Tuesday, 17 November 1987 Madam SPEAKER (Hon. Joan Child) took the chair at 2 p.m., and read prayers. Mr HAWKE(Wills-Prime Minister) —I inform the House that the Minister for Defence, Mr Beazley, left on 14 November on government business overseas. He will return to Australia on 24 November and in his absence the Minister for Defence Science and Personnel, Mrs Kelly, is acting as Minister for Defence. I also advise the House that the Minister for Primary Industries and Energy, Mr Kerin, is overseas on official duty. He will return on 21 November, and the Minister for Resources, Mr Peter Morris, is the Acting Minister during Mr Kerin's absence. As a courtesy, I inform the House that the Minister for Foreign Affairs and Trade, Mr Hayden, will be absent from Question Time today for official reasons. Any questions normally addressed to Mr Hayden should be directed to the Minister for Trade Negotiations, Mr Duffy. Mr SINCLAIR —Can the Treasurer explain to the House the economic rationale behind the $40m cave-in to the New South Wales coal industry? Has the Government received any agreement on structural changes to the New South Wales State Rail Authority? Has the Government received any guarantees of rationalisation in the coal industry? Has the Government received any agreement on work practices in an industry where average weekly earnings for coal miners are $870? Or does he see the Commonwealth's share merely as his pre-election contribution to match the financial ineptitude of the Unsworth Administration? Mr KEATING —If the right honourable gentleman was making implications about the pork barrel, something which he in government raised to an art form, I should have thought that with his record he would just slink away in shame and say nothing. Maybe he knows no shame. Let me make some points about the question. The first is that there have been-and we are now witnessing them being undertaken-substantial reform and adjustment packages within some coal mines and with their employees. These are being undertaken to maintain their competitiveness and to try to deal with the fact that they have suffered in terms of the international market-place. There have been requests from the State of New South Wales and from other parts of the industry for subsidies to the coal industry-not on any tied basis but on a basis left to the discretion of the Government or the industry. The Commonwealth Government rejected that approach and said that, if there were to be any support for mines seeking conscientiously to adjust themselves, and where there has been a willingness for adjustment within their work force and managements, the Commonwealth could see its way clear to improving the rail carriage freight system so that over time there would be a permanent structural improvement to the efficiency of the New South Wales coal industry which would not come about through a subsidy given at one time and taken back a year or two later. In other words, where a subsidy was indiscriminate and temporary, this would be discriminate and would promote a permanent structural improvement to the efficiency of the rail system and coal handling at rail sides throughout New South Wales for the mines at risk or mines which are in the process of undertaking sensible policies of adjustment. An element of the question was: Has the New South Wales Government given undertakings that these adjustments will take place? The answer is yes. As to whether the payments by the Commonwealth are contingent upon these adjustments taking place, the answer is yes, and New South Wales will honour both the spirit and the text of the agreement between both governments to support these important adjustments in the New South Wales coal industry. The other thing which Premier Unsworth understands is not just the need for maintenance of the industry, but also the important contribution of New South Wales coal to the balance of payments. The balance of payments is sensitive to movements in these large commodities, such as coal, and hence the state of the New South Wales coal industry is a matter of concern to the Commonwealth Government. It is a matter of concern to us that these mines are facing competition from other parts of the world at prices which threaten their viability. But we are saying that we will not just give a subsidy which in a year or so will be finished, meaning the industry is finished. Rather, we would prefer to provide support for a structural change within the industry which improves the rail carriage efficiency of the industry, and that will happen as a result of this. I do not think that has been well understood. Compared to some of the claims from other parts of the industry, for dollops of money to be spread around like confetti to no particular point other than simply to tide a company over for a few months or a year, the change which the Government has agreed with the State of New South Wales is eminently sensible and will lead to an underlying structural long term efficiency for the rail coal delivery system. Ms JAKOBSEN —My question is addressed to the Minister for Social Security. Is the Minister aware of a column in yesterday's Australian Financial Review claiming that much of the welfare dollar is going to middle-class Australians? Can the Minister inform the House on how the Social Security Review has focused on the distribution of income support for families? Mr HOWE —I did notice the article written by David Clark in yesterday's Australian Financial Review. I noticed in the article some criticism of a number of people, including criticism of Professor Cass, who is directing the Social Security Review. I think it is worth reminding honourable members that Dr Cass has produced a series of papers as part of the Social Security Review, the first of which dealt with the question of income support for families. Unlike some assertions that came from the Opposition, and indeed from some sections of the Press, that the Government's family package was invented for electoral purposes, in fact in that paper on income support for families Dr Cass had recommended in October last year that in terms of short term policy the Government ought to direct assistance to those families most in need. Indeed, the recommendations outlined in terms of short term reform were adopted by the Government almost in their entirety. So unlike the suggestion of David Clark that people such as Dr Cass are interested in middle-class welfare, the reality is that her report, adopted by the Government, recommended very substantial reform in the area of assistance to low income families. It is suggested frequently by members of the Opposition that somehow this Government invented poverty and that somehow during the period we have been in government there has been a substantial increase