lease of life and eight other marches were organised in other towns for the same purpose. The driving force behind the first Cooee march was Bill Hitchen, who got the idea from his brother, Richard. The last survivor of the march, Lesley Greenleaf, died in 1980. Now some 72 years after the original march, Mr Kimlyn Templeton, 34 years old, of Gollan, along with Brian Bywater, 48, of Geurie, and Robert MacLean, 46, of Dubbo, have organised a re-enactment of the 1915 march. It will follow the same route as the original march and will have nightly stopovers in the towns of Eumungerie, Dubbo, Geurie, Wellington, Stuart Town, Boomey, Molong, Orange, Millthorpe, Bathampton, Bathurst, Yetholme, Wallerawang, Lithgow, Mount Victoria, Katoomba, Springwood, Penrith, Parramatta, Strathfield, Ashfield and Sydney. Tonight they are at Bathampton, half way between Blayney and Bathurst. The original march took 33 days. This one will take only 22. As well as the three organisers in the march I have already mentioned, there are 10 Gilgandra lads, namely: Wally Organ, 63 years old; Don Kennaugh, 47; Peter Lincoln, 42; Terry Nangle, 38; Ken Gordon, 27; Tony Davis, 25; Ian Irvin, 19; Ross Stockings, 41; Don McLean, 40; and Eric Fryers, 49. Others who will be marching all the way are: Vadim Savitsky, 41, of Guildford; Paul Bywater, 20, of Dubbo; Jim Harrison, 32, of Lalor Park; Robert Mumford, 32, of Penrith; Barry Craze, 41, of Wellington; Stephen Thompson, 21, of Wellington; Owen Evans, 37, of Dubbo; James Minter, 28, of Annandale; and Austin Griffis, 43, of Armatree. As well, three horsemen are in the march. Jack Perry, 60, and Jim Evans, 62, from Orange, are driving sulkies and Stewart Thompson from North Richmond looks magnificent on his steed in his full Light Horse cavalry regalia. Supporting the march are Rodney McKechnie, Frank Bensley, Robert MacLean, Patrick Shorey, Lyndee Lynch, Vilma Lynch, Mr and Mrs R. H. MacLean and Barbara Walker. The spirit in Gilgandra in the days leading up to the march was very special. For example, on the Thursday night before they left Apex put on a tobacco provisions night exactly as had occurred in 1915. On the Friday night there was a re-enactment of the 1915 grand ball. The events of that evening, with the singing, the costumes, the old films and the prayers I believe touched everyone very deeply. Over 400 people attended. On the Saturday morning before the marchers left, I had the pleasure of attending, along with several hundred others, an Aussie breakfast put on by the Quota Club similar to the one they had before the march in 1915. We then went to St Ambrose Church where Bishop Stanley Goldsworthy gave a moving service. At the end when the church erupted into Onward Christian Soldiers as the marchers walked out not many dry eyes were left, with the emotion of the moment. Soon after Shire President, Tony McGrane, and I, as the Federal member, wished the marchers well as they finally left Bridge Street on their 510 kilometre journey to Sydney. I wish to pay tribute to all those taking part in this march. I welcome the reports that many are joining the marchers on their entry to each town. The hospitality of the welcoming committees along the way has been overwhelming, too. The spirit of commitment shown by the 1915 Cooee marchers will leave an indelible imprint on the character of all those participating in this year's march and benefit them through the rest of their lives. We may not be at war as they were in 1915, but today we are fighting equally important economic, moral and other battles. If we reflect on the lessons and the directions that these marchers provide us with, we too can make a commitment to live our lives in more positive and productive ways to the ultimate benefit of Australia. Mr LAVARCH(Fisher)(10.39) —In Queensland, the sphere of local government has long been established. It first came into existence before Queensland achieved statehood. The legislation which governs local authorities in Queensland is the Local Government Act 1936. Generally it is an excellent piece of legislation which enables local authorities in Queensland to govern for the peace, welfare and good government of the territorial jurisdiction for which the local authority is responsible. One power which has been given over the years to local authorities, and in fact is now a compulsory requirement for all local councils of Queensland, is town planning. Since the late 1960s, all local authorities in Queensland have been required to enact a town planning scheme and to review that scheme at regular intervals of seven years. Although the particular local authorities have power to enact town planning schemes and to make decisions on town planning applications, the Local Government Minister retains a power to override the decisions of local authorities in respect of town planning schemes. It is a power that in essence should remain with the Minister because there will always be rare occasions on which it is necessary for the government of the day to overrule the actions of a local authority. However, it is by its very nature, at least theoretically, a power that should be exercised only on quite rare occasions. Therefore, it is rather unusual to note that in the 10 months from January to the beginning of October this year the Queensland Government, through the Local Government Minister, Mr Hinze, has overruled decisions on town planning schemes of Queensland local authorities on some 83 occasions. That is quite an extraordinary figure, given the short period involved. Those decisions have come about in three different ways. The first is through a direct initiative of the Minister, commonly known as a ministerial rezoning. Since January that has occurred on some 52 occasions in Queensland. The unfortunate aspect of such a decision being made is that a particular developer is able to gain a huge commercial advantage. A town planning scheme, by its very nature, sets out the uses to which the land owners and residents of the area understand that a particular block of land may be put. When the Minister overrides the decision on a particular scheme, there is no right of appeal to the Local Government Court and there is no input by the local community. Hence, there is generally an undemocratic exercise of power. On quite a number of occasions that power, in my opinion, has been used wrongly. One example involves the Taylor Point resort in Cairns. In this case a particular shire council had decided against a developer's application to establish a tourist resort. The developer quite correctly availed itself of the provisions of the Local Government Act and lodged an appeal with the Local Government Court. Halfway through the court process, during which local residents employed their right as objectors and became respondents to the appeal, the Local Government Minister moved in and simply rezoned the land to allow the development to proceed. That cut across not only the town planning scheme as it existed and the decision of the local council but also the jurisdiction of the Local Government Court and the express will of the local residents. That sort of situation has arisen on some 52 occasions in Queensland since January this year. Mr Sciacca —Typical National Party. Mr LAVARCH —As the honourable member for Bowman points out, that is typical of the National Party. The Local Government Act is overruled also in the method by which crown land is handed over to private developers. The express provision of the grant allows for the provisions of the relevant town plan not to apply. I instance in particular the case of the ill-fated chlorine plant, with which the honourable member for Bowman is familiar, and which fortunately did not proceed. I instance also a development that adjoins my electorate on the Pine River where a particular canal estate development involves crown land. That land has now been ceded to the developer without any reference of the matter to the Brisbane City Council or any opportunity for the Council to impose conditions. It is outrageous that that sort of activity should go on when there is no need for it, when special circumstances do not pertain and when the local authority has not engaged in outlandish behaviour. Madam SPEAKER —Order! The honourable member's time has expired. Mr TUCKEY(O'Connor)(10.44) —Constantly the Opposition has raised the question of the viability of and the sensible arrangements pertaining to present day industrial relations. Honourable members will be well aware that all of this came about at the time of Federation and that the rules made in those days were specific to the problems of those days. At the time power certainly lay with the employer groups. But times have changed greatly. I bring to the attention of the House tonight a problem that occurred with one of the shire councils in my electorate. I understand that a similar problem is likely to occur with others. It highlights the stupidity of the arrangement that we call the law today. As honourable members know, the law specifies very clearly the working conditions of workers, and an employer is always obliged to keep them although, on many occasions, the work force sees otherwise. The Shire of Wickepin in my electorate has brought to my attention the following matter. I refer to its own case history. The Shire of Wickepin operates an outside work force of approximately 12 employees. In August 1980, at the request of the outside staff, council gave its consent for the implementation of a nine-day fortnight. This is not uncommon in rural areas such as mine. I have had similar requests from the work force where I used to live in the north-west of Western Australia. Quite frequently workers had to work up to 200 miles away from the town. Quite sensibly, working in sub-standard conditions in the bush, they wanted to get the job finished; they wanted to work long hours; they wanted to work through weekends and then take the time worked over and above the normal working day in lieu of overtime. We were always obliged to tell them that unfortunately we did not have the legal power to let them do that although they had requested it. On one occasion when I operated a trucking business I was in a situation in which, because of a dispute with a single employee, my decision, which was made at the request of workers, to allow them to commence work at 6 o'clock instead of 7 o'clock in the morning to avoid the heat of the far north-west of Western Australia, caused me to have to pay them retrospectively an additional 15 per cent for all hours worked because I had agreed to let them start work before 7 o'clock. The shire workers employed in the Shire of Wickepin were advised that a Mr Ket Vines from the Municipal Employees Union met with employees and after the staff became financial members of the union he verbally sanctioned the agreement. So the union was involved with the workers and everybody was happy. I am talking about 1980. Since then, in May 1986, Mr Mike Spencer, an inspector with the Department of Employment and Industrial Relations-a government employee, not a union employee-carried out an inspection of the council's pay records. On 28 May 1986 the council was formally notified of an alleged breach of the Local Government Officers (Western Australia) Award 1975 and the Municipal Employees (Western Australia) Award 1982. In general terms, the breach is a technical one. The staff should not have worked in excess of eight hours per day without being paid overtime. The agreement was that employees worked a nine-day fortnight, 80 hours per fortnight, 35 hours in the first week and 45 in the second. One would not think that that arrangement was all that bad because the workers got one extra day a week which they could spend at home with their families or on which they could travel to the city, which many people who live in my electorate wish to do when they have a long weekend. The outcome was that the council was called upon to pay about $100,000 in overtime. I register my complaint. I do not think that was necessary. The agreements had been made; they were well understood and they had stood for seven years before this situation arose. I made all sorts of representations to the Minister for Industrial Relations (Mr Willis) and I appreciate his position; the matter is outside his control. There is nothing he can do about it. Apparently there is now some move to vary the award, but surely in such country areas workers should be able to make agreements. As I have said, in this case the workers made the approach, as they did in the example I gave involving me. The union was in agreement and the workers got a more flexible arrangement, something that is now considered the order of the day. Suddenly government inspectors came in and the ratepayers of that district have had to find $100,000 they can ill afford. The council is now concerned as to what its future might be. Madam SPEAKER —Order! The honourable member's time has expired. Mr COURTICE(Hinkler)(10.49) —Tonight I would like the House to acknowledge the people of Gladstone for their community spirit in bringing to fruition the multipurpose pool. The project was begun two years ago by a small group of people and the original design was carried out by Barry Moore of Frocot Engineering. Gladstone Engineering and program chairman, Milton Blain, have continued the project from its original design. Over $200,000 is needed to bring the project to fruition. Contributions to the project are tax deductible. Any honourable member or business person who wishes to make a donation should contact Mrs Mary Hanson in Gladstone. Indeed, Mrs Hanson has brought this project to my attention. Mrs Hanson has been and is an outstanding member of the Gladstone-Port Curtis community. Her late husband, Martin, was a well respected and energetic member of the community and a popular member of parliament. Her late father was the outstanding Labor Premier, Ned Hanlon. Mrs Hanson has continued a fine tradition of community involvement. The multipurpose pool is another of the many community projects with which she has been associated. The pool itself will benefit many special interest groups such as young children learning to swim, asthmatics receiving therapeutic treatment and, importantly, the aged, who prefer warmer water. The pool will provide relief for people with painful arthritic conditions. Importantly, exercises can be carried out in groups. This makes treatment sessions a social experience for the older age groups. The pool is going to be totally accessible for aged and handicapped people, including those in wheelchairs. It will contain two separate heated therapy areas with manageable handrails. It can be heated to a maximum of 32 degrees and will be able to be used for 10 months of the year. The Australian Bicentennial Authority has recognised the project for 1988 and the first sod will be turned next Australia Day. The project has attracted widespread support, being backed by the Gladstone Port Authority and the Gladstone City Council. When completed, the pool will be the first multipurpose heated pool outside Brisbane and will