in poverty. Of course the reality is that, in 1976, 370,000 children belonged to pensioner and beneficiary families. When we were returned to office in 1983, 830,000 children were children of pensioner and beneficiary families. Growth in the numbers is one thing and it is significant that we should have growth to the point where one in every five children in Australia-that was the Howard legacy-are of pensioner and beneficiary families. When we came to office the payment per child for pensioner beneficiary families was at a level of $10. To the credit of this Government in every single Budget-I am not talking about the family package-we have increased child payments which contrasts with the 30 per cent real decline in the value of child payments for social security beneficiaries. If one includes the family package, payments for pensioner and beneficiary families will be 120 per cent higher than equivalent payments were in March 1983 for younger children and for older children payments will be 180 per cent higher. I ask the House to reflect for a moment on the Opposition policies. When oppositions are not elected people sometimes forget what their commitments were to Australian families. Let me begin the reality. This kind of line was again endorsed by John Elliott yesterday. He espoused the kinds of policy whereby cuts in crucial programs in the areas of health, schools, training and income security programs would be something like $27 a week which should be cut off the value of payments made to the average family. In terms of the so-called family package that was announced by the Liberal Opposition in the election campaign-- Mr Spender —Madam Speaker, I raise a point of order. The question which was asked of the Minister went to the Government's own policy; it did not go to the Opposition's policy. What the Minister is now saying is perfectly irrelevant and he should be directed to be relevant. Madam SPEAKER —I call the Minister in conclusion. Mr HOWE —I agree that there is a certain irrelevance about the Opposition but I remind the House, in conclusion, that the commitment that was made was one that offered $15 a week, not per child, not to single income families, but to families right up the income range. So wealthy single income families would be eligible for that payment. A lesser payment would be made to families with a second income earner. As part of that policy they were wiping out eligibility for the supporting parent benefit for families with children over 10 years of age. Mr Spender —Madam Speaker, I raise a point of order. Could you ask the Minister-- Madam SPEAKER —The Chair is monitoring the Minister. Mr Spender —Thank you very much, Madam Speaker. I again raise the same point of order which has not been ruled upon, and that is what the Minister is saying is perfectly irrelevant to the question that he was asked. Madam SPEAKER —The Minister is answering the question and he is bringing his answer to a conclusion. Mr HOWE —Madam Speaker, I was simply contrasting the fact that there has been a 180 per cent increase in payments to families and in terms of assistance for very low income families, a very expensive family policy has been offered by the Opposition and it offers nothing-not a cent-to the lowest income families, all families, particularly sole parents with children. Mr N.A. Brown —My question is directed to the Minister for the Arts, Sport, the Environment, Tourism and Territories. By way of background, the Minister will recall that on four separate occasions earlier this year he gave assurances to this House that no contract had ever been made with an American company owned by Mr Bob Rogers to provide the theatre in the Australian pavilion at World Expo 88. With that background, I ask the Minister: First, has Mr Rogers insisted that he did make a contract with the Government and has he made a claim on the Government for a quarter of a million dollars for breaching it? Secondly, has the Attorney-General's Department given an opinion that it is obvious that a contract was made? Thirdly, does the opinion also say that the contract was made because the Minister was present when it was made and that the Minister made the contract himself? Finally, has the Government now been told that it has to pay up and has it, in fact, committed itself to paying $250,000 for breach of a contract which the Minister assured this House was never made? Mr JOHN BROWN —I am very happy to answer this question. If the honourable member for Menzies bothered to check Hansard I think he would find that I said that a contract has never been signed, and it never has been signed. Even someone of the limited mental capacity of the honourable member for Menzies-- Mr Tuckey —On a point of order, Madam Speaker: this Minister constantly makes that sort of personal attack. He is an employer of crooks and bankrupts, and he should get back to the subject. Madam SPEAKER —Order! The honourable member for O'Connor will resume his seat. Mr Tuckey —He should be controlled. Madam SPEAKER —Order! The honourable member for O'Connor will not threaten the Chair. Mr Ruddock —On a point of order, Madam Speaker: I ask whether the words used by the Minister were unparliamentary in that they reflected on a member of this House. Madam SPEAKER —Honourable members must be thin skinned if they think the comments made by the Minister were unparliamentary or offensive. Mr JOHN BROWN —Negotiations with Australian companies had gone on for a long time in an effort to find one that was capable of staging the type of theatrical performance the Government thought was up to scratch for the Australian pavilion in Brisbane. After a long period of protracted negotiations with Australian companies, the committee which I had appointed decided that none of them came up to scratch. None of them complied with the tender brief and a decision was made to give a contract to Bob Rogers. But no contract was ever officially entered into in terms of signing a contract because, as the honourable member for Menzies would quite obviously know, the process of determining that a contract should be let and then the final consummation of signing the contract is fairly lengthy. Before a verbal agreement was made between the committee and Bob Rogers about that contract, other facts came to light. Mr Howard —You were there! Mr JOHN BROWN —I have never denied being there. One thing I have never done in this House is to tell an untruth-something which I am sure not all honourable members opposite could come up to-nor have I done so in any other forum. Bob Rogers has applied to the Government for recompense of the expenses incurred by his company after the time a verbal agreement was made between him and my committee to have a contract. Mr N.A. Brown —No, it was with you. Mr JOHN