cater for the special needs of 360 people. This is an outstanding community project. I believe that it deserves the attention and best wishes of the House. I know that all honourable members hope that the group can meet its targeted amount of $200,000. Question resolved in the affirmative. House adjourned at 10.52 p.m. The following notices were given: Mr West to move- That, in accordance with the provisions of the Public Works Committee Act 1969, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report: Fitout of accommodation for the Department of Administrative Services, Chatswood, New South Wales. Mr West to move- That, in accordance with the provisions of the Public Works Committee Act 1969, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report: Construction of State Head Office, Australia Post, Prince Alfred Park Centre, 219-241 Cleveland Street, Redfern, New South Wales. The following papers were deemed to have been presented on 2 November 1987: Export Control Act-Export Control (Orders) Regulations-Order-1987-No. 17-Export Control (Fees) as amended (Amendment). Meat Inspection Act-Meat Inspection (Orders) Regulations-Order-1987-No. 5-Meat Inspection (Fees) as amended (Amendment). Public Service Act-Determinations-1987-Nos. 91, 102. The following answers to questions were circulated: (Question No. 115) Mr Hollis asked the Minister for Resources, upon notice, on 21 September 1987: (1) When did Australia last attend a meeting under the auspices of the (a) Agreement Establishing the International Bauxite Association, (b) Agreement Establishing the Association of Iron Ore Exporting Countries, (c) Agreement to Establish the Intergovernmental Council for Copper Exporting Countries and (d) Agreement Establishing the Association of Tin Producing Countries. (2) What other states are parties to each of these agreements. Mr Peter Morris —The answer to the honourable member's question is as follows: (1) (a) 11-15 May 1987 (b) 23-24 April 1987 (c) 25-26 June 1987 (d) 28-29 September 1987. (2) (a) Ghana, Guinea, Guyana, India, Indonesia, Jamaica, Sierra Leone, Suriname, Yugoslavia. (2) (b) Algeria, India, Liberia, Mauritania, Peru, Sierra Leone, Sweden, Venezuela. (2) (c) Full members: Peru, Chile, Zaire, Zambia.Associate Members: Indonesia, Papua New Guinea, Yugoslavia. (2) (d) Bolivia, Indonesia, Malaysia, Nigeria, Thailand, Zaire. (Question No. 118) Mr Hollis asked the Minister for Resources, upon notice, on 21 September 1987: (1) In which States have arrangements been made for the federal Government to provide all meat inspection services in abattoirs, and on what dates were the arrangements made. (2) How many meat inspectors are employed in export abattoirs in other States by the (a) Federal Government and (b) State Government. (3) In which of those other States have negotiations been undertaken for the Federal Government to provide all meat inspection services in abattoirs, and what stage has been reached in the negotiations. Mr Peter Morris —The answer to the honourable member's question is as follows: (1) N.S.W.... 1 July 1983 A.C.T.... 1 June 1986 Tas.... 1 July 1986 N.T.... 15 December 1986 S.A.... 1 July 1987 In other States the Commonwealth has entered into arrangements whereby it provides domestic inspection in export registered abattoirs only viz: Vic.... 12 December 1984 Qld... 1 April 1985 W.A.... 23 February 1987 (2) (a) In those States where full National Inspection Service (NIS) arrangements do not yet apply, the following meat inspectors are employed in export registered abattoirs: Vic.... 354 Qld... 432 W.A.... 151 (b) There are no state Government meat inspectors employed in export registered abattoirs. (3) As noted at (1) above the Commonwealth has negotiated with Victoria, Queensland, and Western Australia to have them partially participate in the Commonwealth National Inspection Service for meat and is prepared at any time to enter into further negotiations to facilitate the objectives of NIS. In this regard, it should be noted that the Victorian Minister for Agriculture and Rural Affairs introduced into the Victorian Parliament on 9 October 1987 a Bill for an Act to transfer that State's domestic meat inspection service to the Commonwealth and has reopened negotiations with the Commonwealth on the matter. (Question Nos 151 to 180) Mr Cowan asked all Ministers, upon notice, on 24 September 1987: (1) What litigation relating to Government activities currently is pending against (a) the Minister, (b) the Minister's Department (c) statutory authorities and instrumentalities within the Minister's portfolio and (d) the Commonwealth as a result of the activities of agencies within the Minister's portfolio. (2) Will the Minister provide a summary of the claimant's writ or writs in each case. Mr Hawke —As indicated above, the honourable member asked identical questions of all Ministers. The following answer is provided on behalf of all those Ministers: (1) and (2) Advice from the Attorney-General's Department indicates that there are currently approximately 50,000 matters on hand in the offices of the Australian Government Solicitor. Additionally a number of statutory authorities engage the services of private law firms rather than use the Australian Government Solicitor's offices. Although not all these matters comprise litigation, a significant proportion of them do. For all Ministers to assemble and provide the information requested, particularly the summary of the claimant's writ in each case, would entail significant diversion of departmental resources and I am not prepared to authorise the time and expense that would be involved. However, if the honourable member wishes to obtain more specific information I will examine the matter to see what information can be provided. (Question No. 226) Mr Blunt asked the Minister for Social Security, upon notice, on 8 October 1987: (1) How many office locations does his Department have. (2) How many offices are equipped with the STRATPLAN Wang computers. (3) How many Wang computers does each office have and when did each receive its computers. (4) What is the cost of each computer. (5) What was the cost to install the computers. (6) Were there additional costs connected with the purchase and installation of the computers; if so, what are the details for each office. (7) Where are the mainframe computers located in each capital city. (8) What sum did each mainframe computer cost to (a) purchase and (b) install. (9) Where is the computer headquarters in Canberra and what sum did it cost to (a) purchase and (b) install. (10) Was the building specially constructed for the computer; if so why. (11) Are the walls about 1.2m thick; if so, why and of what materials are they made. (12) If the walls are not about 1.2m thick, how thick are they and of what materials are they made. (13) Could the computer have been housed in a cheaper building; if so, why was the building specially constructed. (14) If the computer could not have been housed in a cheaper building, why not. (15) Is STRATPLAN fully operational; if so, on what date did it become fully operational. (16) If STRATPLAN is not fully operational, why not and when will it be fully operational. (17) What was STRATPLAN's aim. (18) Has it achieved its aim. (19) If it has not achieved its aim, why not. (20) Was STRATPLAN implemented within its budget estimate; if not, by what sum and in what respects did it exceed the estimate. (21) If STRATPLAN was implemented within its budget, by what sum was this achieved. (22) What percentage of each day are the STRATPLAN computers used for