BROWN —With me, if the honourable member likes. I was there; I have never denied that. This has all been clearly amplified both in this House and in the Cabinet. It is quite obvious, in my view, that Bob Rogers is entitled to the expenses he incurred between that period and the time a decision was made not to consummate the contract. That is no secret; it is no myth; there is no great drama. I have nothing to hide and nothing to fear. If the honourable member can provide anything more substantial than those stupid imputations and implications in his question, I would like to hear them. Mr Spender —And you are completely rattled. Madam SPEAKER —Order! The honourable member for North Sydney, who consistently takes points of order, should also remember that interjections are disorderly. Mr Spender —All interjections, Madam Speaker? Mr Howard —All of them? Madam SPEAKER —The Chair is fairly flexible about interjections but when they continue, as they are from the Leader of the Opposition and the honourable member for North Sydney, I suggest that they cease. Mr MOUNTFORD —I direct my question to the Minister for the Arts, Sport, the Environment, Tourism and Territories. Is the Minister aware of adverse publicity by the Opposition concerning his recent overseas visit? Can he advise the House of the success or otherwise of his official overseas visit? Mr JOHN BROWN —I am aware of the petty and fairly cowardly comments made by Senator Puplick from New South Wales after I left this country. I am quite happy to answer any criticism-- Mr Spender —I raise a point of order, Madam Speaker. Senator Puplick is a member of the other House. What has been said about him is unparliamentary-- Madam SPEAKER —The honourable member does not have a point of order. The Minister was not impugning or casting aspersions-- Mr Sinclair —Madam Speaker, I raise a point of order. Are you suggesting that accusing a member of the other place of being cowardly is in no way-- Madam SPEAKER —Perhaps the word `cowardly' could be withdrawn. The other comment made by the Minister was all right. Mr JOHN BROWN —I withdraw, Madam Speaker. The comments of Senator Puplick not only were mischievous and ill-informed but also were made in my absence. He had my itinerary for at least a fortnight before I left, which leads me to think that it was not the most courageous act I have ever seen. My visit to Egypt was the result of two streams of thought. First, the Prime Minister, on his visit to Egypt in February 1987, made an undertaking to the Egyptian Government that a Minister would make a goodwill visit. I happened to make that visit. My colleague the Minister for Science and Small Business visited Egypt a few days beforehand. The second reason for my going to Egypt was to comply with requests that have been repeatedly made to this Government and to me personally by the Government of Egypt for the last two years. All Australians should be fairly flattered by the reasons. Egypt has existed on tourism for the last 200 years. It has been one of the leaders in tourism, and well it should be. How flattering to find that the new boys to tourism in Australia are officially requested to go to Egypt, by the tourism Minister and by the Prime Minister of Egypt, to advise them on tourist promotion. No other country in the world can anywhere approach the success that Australia is having in attracting overseas visits. I was very flattered to find that the Egyptian Government sought my official advice and information as to how it could improve its tourism performance. Every member of this House should be happy that that is the case. I assure honourable members that the Egyptian Government was not at all overwhelmed by the comments of Senator Puplick, this foppish dilettante who is floating around the Senate, making accusations about my bludging off a Third World country. I can assure the House that Egypt, one of our better trading partners and a great ally, was not at all impressed at being described as a Third World country. In any case, the mission was highly successful. I then visited Britain for two days. I had long discussions with the Minister responsible for sport and the control of drugs in sport where Australia is recognised as the leader in the world for our action to keep drugs out of sport. On the subject of violence in sport, we are also acknowledged as one of the leaders. It is acknowledged that we are leading the world in combating violence in sport. I also led a trade mission to Japan. It is interesting to go to Japan as a Minister of this Government, to find the respect in which Australia, under this Prime Minister and this Government, is held. I was accompanied by 20 of the high fliers of the tourism industry, leaders in finance, in real estate, in developing, in hotels-the who's who of tourism in Australia who would not bother to speak to those opposite. They were impressed to find that doors were opened to them in Japan because of the prestige with which this Government is held. Does the Opposition think that its shadow Minister or its Leader could take a mission to Japan and meet the President of the Bank of Tokyo Ltd, the President of the Industrial Bank of Japan, the President of Nomura Securities Co. Ltd, the biggest securities house in the world, the President of Mitsui Bank Ltd, et cetera? Opposition members would be flat out getting a door open at a girlie club in Roppongi. But all these doors were open to the people whom I took on this mission and they were utterly impressed. This was an innovative mission-the first trade mission of its kind to leave this country under the aegis of a Minister. Every member of that mission paid his own fare-about $25,000-and at least three of them told me in the plane coming home that they would have been happy to have paid $100,000 to obtain the advantages that they received from being part of a mission that was led by a Minister in this Government and to have the advantage of open and very frank negotiations with the leaders of the Japanese financial community. One of the members of the mission has a deal ready to be signed with a Japanese developer for a $250m infusion into his resort at Coffs Harbour. That will be the biggest tourist resort in New South Wales-the biggest development ever envisaged-simply because we were able to impress the Japanese Government with the great co-operation between our tourist industry and government. It strikes me as being very strange that those characters on the Opposition benches, having no record of achievement in any area, can sit there and make snide remarks about a tourism investment mission which has had extraordinary results. For the information of honourable members, I wish to table a letter I received-- Mr Sinclair —You normally write them, not table them. Mr JOHN BROWN —I did not write it. I did not sign it either, and neither did my dad. It is signed by Mr John Haddad, the leader of the mission from the private sector point of view. The letter says: At our post-mission meeting this morning, I conveyed to you on behalf of all members their endorsement of the success of this Investment Mission to Japan under your leadership. I was further requested by the mission members themselves to acknowledge their appreciation formally and I do so now. Apart from the excellent response of all sections of the invitees from Japan, the goodwill and continuing future benefits engendered by the mission was clearly evident. The members were also impressed by your involvement in all aspects of their activities, and your availability at all times to support individual members' needs throughout the period the mission was in Japan. I know that the mission has created a new level of sophisticated negotiation within the market place in Japan and will be of enormous benefit to the future of our greatly expanding tourist industry. Yours sincerely, John Haddad. In the period that I was in Japan-- Opposition members-Oh, come on! Sit down. Mr JOHN BROWN —No, I will not sit down; you can sit there and listen. I was given the figures for tourism arrivals in Australia from Japan for the month of September 1987, and the increase over September 1986 was a `mere' 77 per cent. Where were Opposition members before 1983 when we had 70,000 Japanese visitors in Australia? Next year we will very likely have half a million because of the efforts that this Government has made in an area which we understand and on which we have a great co-operative basis with the industry. Opposition members can criticise all they like. I am quite happy to be part of the tourism industry and to be given government leadership to an industry which has created enormous wealth for Australia. Members of the Opposition can sit and carp all they like-they are negative, hopeless, without policy, leaderless and will be in opposition forever. Finally, I happened to take out today the record of the number of days I have spent overseas in the five years in which I have been a Minister. It amounts to 128 days, which is a nice round figure of 7 per cent. In other words, for all the innumerate cretins on any form of mathematics, I have spent 93 per cent of my time at home. This rather puts to bed this theory that the Opposition pursues and that some elements of the Press write up, that I am the modern Marco Polo-always out of this country. My spending rate is at the very low level per day of Ministers in this Government-a government which is absolutely responsible in overseas expenditure. Every day must be accounted to the Prime Minister. Every expense is open to scrutiny because of our allegiance to freedom of information. This is in absolute contrast with the excesses of the Opposition characters when in government. The trips that they took are legendary, as is the lack of success they got from any of these trips. I am very happy to report back to the House that the trip I undertook, as with all trips I have undertaken, has brought back the bacon. I table the letter from Mr Haddad. Mr N.A. Brown —My question is directed to the Minister for the Arts, Sport, the Environment, Tourism and Territories. By way of background I say to the Minister, with respect, that if he looks at the Hansard reports of what he said on this matter he will see that he at no stage said simply that no contract was signed but rather that there never had been any contract or agreement formulated with Mr Rogers's company. In the light of that, I ask the Minister: What authority did he have to negotiate on behalf of the Government to commit itself of Mr Rogers's company in the way in which the Attorney-General's Department has said that it did? Secondly, can he answer the simple question as to whether it is true that the Government has either committed itself to pay a quarter of a million dollars, or has actually paid a quarter of a million dollars, to Mr Rogers's company-yes or no? Is the basis for that payment or commitment the fact that he himself committed the Government and the Australian taxpayers to Mr Rogers's company? Mr Tuckey —Just answer the question. Mr JOHN BROWN —Madam Speaker, do I need advice from the goose? Madam SPEAKER —Order! No. Honourable members on my left-- Mr Tuckey —But-- Madam SPEAKER —I warn the honourable member for O'Connor. Mr JOHN BROWN —Madam Speaker, if this is the best scandal those opposite can dig up, they have a long way to go. Mr Aldred —I rise on a point of order, Madam Speaker. As we are speaking of scandals, would the Minister mind telling us what he will do if Federal Hotels misses out on Christmas Island? Madam SPEAKER —Order! The honourable member is abusing the forms of the House. Mr JOHN BROWN —I do not know whether the Attorney-General has yet made the decision as to whether the compensation is payable or whether the compensation has been paid. It is in the area of the Attorney-General. The request from Bob Rogers was for expenses incurred from the time he was given the nod, a verbal nod, by the committee that was empowered to appoint the contract. Opposition members interjecting- Mr JOHN BROWN —I am glad those opposite find it all so amusing. Madam SPEAKER —Order! The Minister will wait for a moment. The Chair has been pretty lenient. I am now asking the House to come to order and to observe the Standing Orders of the House. Mr Howard —It is only taxpayers' money. Mr JOHN BROWN —Taxpayers' money? How much did the honourable member's staff spend on travel? I think it was $74,000-- Madam SPEAKER —Order! The Minister will continue answering the question. Mr JOHN BROWN —For what good use? This subject has been the matter of a full report to the Prime Minister and the Cabinet by me. I have nothing to hide, nothing to fear. If Opposition members have any specific charges to make, let them make such changes. Mr HOLLIS —My question is directed to the Minister for Social Security. Is the Minister aware of community concern about the operations of the Department of Social Security computer centre at Deakin in the Australian Capital Territory? Has the Minister identified the source of these concerns? Mr HOWE —I am aware of a newsletter which details what might be described as a rather bizarre set of claims. It amounts to a conspiracy theory of somewhat heroic dimensions. The claims are nonsense, and I am concerned that members of the public have been misled by mischievous speculation. The Department of Social Security's national computer centre at Deakin is not used for any surreptitious purpose, and certainly not for any national ID system. Its main function is to support the Government's income security programs. It also provides a bureau service to the Department of Community Services and Health for the time being. I would like to invite the honourable member for Throsby, and indeed any member of the House, to visit the national computer centre if they are concerned to pursue some of these highly mischievous and misleading claims. I also draw the attention of honourable members, if they are interested in further details, to a detailed answer that I gave on notice on 2 November 1987 in reply to question No. 226. Mr HOWARD —I refer the Prime Minister to the answer just given by the Minister for the Arts, Sport, the Environment, Tourism and Territories in which he said that a full report of the Rogers matter had been made to the Prime Minister. I ask the Prime Minister whether that is a fact. I also ask the Prime Minister: How does he reconcile the answer given by the Minister a few moments ago with his statement in the Parliament on 20 February 1987 when he said, `There is no contract. No contract has been drawn up.'