the purposes of STRATPLAN. (23) Are the computes used for other purposes; if so, for what purposes are they used. (24) If the computers are not used for other purposes, why not. (25) Have the STRATPLAN computers prevented or detected any welfare fraud; if so, (a) what is the value of the fraud detected or prevented, (b) what type of welfare benefits are involved, (c) where had the fraud been occurring and (d) when was it detected. (26) If the computers have not prevented or detected welfare fraud, why not. (27) What sum was spent on training departmental staff to enable the implementation of STRATPLAN. (28) How was the money spent and when was it spent. (29) Was all the expenditure necessary; if so, why. (30) If all the expenditure was not necessary, why was the money spent. (31) Have departmental staff who were trained to use STRATPLAN required all the skills and information derived from their training when using STRATPLAN computers; if so, do they require further training. (32) If the staff do not require all their skills while using the computers, why were they so trained. (33) What comments have staff unions made to his Department concerning STRATPLAN. (34) What suggestions or concerns have been adopted by his Department. (35) Why were the suggestions or concerns adopted. (36) If no suggestions or concerns have been adopted, why not. Mr Howe —The honourable member's question calls for a considerable amount of detail. It appears to be based on a bizarre set of claims made in a newsletter entitled Inside News. As he may be aware, the Stratplan project has been monitored throughout its implementation by the Joint Parliamentary Committee of Public Accounts. To assist the Committee with its work, my Department has supplied it regularly with reports on progress. Some of these provide most of the detail that the honourable member's question seeks. Excerpts from these reports are at Attachments A and B. The answers to many of the parts to the question will refer to these documents: (1), (2) and (3) All Department of Social Security offices are equipped, or will be equipped, with Wang computers. Attachment A sets out each departmental location and the date at which the site was equipped or is to be equipped. Each entry in the attachment represents one computer installation. Certain larger offices require more than one Wang computer to support their work and, therefore, appear more than once in the schedule. In most cases a regional office has a single minicomputer supporting a number of VDU and printer terminals. These are the computers which are used by Social Security staff for most of their daily work. All regional offices also have a small number of microcomputers used for certain special applications such as overpayments calculation. In a few offices, usually very small offices at remote locations, a microcomputer has been installed rather than a minicomputer. (4), (5) and (6) The specific prices of the items of equipment purchased under the STRATPLAN contracts are regarded as commercial-in-confidence. Attachment B sets out the amounts of funds approved in 1983 by the Government for expenditure on the STRATPLAN re-equipment project and the amounts actually spent. The installation cost is a part of the purchase cost and is not separately identifiable. Site preparation costs are shown in Attachment B. (7), (8) and (9) In the interests of security I would prefer not to disclose the precise sites of the Department's mainframe computers. The purchase costs of the Department's mainframes and associated peripheral equipment are included in Attachment B. Again, there was not separate installation cost. Site preparation costs are included in Attachment B. (10) No. Suitable accommodation was available. The building was designed and built by Telecom but was no longer required by that body. Being suitable for housing computer equipment, it was acquired by the Department of Administrative Services and is used by a number of Commonwealth agencies as a mainframe computer site. (11), (12), (13) and (14) See (10). (15) STRATPLAN became fully operational in each departmental location on the dates shown in Attachment A. (16) This question does not apply. (17) STRATPLAN's aim was to replace inadequate and obsolete equipment and outmoded systems, to provide the Department with necessary capacity to prevent decline in service to pensioners and beneficiaries and to respond adequately to the Government's social security requirements. (18) Yes. (19) This question does not apply. (20) and (21) Yes. This is set out in Attachment B. (22), (23) and (24) The purpose of STRATPLAN is given in the answer to (17) above. The equipment is used wholly for these purposes. (25) Yes; (a) No figure is available on fraud detected because of the way in which statistics are collected. The value of fraud prevented is obviously unknown; (b) Fraud has not been confined to any particular benefit; (c) See answer to (a) above; (d) the Department has conducted fraud detection for many years. These activities have been enhanced because of the availability of STRATPLAN facilities. (26) See (25). (27) and (28) Training expenditure for STRATPLAN is set out in Attachment B. (29) Yes. The expenditure was necessary to ensure that departmental staff were trained in the use of the new computing equipment and products to take full advantage of the opportunities created by the STRATPLAN environment. (30) This question does not apply. (31) Yes. As new applications are introduced from time to time that take advantage of the STRATPLAN computing environment staff will need training in those new applications. (32) This questions does not apply. (33) to (36) The Department has engaged in a long and detailed process of consultation on the STRATPLAN project with the unions representing the staff. It is not aware of any outstanding major concern put forward by the unions during this process which has not been addressed. As further systems development takes place in the STRATPLAN computing environment it is reasonable to expect new concerns to arise which the Department will address. DEPARTMENT OF SOCIAL SECURITY This schedule shows implementation dates (actual and proposed) for each Wang Computer installation in the Department of Social Security. October 1987 Regional Office Sites Date of implementation of Stratplan products NEW SOUTH WALES AND ACT Liverpool ... 24.09.84 Redfern ... 24.09.84 Mt Druitt ... 24.09.84 Lismore ... 24.09.84 Merrylands ... 01.10.84 Blacktown ... 29.10.84 Maroubra ... 24.12.84 Wagga Wagga ... 24.12.84 West Ryde ... 24.12.84 Fairfield ... 02.01.85 Orange ... 07.01.85 Newtown ... 14.01.85 Charlestown ... 14.01.85 Goulburn ... 14.01.85 Nowra ... 14.01.85 Petersham ... 21.01.85 Gosford ... 21.01.85 Maitland ... 28.01.85 Cabramatta ... 04.02.85 Darlinghurst ... 04.02.85 Queanbeyan ... 04.02.85 Newcastle ... 11.02.85 Bankstown ... 11.02.85 Dubbo (1) ... 18.02.85 Grafton ... 25.02.85 Coffs Harbour ... 25.02.85 Bondi Junction ... 25.02.85 Tamworth ... 29.04.85 Byron Bay ... 29.04.85 Campbelltown ... 06.05.85 Rockdale ... 20.05.85 Kempsey ... 27.05.85 Griffith ... 03.06.85 Canberra ... 15.07.85 Murwillumbah ... 22.07.85 Marrickville ... 22.07.85 Armidale ... 29.07.85 Belconnen ... 29.07.85 Warrawong ... 15.08.85 Wyong ... 12.08.85 Albury ... 19.08.85 Bega ... 02.09.85 Caringbah ... 02.09.85 Cessnock ... 10.09.85 Broken Hill ... 16.09.85 Revesby ... 16.09.85 Manly ... 16.09.85 Crows Nest ... 23.09.85 Hurstville ... 08.10.85 Broadmeadow ... 08.10.85 Chatswood ... 08.10.85 Bathurst ... 16.12.85 Moree ... 16.12.85 Penrith ... 28.01.86 Parramatta ... 03.02.86 Parkes ... 24.02.86 Dee Why ... 24.02.86 Sutherland ... 24.02.86 Hornsby ... 28.04.86 Taree ... 28.04.86 Port Macquarie ... 28.04.86 Auburn ... 16.06.86 Mayfield ... 23.06.86 Baulkham Hills ... 13.10.86 St Marys ... 20.10.86 Warilla ... 10.11.86 Wollongong ... 30.03.87 Woden ... 30.03.87 Randwick ... 21.04.87 Ashfield ... 11.05.87 Lithgow ... 25.05.87 Cardiff ... 25.05.87 Belmore/Campsie ... 26.10.87 Corrimal ... 16.11.87 (interim) May 88 (final) Dapto ... 23.11.87 (interim) April 88 (final) Windsor ... 07.12.87 (interim) Sep 88 (final) Strathfield ... 07.12.87 Sydney City ... 06.88 (final) Sydney Computer Centre 24.09.84 Liverpool Training Centre (to Aussat Hse 26.5.86) 24.09.84 Australia House 1 ... 24.09.84 Australia House 2 ... 15.10.84 Area West ... 15.10.84 Area South Metropolitan 15.10.84 Area Hunter ... 15.10.84 Area North ... 04.03.85 Australia House 3 (Training) 23.09.85 Dubbo 2 ... 18.02.85 Area South West (Queanbeyan) 05.08.85 Margaret St ... 20.03.86 Finance (`FACTS' system) 09.03.87 Social Security Appeals Tribunal 16.11.87 Area South-East (Wollongong) 12.87 QUEENSLAND Southport ... 25.02.85 Mount Isa ... 25.02.85 Redcliffe ... 27.02.85 Cairns ... 29.04.85 Fortitude Valley ... 01.05.85 Chermside ... 20.05.85 Burleigh Heads ... 20.05.85 Toowoomba ... 22.05.85 Inala ... 27.05.85 Alderley ... 27.05.85 Woodridge ... 03.06.85 Stones Corner ... 24.06.85 Gympie ... 15.07.85 Mt Gravatt ... 15.07.85 Gladstone ... 07.08.85 Nundah ... 07.08.85 Townsville ... 28.10.85 Wynnum ... 28.10.85 Aitkenvale ... 30.10.85 Nambour ... 30.10.85 Maryborough ... 07.04.86 Bundaberg ... 08.04.86 Maroochydore ... 22.09.86 Rockhampton ... 22.09.86 Mackay ... 08.12.86 Warwick ... 12.01.87 Toowong ... 09.02.87 Annerley ... 09.02.87 Goodna ... 23.02.87 Westcourt ... 23.02.87 Ipswich ... 23.03.87 Thursday Island ... 22.09.87 Non-Regional Office Sites Brisbane State Office 1 ... 08.09.84 Brisbane Computer Centre 25.10.84 Brisbane Training ... 10.04.85 Brisbane State Office 2 ... 20.10.86 Finance (`FACTS' system) 09.02.87 Social Security Appeals Tribunal ... 16.06.87 TASMANIA Mowbray ... 08.07.85 Hobart ... 29.07.85 Burnie ... 31.07.85 Launceston ... 19.08.85 Bellerive ... 11.11.85 Devonport ... 09.06.86 Glenorchy ... 30.06.86 Queenstown ... 18.08.86 Non-Regional Office Sites Hobart State Office ... 07.07.84 Hobart Computer Centre 15.12.84 Hobart Training ... 01.03.85 VICTORIA Footscray ... 28.10.85 Peninsula ... 11.11.85 Corio ... 11.11.85 Fitzroy ... 11.11.85 Knox ... 18.11.85 Lalor ... 02.12.85 Bendigo ... 02.12.85 Prahran ... 03.12.85 Coburg ... 09.12.85 St Albans ... 03.02.86 Wendouree ... 10.02.86 Moonee Ponds ... 17.02.86 Newport ... 17.03.86 Richmond ... 24.03.86 Caulfield ... 07.04.86 Hamilton ... 21.04.86 Nth Melbourne ... 28.04.86 Mildura ... 19.05.86 Ballarat ... 02.06.86 Cheltenham ... 10.06.86 Sale ... 16.06.86 Sth Melbourne ... 07.07.86 Dandenong ... 14.07.86 Springvale ... 25.08.86 Brunswick ... 25.08.86 Geelong ... 17.11.86 Werribee ... 02.03.87 Wangaratta ... 25.05.87 Frankston ... 09.06.87 Box Hill ... 22.06.87 Glenroy ... 26.06.87 Sunshine ... 29.06.87 Heidelberg ... 02.07.87 St Kilda ... 21.08.87 Kangaroo Flat ... 24.08.87 Horsham ... 07.09.87 Warrnambool ... 21.09.87 Shepparton ... 28.09.87 Swan Hill ... 05.10.87 Ringwood ... 26.10.87 Camberwell ... 02.11.87 Boronia ... 09.11.87 Morwell ... 23.11.87 Belmont ... 30.11.87 Northcote ... 07.12.87 Preston ... 29.02.88 Greensborough ... 07.03.88 Oakleigh ... .05.88 Non-Regional Office Sites Melbourne State Office 1 01.08.84 Melbourne Computer Centre 31.05.85 Melbourne State Office 2 31.08.85 Melbourne State Office 3 ... 21.10.85 Area East ... 01.09.86 Melbourne Central Benefits Unit 22.09.86 Melbourne State Office 4 06.04.87 Melbourne Training Centre 13.04.87 Social Security Appeals Tribunal 16.07.87 Area North ... 31.08.87 Finance (`FACTS' system) 30.11.87 Area South ... 14.03.88 Area West ... Not scheduled SOUTH AUSTRALIA Marden ... 04.12.85 Adelaide ... 04.12.85 Edwardstown ... 04.12.85 Elizabeth ... 13.01.86 Modbury ... 10.02.86 Gawler ... 17.02.86 Norwood ... 24.02.86 Whyalla ... 24.03.86 Salisbury ... 14.04.86 Croydon ... 28.04.86 Kadina ... 16.06.86 Murray Bridge ... 16.06.86 Port Augusta ... 16.06.86 Berri ... 23.06.86 Port Lincoln ... 30.06.86 Port Adelaide ... 18.08.86 Mount Gambier ... 15.09.86 Port Pirie ... 06.10.86 Woodville ... 01.12.86 Glenelg ... 15.12.86 Torrensville ... 23.03.87 Noarlunga ... 09.11.87 (interim) Apr 88 (final) Hawthorn/Parkside ... 16.11.87 (interim) Jan 89 (final) Enfield ... 23.11.87 (interim) Apr 88 (final) Marion ... Nov 88 Non-Regional Office Sites Adelaide State Office 1 ... 22.04.85 Adelaide Computer Centre ... 29.04.85 Edwardstown Training Centre ... 21.10.85 Adelaide State Office 2 ... 23.06.86 Finance (`FACTS' system) ... 12.10.87 Regional Office Sites Word processing On-line inquiry /On-line information WESTERN AUSTRALIA Rockingham ... 16.06.86 14.09.87 Midland ... 23.06.86 14.09.87 Rivervale ... 08.07.86 (was Causeway) 14.09.87 Morley ... 15.07.86 14.09.87 Mandurah ... 01.10.86 14.09.87 Fremantle North ... 01.11.86 14.09.87 Broome ... 10.11.86 14.09.87 Gosnells ... 17.11.86 14.09.87 Innaloo ... 11.05.87 14.09.87 Cannington ... 18.05.87 14.09.87 Albany ... 25.05.87 09.09.87 Geraldton ... 29.06.87 14.09.87 Fremantle ... 20.07.87 14.09.87 Mirrabooka ... 24.08.87 14.09.87 Bunbury ... 16.11.87 Perth East ... 23.11.87 Victoria Park ... 30.11.87 Kununurra ... 07.12.87 Perth West ... 07.12.87 South Hedland ... 14.12.87 Kalgoorlie ... 21.12.87 Carnarvon ... not scheduled Derby ... not scheduled Karratha ... not scheduled Northam ... not scheduled Non-Regional office sites Date of implementation of Stratplan products Perth State Office 1 ... 23.08.84 Perth State Office 2 ... 08.09.86 Perth Training Centre ... 09.03.87 Perth Computer Centre ... 29.06.87 Perth State Office 3 ... not scheduled Social Security Appeals Tribunal ... not scheduled CENTRAL OFFICE + NORTHERN TERRITORY Non-Regional Office Sites National Computer Centre ... 01.08.83 Technical Quality Assurance ... 01.08.83 Training Centre 1 ... 23.11.83 Bank House ... 17.01.84 Technical Development 2 ... 17.01.84 Technical Development 1 ... 03.02.84 Technical Development 3 ... 03.02.84 Training Centre 2 ... 17.02.84 Juliana House 2 ... 15.05.84 Benefits Systems/Facilities 1 ... 29.09.84 Benefits Systems/Facilities 2 ... 06.10.84 Benefits Systems/Facilities 3 ... 06.10.84 Juliana House 1 ... 27.02.85 Woden Cosmopolitan Centre ... 31.05.85 Juliana House 3 ... 02.04.87 Benefits Systems/Facilities 4 ... 20.04.87 Technical Development 4 ... 21.04.87 Juliana House 4 ... 01.06.87 Woden House ... 22.06.87 NORTHERN TERRITORY Regional Office Sites Darwin ... 08.09.86 Tennant Creek ... 22.06.87 Nhulunbuy ... 25.06.87 Alice Springs ... 06.07.87 (interim) Jan 88 (final) Katherine ... 15.07.87 Casuarina ... 28.09.87 Non-Regional Office Sites Darwin State Office ... 12.03.85 Darwin Training Centre ... 09.06.87 Finance (`FACTS' system) ... 01.02.88 Stratplan: Excerpt from Report to Public Accounts Committee and Australian Audit Office Report 2: Quarterly Financial Progress Report Period: From Commencement of Stratplan to 30 June 1987 STRATPLAN RE-EQUIPMENT Expenditure 1981/82-1987/88 as at 30/6/87 Item Spend to 30.6.86 $m Spend 1986-87 $m Estimates 1987-88@ $m Total $m 1983 Approval $m ## 1 Computing Equipment ... 85.715 11.947 9.104 106.766 108.300 2 Data Management Software ... 1.667 .464 2.131 1.800 3 Computer Systems Maintenance (a) 13.395 10.560 23.955 29.100 4 Power Supplies ... 