? I also ask the Prime Minister: Has the Attorney-General's Department given an opinion that it is obvious that a contract was made? Does the opinion also say that the contract was made because the Minister was present when it was made and that the Minister made the contract himself? Will the Prime Minister tell the House whether the Government is now committed to paying $250,000 for breach of a contract which his Minister assured this House was never made. Mr HAWKE —As the Minister said, a report was made by him to me and to the Cabinet. I recall that that report was made. It has been made quite clear in this House today in what the Minister has said that no contract has been entered into. As to the status of the current position in the judgment of the Attorney- General's Department, I do not know but I will find out. Mr LINDSAY —I ask the Minister for Community Services and Health to inform the House as to what action Australia is taking to share with its Pacific and South East Asian neighbours the expertise it has developed in preventing the spread of the disease acquired immune deficiency syndrome (AIDS). Dr BLEWETT —I recognise the long-held interest of the honourable member in the Pacific region. As he is probably aware, in July Australia hosted, with the World Health Organisation, an inter-regional ministerial conference on AIDS, comprising Ministers from Asia and the Pacific region to encourage co-operation in combating the virus at the regional level. During that conference a number of the Pacific island countries made requests to the World Health Organisation for assistance. In response to that, and in what the World Health Organisation described today as `a unique effort aimed at meeting the diverse public health needs in South East Asia and the Western Pacific', the World Health Organisation and the Commonwealth Government are sponsoring a training seminar in Sydney, beginning tomorrow, to expand the team of experts for the global fight against AIDS. This will be a three-day session held at the World Health Organisation inter-regional teacher training centre for health personnel at the University of New South Wales in Sydney. It involves Professor Cox of that institution and Dr Daniel Tarantola, Chief of the national program support unit of the World Health Organisation special AIDS program in Geneva. The object of this training session is to prepare consultants to co-operate with Pacific island governments in the formulation of national AIDS programs for AIDS prevention and control. As a result we will be building up, with the World Health Organisation, a group of resource people who can be used internationally in the special programs being run by the World Health Organisation throughout the world. Some 40 people will be trained in these sessions, half of them coming from Australia and the rest from New Zealand and the Asian countries. The intention is to train these people so that they can then go out as consulting teams to the Pacific island countries to advise them on the development of their own programs. On completion, eight countries will be visited: Papua New Guinea, the Solomon Islands, Western Samoa, the Marshall Islands, Vanuatu, Tonga, Kiribati and the Cook Islands. These teams of consultants will meet with government and health workers in those states to assess the local situation in terms of the available resources such as health work forces, testing laboratories, health system facilities and the educational programs that will be needed in these regions. The teams will then come back to Australia, and in December there will be a meeting with the heads of the AIDS programs from these eight countries. Together, the teams and the heads of the programs will assess what is necessary to identify and develop particular country and regional strategies. The result will be that by the end of this year we should have together a two-year program for tackling the problem of AIDS in this region. As yet in Oceania there have been very few cases-apart from in Australia and New Zealand-and this gives us an excellent opportunity to work with the countries of the region to combat the disease from the outset. I congratulate all those who are taking part in this program. Mr HOWARD —I direct a question to the Attorney-General. Has his Department given an opinion in the Rogers World Expo 88 matter to the effect that a contract was made between Mr Rogers's company and the Government? Does that opinion say that the contract was made because the Minister for the Arts, Sport, the Environment, Tourism and Territories was present when it was made and that the Minister made the contract himself? Finally, does the Attorney-General support the claim of the Prime Minister given in answer to my question that `it is obvious that no contract was made'? If so, can he explain the discrepancy between that and the opinion of his Department? Mr LIONEL BOWEN —The matter has not been brought to my notice. In view of what has happened in Question Time today, I have asked for a report to be given to me following Question Time. I will let the Prime Minister know. Mr ROBERT BROWN —Has the Treasurer seen Press reports of statements made by the national President of the Liberal Party of Australian, Mr Elliott, calling for a Budget surplus of $3 billion? What attitude will the Government adopt towards such a policy prescription, and what would be the implications of such an approach? Mr KEATING —I notice a Press release from the Federal President of the Liberal Party, Mr Elliott, urging a further reduction of $3 billion in government expenditure to produce a $3 billion Budget surplus. What makes this remark somewhat amusing is that it came from the leader of the party that gave us a $10 billion Budget deficit and now wants to see it become a $3 billion surplus. What is even more interesting about the remark is that in the election campaign just four months ago the Liberal Party campaigned on a $250m reduction of the then known deficit, which was then $3.5 billion in prospect coming to a Budget deficit of $3.25 billion. Now we have the Federal President of the Liberal Party saying four months later that there ought to be a $3 billion Budget surplus. Which policy prevails? Is is the tax cut policy, whose proponents are satisfied and smug about the modest $250m reduction in the deficit, or is it the Elliott policy, which seems to comprehend more about the true exigencies of the economy by urging a further tightening of fiscal policy over time? Which policy is to prevail? There is an irreconcilable difference between the stated policies of the Opposition, which through the Leader of the Opposition and the shadow Treasurer has affirmed the election campaign policy, and the statement by the Federal President of the Liberal Party that he would not be content with a $3.25 billion deficit but would rather a $3 billion surplus with further cuts to public outlays. On the Government side, we would like to know who speaks for the Liberal Party and what $3 billion outlays should be cut. Do members of the Liberal Party believe that by some stroke of magic a $3 billion cut to outlays can be made and they can still abide with the promise of further reductions in tax as stated by the Leader of the Opposition on half a dozen occasions? In short, we have an irreconcilable difference between the current policy of the Opposition on adherence to its election campaign commitment of a further reduction in tax and the statement by the Federal President that there should be a $3 billion cut to outlays to produce a surplus of $3 billion. We are the people who inherited the $10 billion Budget deficit. We are the people who have taken the Budget deficit to zero and we will operate fiscal policy in this country with such rigour as needs be. But we will not be caught in an election campaign running around with the most disingenuous, irresponsible policy of offering tax cuts and a standstill deficit of $3 billion while the Federal President of the Party is saying that there ought to be a surplus of $3 billion. What is the policy of the Liberal Party? Is it the market-oriented approach? Is it the approach that takes some cognisance of the economic fundamentals which comes from the Federal President? Or is it this grab-bag policy coming from the current Opposition which did everything to try to buy votes running to the electoral wire with the money falling from its pockets like confetti? We on this side of the House know where we are going on fiscal policy. Honourable members opposite do not. What we want to know is: what status does Mr Elliott's statement have, particularly given the current policies of the Leader of the Opposition? The Leader of the Opposition said on 1 July that when he was elected as Prime Minister he would hit the ground running. All we can say at the moment is that he has just hit the ground. Mr MOORE —I refer the Prime Minister to his Ben Chifley Memorial Lecture at Bathurst on 21 September 1985. I ask whether he then posed the question: What in the name of reason is the justification for breaking up and selling off the great and efficient national assets like the Commonwealth Bank, Telecom, TAA and Qantas? Did the Prime Minister then describe any such proposals as economic and social vandalism? Did the Prime Minister also say that, to keep fresh and green the memory of the late Ben Chifley, the Labor Party would need successfully to resist the privatisation of these bodies? Can the Prime Minister please inform the House of his higher priority? Is it keeping fresh and green the memory of his predecessor Ben Chifley, or the compelling economic case for privatisation presented yesterday by his colleague and Minister, Senator Evans? Mr HAWKE —The compelling necessity for me and for this Government is to examine the economic conditions confronting the country and to examine the priorities that have to be fulfilled if we are to meet the challenges of this economy. In that sense, I have said that it is desirable that there be a debate and discussion within my Party on the issues of public ownership. I have noticed, with a considerable amount of humour, the attempts by those opposite, particularly the Leader of the Opposition in one of his frantic little doorstops this morning, to suggest that there is a great deal of turmoil within my Party on this issue. Mr Howard —Ha, ha! Mr HAWKE —We should get the giggleometer out. This poor pathetic little creature here is giggling again. We have to understand that when he is not trying to talk down the Australian economy-which he spends half his time doing-he is pursuing this eternal hope of trying to suggest that there is something like the degree of disunity in my Party that has characterised his own since he began his period of leadership. What distinguishes us on this side of the House from those on the other side on this question in discussing the issue of public ownership is that we are not driven by some ideological mania which suggests that there is something wrong with public ownership. We on this side do not have this ideological hang-up that there is something intrinsically unacceptable about public ownership, because that is simply not true. I have sought to generate a debate on this issue. Mr Howard —It was Gough last week; it is Ben this week. When are you getting to John Curtin? Madam SPEAKER —Order! The Leader of the Opposition will cease interjecting. Mr HAWKE —Madam Speaker, be generous with him; he is a poor, pathetic little figure. I am not like this fellow who will not tolerate in his own Party any suggestion of dissent from his position. What happens to the Macphees and the Peter Baumes of this world? When they suggest that he is talking ideological drivel, as he is, and suggest that there is something different, what does he do? Does he encourage debate? Of course he does not. The Peter Baumes and the Macphees, the people who have the courage and the good sense to question that nonsense that he puts before the Australian people, get banished. As distinct from the poor pathetic performance of the Leader of the Opposition, when he cannot face up to criticism in his own Party-- Mr Aldred —Madam Speaker, I raise a point of order. I draw your attention to standing order 145, which requires that an answer shall be relevant to the question. I see little relevance in the Prime Minister's answer. Madam SPEAKER —Order! The Prime Minister will continue. Mr HAWKE —As I say, as distinct from this fellow over here, who throws out the Steele Halls, the Macphees and the Peter Baumes and cannot tolerate any dissent, I encourage debate on