1.161 .501 .560 2.222 2.400 5 Mainframe Computer Centre Site- works 11.405 1.065 12.470 17.60 6 Regional Office Siteworks (a) ... 13.676 2.738 16.414 17.500 7 Contract Personnel ... 14.941 0.000 14.941 14.300 8 Consultants (a) ... 0.598 2.89 .887 .640 9 Telecom Charges (a) ... 7.998 6.400 14.398 15.600 10 Systems Training ... 2.447 .901 3.348 4.760 11 Information/Publicity ... 0.024 .025 0.049 .080 12 Vendor Support Staff ... 1.119 0.000 1.119 1.220 13 Interstate Travel (a) ... 3.472 1.098 4.570 4.000 14 Systems Training Travel (a) ... 3.670 1.425 5.095 8.100 15 O/seas Negotiations (a) ... 0.172 0.000 0.172 .060 TOTAL STRATPLAN ... 161.460 37.413 9.664 208.537 225.460 ## These figures relate to the Government Decision ($m 234), less Exchange rate adjustment. @ 3 year forward estimates (approval subject to normal annual budget processes). (a) Some components of this item cannot be costed to a particular programme and thus contain elements of other projects. (1) COMPUTING EQUIPMENT Government decisions of mid-1983 approved $108.3 million for the purchase of computing hardware and software to replace existing equipment. Details are: Supplier Approved Cost $m WANG ... 62.6 AMDAHL ... 24.2 STO ... 14.9 Memorex ... .03 Telex (Raytheon) ... .7 Systech ... .02 Quest ... .02 Boole & Babbage ... .09 BH Consultants ... .1 Techway ... .03 Tektronics ... .2 SKK ... .2 UCCEL (CSA) ... .3 IBM ... 1.6 Datacraft ... 1.8 Other ... 1.5 Total Approval (1983) 108.29 In December 1985, Government approved acquisition of 210 personal computers for the Overpayments system, which will result in an overall saving of $400,000 from Stratplan hardware. It is estimated that there will be an additional slippage of $450,000 in this item, from 1986-87 to 1987-88. (2) DATA MANAGEMENT SOFTWARE Model 204 software from Computer Power. The estimate of expenditure for this item in 1986-87 has risen by $30,000 due to Exchange rate fluctuations. (3) COMPUTER SYSTEMS MAINTENANCE Maintenance charges for the above items. This item reflects the progressive scaling up of maintenance charges as equipment is installed and commissioned. (4) POWER SUPPLIES Uninterruptable power supplies for mainframe computer sites. Delays have resulted in an expected slip in expenditure of $300,000 into 1987-88. (5) Mainframe Computer Centre Siteworks-Outfitting, purchase, lease and removals associated with mainframe computer sites. (6) Regional Office Siteworks-Costs associated with providing suitable Regional Office environments in order to allow the installation of equipment. This item includes fitout, lighting, window treatments and air conditioning for computer rooms. (7) Contract Personnel-The cost of contract personnel engaged in the re-equipment project. (8) Consultants-Consultants reporting on various aspects of Stratplan and Stratplan-related implementation, and monitoring and performance matters. Many consultancies charged to this item are not specifically limited to the Stratplan project, as their terms of reference often encompass broader, related issues. (9) Telecom Charges-As it is impractical to identify Telecom costs by project, this item includes pro-rata charges incurred by the Department for Telecom data transmission facilities. (10) Systems Training-Costs of providing technical training to staff involved in operating new equipment and training Regional Office staff in the use of computing equipment and products. This item also includes training aids and equipment required to provide the above training to departmental staff. (11) Information/Publicity-Information dissemination regarding the implementation of Stratplan products, eg: production of Stratplan newsletters, videos and information kits. (12) Vendor Support Staff-Technical expertise regarding equipment and software is provided by vendors in order to tailor their products to departmental requirements. (13) Interstate Travel-Interstate travel by systems staff relating to products and related systems installation. (14) Systems Training Travel-Travelling expenses by officers engaged in training staff in the operation of systems and equipment. Also included is the cost of travel associated with the provision of relief staff whilst officers are attending training courses. (15) Overseas Negotiations-Cost of negotiations with various oveseas suppliers regarding the provision of equipment and software. STRATPLAN RE-EQUIPMENT-TECHNICAL NEW POLICY Expenditure 1981-82-1987-88 Item Spend to 30.6.86* $m Spend 1986-87* $m Estimates 1987-88+ $mTotal $m 1 Computing Equipment... 15.141 12.781 16.074 43.996 2 Maintenance... 1.054 2.507 3.608 7.169 3 Telecom... 1.399 1.892 3.291 4 Software... 1.323 .993 2.316 5 Systems Training... 0.224 .224 6 Office Services... 0.900 .900 7 Vendor Support... 0.065 .065 8 Site Fit Out... 1.180 .827 1.282 3.289 TOTAL NEW POLICY... 21.286 19.000 20.964 61.250 * Actual Expenditure + 3 year forward estimates (approval subject to normal annual budget processes) EXPLANATORY NOTES-STRATPLAN RE-EQUIPMENT-APPROVED NEW POLICY This table shows actual and latest projected expenditure on the Technical New Policy Proposal approved by Government in May 1985. An explanation of each item included in the table is set out below: (1) Computing Equipment-Government decision of May 1985 approved the outfitting of new sites with computer hardware to maintain compatibility with other departmental offices. Enhancement to the mainframe computers is included to carry the additional processing load. (2) Maintenance-Maintenance charges relating to the above equipment. (3) Telecom-Costs of extra data lines associated with the additional offices. (4) Software-Costs of additional software required for the new offices. (5) Systems Training-Additional training resources to cover the training of extra staff in the new offices. As no additional funds have been provided for this item in 1986-87, the costs have been absorbed in Stratplan training costs. (6) Office Services-The initial costs of Office Services such as fuel, power, cleaning, water, rates, etc, were costed to this item. However, these have been absorbed into the Department's ongoing base for future years. (7) Vendor Support-The extension of Wang support to cover the new offices. (8) Site Fitout-Fitout costs of the new offices to allow installation of computer equipment. STRATPLAN TENDERING AND NON-EQUIPMENT REQUIREMENT Expenditure 1981-82-1988-89 Item Spend to 30.6.86* Spend 1986-87* Estimates@ 1987-88 1988-89 Total $m $m $m $m $m 1 TENDER EVALUATION Computing Equipment ... 0.086 . . . . . . 0.086 Consultants ... 0.256 . . . . . . 0.256 2 CONSULTANT REQUIREMENT Consultants ... 0.560 . . . . . . 0.560 3 IMPLEMENTATION Freight and Exchange Rate ... 15.580 8.190 6.000 4.712 34.482 Wang Cable ... 0.724 .201 . . . . 2.029 TOTAL ... 