this side of the House. I am very pleased to say that, although some of my colleagues, at least to this point, do not see exactly as I do on these issues, we will have those discussions and I will encourage the debate and the discussion. In the end I am sure that my Party and this Government, as distinct from this pathetic collection of people on the other side, will come up with the answer which is appropriate to the economic needs of this country. Mr LAMB —My question is addressed to the Minister for Social Security. I refer the Minister to the Prime Minister's announcement last Friday of the new families package. Is the Minister aware of concern expressed by some existing social security pensioners and beneficiaries that they may not be eligible for the new payment? Can the Minister inform the House of the eligibility rules for the new payments? Mr HOWE —I thank the honourable member for his question. It is true that there has been some confusion, which I would like to clarify. All people on social security payments, whether pensions or benefits, with dependent children will be eligible for the maximum payments as part of the families package; that is, $22 for children 12 and under, and $28 for children aged 13, 14 and 15. The scheme is effectively being phased in so that those children within those pensioner and beneficiary families will be eligible for the maximum payment, but initially it will not be described as a family allowance supplement (FAS). They will continue to receive additional pension or benefit, although it is the intention of the Government, as the administrative systems are developed, to eventually create the circumstance where people under the thresholds receive a payment called the family allowance supplement. That process of integration will take some time. In the meantime, children who are in pensioner and beneficiary families will effectively be receiving payments equivalent to FAS. I think it is also important to note that the Department of Social Security is now advertising the payment, and all honourable members will have received this week information kits which provide information on what is available to their constituents so that we can achieve the takeup that the Government would like to achieve in relation to family allowance supplement. Finally, a very high proportion of pensioner and beneficiary families will effectively be lifted above the poverty line by the payments as they come in in December this year. Mr HOWARD(Bennelong-Leader of the Opposition) —Madam Speaker, I ask for your indulgence. You will remember that some time ago you made a statement to the House about the character of exchanges between the two sides of the Parliament. On that occasion I think your statement won the support and the respect of both Houses of Parliament; certainly so far as this side is concerned that statement did win support. I have to say to you, Madam Speaker, that today you allowed to go completely unrebuked a remark which is constantly made by members of the Government and which is offensive to a number of people opposite-in fact, I believe, to all people opposite. The Leader of the National Party of Australia (Mr Sinclair) does not raise the matter himself but constant reference is made to his late father. This may be regarded as clever and smug by members of the Government, but I have to say to you, Madam Speaker, that voluntary compliance with a certain level of tolerable language is rendered very difficult for this side of the House if that kind of remark is constantly made. Madam Speaker, I ask you to invite the Minister who made that remark and who is allowed-- Mr Hand —It is a two-way street. Mr HOWARD —Of course it is. Madam Speaker, I simply make the point that if all bets are to be off, if we are to have a situation in which remarks of that highly offensive kind are made about the Leader of the National Party and a late member of his family, voluntary compliance with your request, which we respect, will not and cannot be expected to be forthcoming. I think the Minister should have been rebuked and invited to withdraw that remark. I hope that if a similar remark is made in future you will act in that fashion. Mr YOUNG(Port Adelaide-Leader of the House) —Madam Speaker, with your indulgence, I also wish to speak on the same subject. It is obvious that it is impossible for you to hear all of the remarks that are made in the House. It is also true that Ministers standing at the dispatch box are dealing not only with questions but also with numerous interjections, some of which are friendly, some of which are funny but some of which are quite offensive. Today some very offensive remarks were made which could be heard quite distinctly on this side of the House, although they may not have been heard by you Madam Speaker. In relation to the remark made by the Minister for the Arts, Sport, the Environment, Tourism and Territories (Mr John Brown), he was provoked by an innuendo, coming from the other side of the House, about whether he had or had not signed a particular document to which he was referring. The honourable member for O'Connor (Mr Tuckey) made some particularly rude remarks about the Minister, which obviously would have led to further action if you, Madam Speaker, had heard them. Obviously, these things will take place in the House. I suggest to honourable members opposite that they will not get any of this sort of thing if, having asked their questions, they just remain silent and listen to the answers for which they have asked. Mr JOHN BROWN(Parramatta-Minister for the Arts, Sport, the Environment, Tourism and Territories) —Madam Speaker, I withdraw and apologise. Madam SPEAKER —I thank the Minister for his withdrawal. In reply to what the Leader of the Opposition said, I made a very strong appeal for personal reflections to be taken out of this place. This appeal has not always been heeded; he must be aware of that. If he reads Hansard he will be aware that there have been some quite strong breaches of my request. The Chair has tried at all times to ask that personal reflections be withdrawn. The Chair heard the comment made by the Minister for the Arts, Sport, the Environment, Tourism and Territories but did not ask for it to be withdrawn because I thought it was far better not to. It was a very oblique reference and one which I think would have been better not made, but it was perhaps better for the Chair not to draw attention to it. I say once again that honourable members should be able to debate issues in the Parliament within the Standing Orders and without using language which reflects personally upon honourable members. However, honourable members must all be aware that they are in a political forum and if they are attacked politically it is a bit silly to call