17.206 8.391 6.000 4.712 37.413 * Actual expenditure. @ 3 year forward estimates (approval subject to the normal budget process) Explanatory Notes-Stratplan Tendering and Non-Equipment Requirement. This table details unavoidable other costs directly associated with the Stratplan tendering process and non-equipment contractual expenditure. Prior to Government agreement in mid-1983, costs were incurred in preparation of the requests-for-tender and examination of the options open to the Department. Further costs were incurred during the evaluation processes. Unavoidable costs of implementation are also shown. (1) Tender Evaluation-Following the issue of requests-for-tender early in 1982, a number of Tandy TRS 80 microcomputers were purchased by the Department for use in the conduct of the tender evaluation. Independent consultants were also engaged by the Department to assist with the evaluation. (2) Consultant Requirement-In order to determine the direction the Department's ADP re-equipment program should follow, a number of consultants were engaged to assist in the examination of proposals and/or review decisions being taken by the Department. The Department's ADP Strategic Plan of 1981 was reviewed by independent consultants, as were the Stratplan requests-for-tender. Other areas covered by consultants included database, Telecom, on-line communications and project management. (3) Implementation-Freight and Exchange Rate: Cost estimates for equipment were necessarily based on prices tendered in mid-1982. At that time the exchange rate was close to $A = $US 1, and this was the basis of most tenderers' prices. A devaluation occurred just before the conclusion of the tender evaluation, taking the total Stratplan cost from $A225m approx. to $A234m approx. The actual variation from the tendered price for a particular piece of equipment can only be determined when the invoice is received by the Department, after verification by the Department of Administrative Services. Included at this item are costs of reimbursement of freight charges as per contract conditions not foreseen at the time of the Government decision. This item includes exchange rate variation payments for all ADP equipment purchases. Prior to 1985-86 this was all Stratplan related. In 1985-86 some $1.8m was attributable to the Technical New Policy proposal, with the remainder being Stratplan related. For the 1986-87 financial year, the breakup of the estimated exchange rate variation charges for the ADP equipment program has been re-calculated at $US0.66 rather than the earlier DoF estimate of $US0.63. The re-costing also takes account of equipment slippages. This item also includes insurance. Wang Cable: The original estimates for Wang equipment included standard lengths of cable. However this has not proven sufficient in every case, and additional cable is required to complete some installations. (Question No. 66) Mr Hunt asked the Minister for Employment, Education and Training, upon notice, on 15 September 1987: (1) Which schools in each State are classified as disadvantaged. (2) What is the criteria for classification as disadvantaged. (3) Which schools have an Aboriginal enrolment of more than 5 per cent but are not classified as disadvantaged, and what is the percentage enrolment of Aboriginals at each of these schools. (4) Why is Collarenebri Central School not classified as disadvantaged. Mr Dawkins —The answer to the honourable member's question is as follows: (1) Lists of declared government and non-government schools participating in the program in each state and sector have been forwarded to the honourable member.* (2) The target population for the program is identified by an index of disadvantage, compiled from national census data, which identifies areas of concentrations of people of low socio-economic status. Schools are declared on the basis of the socio-economic status of the communities from which they draw their students. (3) Information on the percentage of Aboriginal students enrolled at declared disadvantaged schools is not included in information provided to the Commonwealth concerning declared disadvantaged schools. (4) State Ministers for Education are responsible for determining which government schools will be declared eligible for participation in the program, in accordance with Commonwealth Guidelines and on the basis of available information relevant to the relative socio-economic circumstances of school communities. Questions about the declaration of particular schools in New South Wales should be addressed to the New South Wales Minister for Education, the Hon. R. Cavalier. * The lists provided to the honourable member are too lengthy to be published in Hansard. A copy of the lists is filed in the Table Office of the House of Representatives where it may be read or a copy of it obtained. (Question No. 74) Mr Milton asked the Minister for Foreign Affairs and Trade, upon notice, on 16 September 1987: (1) What regulations exist to prevent overseas companies from reselling or diverting chemicals supplied by Australian exporters which have been identified as important ingredients for the manufacture of certain chemical weapons? (2) How is the monitoring of these regulations carried out once the chemicals have left Australia? (3) Is the Minister able to say whether any Australian or overseas companies have violated these regulations; if so, which companies have breached the regulations and what actions were taken against them? (4) What overseas companies are currently supplied with these chemicals and in which countries are they located? (5) Is he able to say which companies in Australia supply these chemicals and where are they located? Mr Hayden —The answer to the honourable member's question is as follows: (1) The export of thirty chemical weapons precursors is regulated under the Customs (Prohibited Exports) Regulations, regulation 13d and schedule 15, as amended on 29 May 1987. This regulation provides that the Minister for Foreign Affairs and Trade or his delegate may issue permits, subject where necessary to conditions, for the export of prescribed chemicals. Such permits would not be issued in cases where the Government had reason to believe that the chemicals were likely to be used to make chemical weapons. Similarly regulations exist in many overseas countries, although the detailed provisions and specific chemicals covered vary. (2) There is no system for monitoring the chemicals once they have left Australia. The Government maintains a dialogue with a wide range of countries on chemical weapons issues, and convenes a consultative group of nineteen industrialised nations to harmonise chemical weapons precursor export controls. Such consultations provide an opportunity for the Government to be alerted to unauthorised diversions of Australian-supplied chemicals for chemical weapons manufacture. (3) The Government has no evidence of any violation of regulation 13d of the Customs (Prohibited Exports) Regulations, or of diversion of Australian made chemicals from normal civilian use to the manufacture of chemical weapons. (4) and (5) The Government is not able to provide details of the identity of permit applicants and their trading partners, in view of the commercial confidentiality under which this information is supplied. (Question No. 112) Mr Hollis asked the Minister for Foreign Affairs and Trade, upon notice, on 21 September 1987: (1) Did Australia attend a UN conference which, on 21 March 1986, adopted the Vienna Convention on the Law of Treaties between states and International Organisations or between International Organisations. (2) Was Australia among the 127 states which voted in the UN General Assembly on 3 December 1986 in favour of a resolution expressing the hope that states would consider taking the steps necessary to become parties to the Convention at an early date. (3) Was the Convention open for signature until 30 June 1987. (4) Did Australia sign the Convention. Mr Hayden —The answer to the honourable member's question is as follows: (1) Yes. (2) Yes. (3) Yes. According to notifications received from the UN, it was signed by that date by 27 States and 10 international organisations. The Convention is no longer open for signature. States and international organisations may now become parties to it by means of accession. (4) No. However the question of possible Australian accession is now being considered. (Question No. 114) Mr Hollis asked the Minister for Foreign Affairs and Trade, upon notice, on 22 September 1987: Which States and Territories (a) have become parties to and (b) are eligible to become parties to the (i) South Pacific Nuclear Free Zone Treaty and (ii) South Pacific Regional Environmental Program Treaty. Mr Hayden —The answers to the honourable member's question is as follows: (i) (a) Eleven South Pacific countries have so far signed the South Pacific Nuclear Free Zone Treaty (Treaty of Rarotonga): Australia, Cook Islands, Fiji, Kiribati, Nauru, New Zealand, Niue, Papua New Guinea, Solomon Islands, Tuvalu and Western Samoa All of these, except Papua New Guinea and Solomon Islands, have already ratified and are now parties to the Treaty. There are also three Protocols to the Treaty which are open for signature and ratification by the nuclear weapon States. Protocol 1 is open for signature by France, the United Kingdom and the United States. Protocols 2 and 3 are open for signature by France, the United Kingdom, the United States, China and the Soviet Union. To date China and the Soviet Union have signed but not ratified Protocols 2 and 3. (b) Any member of the South Pacific Forum is eligible to become a party to the South Pacific Nuclear Free Zone Treaty. Present membership of the Forum includes those eleven members listed above which have signed the Treaty and Tonga, Vanuatu, Marshall Islands and the Federated States of Micronesia. (ii) (a) Eleven South Pacific countries have so far signed the South Pacific Regional Environmental Program Treaty (SPREP Convention) and its Protocols: Cook Islands, Federated States of Micronesia, France, Marshall Islands, Nauru, New Zealand, Palau, Tuvalu, United Kingdom, United States and Western Samoa. Of these, Cook Islands and Marshall Islands have already ratified the Convention and its Protocols and are now parties to the Convention and its Protocols. (b) In addition to those who have signed, countries eligible to become parties to the Convention and its Protocols include: Australia, Fiji, Kiribati, Niue, Papua New Guinea, Solomon Islands, Tonga, Vanuatu and any other country subject to the prior approval of three-fourths of the parties to the Convention or Protocols concerned. (Question No. 117) Mr Hollis asked the Minister for Employment, Education and Training, upon notice, on 21 September 1987: (1) How many overseas students are undertaking tertiary courses in Australia. (2) What are the principal countries from which they come and how many come from each of those countries. (3) How many students from Malaysia are of (a) Chinese and (b) Malay ethnic origin. Mr Dawkins —The answer to the honourable member's question is as follows: (1) At 30.6.87 there were 14,444 overseas students undertaking tertiary courses in Australia under the Private Overseas Students quota-controlled program. In addition, there were 622 undertaking tertiary courses at full fee institutions, and 1,585 tertiary students fully-sponsored by AIDAB. (2)The principal countries and the numbers of private overseas students undertaking tertiary studies at 30.6.87 are as follows: Malaysia ... 8,012 Hong Kong ... 1,368 Indonesia ... 1,128 Fiji ... 763 People's Republic of China ... 611 Singapore ... 590 United Kingdom ... 184 India ... 177 Thailand ... 159 Japan ... 148 Sri Lanka ... 132 Korea ... 125 United States of America ... 115 Canada ... 83 Tonga ... 65 Papua New Guinea ... 62 Federal Republic of Germany ... 60 Total ... 13,782 This represents 95 per cent of the total number of students in this program. (3) Records are not maintained on ethnic origins of students. (Question No. 142) Mr Simmons asked the Minister for Veterans' Affairs, upon notice, on 24 September 1987: (1) Are letters from the Minister's Department forwarded to individuals and corporations marked `postage paid', without date stamping; if so, are there significant revenue savings from these measures. (2) If letters are not date stamped, will the Minister ensure all letters are appropriately date stamped. Mr Humphreys —The answer to the honourable member's questions is as follows: (1) A large proportion of mail from my Department is marked `postage paid', without date stamping the envelope. There are some revenue savings on large mailing exercises and some savings of staff time. (2) The date stamping of envelopes is the prerogative of Australia Post. (Question No. 126) Mr Tickner asked the Minister for Community Services and Health, upon notice, on 23 September 1987: Did the Australian Health Ministers publicly criticise the inadequacy of the controls on tobacco advertising on 14 April 1987; if so, is he able to say what changes have been made to the application of those controls since then and what action has been taken by the Ministers to bring about the change. Dr Blewett —The answer to the honourable member's question is as follows: On 14 April 1987, Australian Health Ministers issued a communique which declared that the current application of controls on tobacco advertising were unsatisfactory and inadequate. On 29 April 1987, the Chairman of the Australian Health Ministers' Conference and the Ministerial Council on Drug Strategy-the Hon. Ian Taylor-wrote to the Media Council of Australia advising of the Ministers' concerns about the codes on cigarette and alcohol advertising and seeking public health representation on the governing bodies of these codes. He noted that the Minister's concerns were reinforced by the Trade Practices Tribunal decision in March which found that the self regulatory system and the voluntary codes needed review. He also requested a meeting between the Council and a Working Party of Health Ministers comprising the Ministers for Health for Western Australia, New South Wales and Victoria. The meeting took place on 7 August 1987. The Working Party presented very firmly to the Media Council the view that there must be a dramatic change in the approach taken to tobacco and alcohol advertising-particularly where directed to the young. The Media Council was informed that the present system was thoroughly unsatisfactory, and that the Council had a clear responsibility to institute a new code and a new structure for the governing bodies of the code. The Council was also informed that if it did not produce a satisfactory structure, which could guarantee clear codes and effective implementation, other possible options would have to be considered. The Media Council presented Ministers, on a confidential basis, with some draft proposals for change to the codes and the self regulation system which it intended to submit to the Trade Practices Tribunal. The next hearing of the Trade Practices Tribunal on this matter is set down for 3/4 November 1987 and the Ministerial Council on Drug Strategy will be examining the decision of the Tribunal before taking further action. However, it is worth noting that the delegation of Health Ministers which met with the Media Council publicly stated that they are prepared to look at other options for regulation if the voluntary codes and the self regulation system cannot be improved. (Question No. 259) Mr Burr asked the Minister for Community Services and Health, upon notice, on 20 October 1987: Is it a fact that equipment intended to be used for the transfer of information associated with proposed identification card records is stored at the Deakin Telephone Exchange, Australian Capital Territory; if so, who authorised the purchase and what was the cost of the equipment. Dr Blewett —The answer to the honourable member's question is as follows: No.