points of order. While I am on this matter, some points of order are becoming ridiculous. I intend to rule on them pretty harshly in the future. Some personal explanations also do not come within the indulgence that the Chair is prepared to extend. Mr KEATING(Blaxland-Treasurer) —Madam Speaker, with your indulgence, I listened with great interest and with a wry smile to the expression used by the Leader of the Opposition (Mr Howard), who last year employed personal denigration and abuse as an Opposition tactic promoted by him. Madam SPEAKER —Order! The House had best take note of itself and of the disorder in the House today. Question Time is on national radio. Perhaps tomorrow honourable members will look at how they behave in the House. Mr HAWKE(Wills-Prime Minister) —Pursuant to section 35 of the Inspector-General of Intelligence and Security Act 1986, I present the annual report of the Inspector-General of Intelligence and Security for 1986-87. Motion (by Mr Young) proposed: That the House take note of the paper. Debate (on motion by Mr Fife) adjourned. Mr HAWKE(Wills-Prime Minister) —Pursuant to sub-section 25 (7) of the Public Service Act 1922, I present guidelines for the preparation of departmental annual reports, approved by the Joint Committee of Public Accounts. The guidelines replace those tabled in 1982 and reflect the Government's Public Service reform measures. Motion (by Mr Young) proposed: That the House take note of the paper. Debate (on motion by Mr Fife) adjourned. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General) —Pursuant to section 67 of the Australian Federal Police Act 1979, I present the annual report of the Australian Federal Police for 1986-87. Mr DAWKINS(Fremantle-Minister for Employment, Education and Training) —For the information of the House, I present a statement on expenditure from the Advance to the Minister for Finance for October 1987. Motion (by Mr Young) proposed: That the House take note of the paper. Debate (on motion by Mr Fife) adjourned. Mr PETER MORRIS(Shortland-Minister for Resources) —Pursuant to section 14 of the River-Murray Waters Act 1983, I present the annual report and financial statements of the River Murray Commission for 1985-86, together with the Auditor-General's report. Mr BARRY JONES(Lalor-Minister for Science and Small Business) —Pursuant to sub-section 25 (8) of the Public Service Act 1922, I present the annual report of the Department of Industry, Technology and Commerce 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 Qantas Airways Ltd, together with the Auditor-General's report, for 1986-87. Mr HOWARD(Bennelong-Leader of the Opposition) —Madam Speaker, I seek leave to make a personal explanation. Madam SPEAKER —Does the honourable member claim to have been misrepresented? Mr HOWARD —Yes. Madam SPEAKER —Please proceed. Mr HOWARD —During an answer given in Question Time today, the Treasurer (Mr Keating), in describing the taxation policy on which I campaigned at the last election, repeated the inaccurate claim that the impact of that policy would have reduced the Budget deficit from last year's outcome to this year's projected figure in the event of a coalition victory to only $250m. That claim is false. Mr Young —This is a political debate; it is not a personal explanation. Why don't you put on a debate and debate it? You have plenty of room to do that. Madam SPEAKER —Order! As I pointed out a few moments ago, the indulgence of Question Time is being abused. The Leader of the Opposition is now rebutting an argument put forward by the Treasurer. Mr HOWARD —No, I am correcting a totally false statement. Madam SPEAKER —The honourable member will take other forms of the House to do so. Mr HOWARD —The statement is false, and the Treasurer knows it is false, but he keeps using it. Madam SPEAKER —The indulgence is withdrawn. Mr BURR(Lyons) —I seek your indulgence, Madam Speaker, to make a personal explanation. Madam SPEAKER —The honourable member may proceed. Mr BURR —On Sunday, 15 November, the Sunday Tasmanian published a highly inaccurate and slanderous article under the heading, `Union blames MP's wife for sackings'. The article said that the Administrative and Clerical Officers Association (ACOA) claimed my wife was responsible for two people being dismissed from my staff. The article also made a number of slanderous comments about myself and my wife. The claim by ACOA is totally wrong in fact. The two employees were dismissed because they were unsuited to continue in my employ. It has always been my practice not to publicly disclose the personal details of this matter or of any other matter. I very much regret that, because of the article in the Sunday Tasmanian, I must now break from that practice. The two employees in question are Mr Reg Robertson and Mrs Helen Rosevear. They were dismissed for entirely different reasons. Mr Robertson joined my staff in 1982. During the 1983 election he proved most helpful and co-operative. However, during the 1984 election campaign he was far from helpful and at times was quite disruptive. I managed to smooth the problems out at that time. However, during the 1987 election campaign Mr Robertson refused to co-operate in any way with my campaign committee. His actions were extremely disruptive to the efficient running of my campaign and I had the strongest suspicion that he was purposely trying to subvert my re-election prospects. Mr Robertson clashed most strongly with my wife because she chaired my campaign committee and it was her ambition to see my election campaign run as smoothly and as efficiently as possible. Immediately following the 1987 campaign, on 13 July, I discussed these matters at considerable length with Mr Robertson. At the end of that discussion it was agreed that Mr Robertson could not remain on my staff. Mr Robertson then requested that he be sacked. He explained that if he were sacked he would qualify for the dole immediately but that if he resigned he would need to wait six weeks before being eligible for the dole. By agreement, I then formally sacked him. As evidence of the mutuality of that arrangement I quote the final paragraph of a personal reference I gave to Mr Robertson dated 14 July: He leaves me by mutual understanding and I wish him well in the future. Mrs Rosevear was sacked because she blatantly and scandalously misused the trust and authority I placed in her. I quote my letter of dismissal dated 27 July, which is self-explanatory: Dear Mrs. Rosevear, Please be advised that your service in my employ is immediately terminated. The reason for your termination is the letters written by you on July 10th. I noticed in the mail book that you entered 28 letters with the notation ``Confidential'' but the names of the addressees were not recorded as is required for all mail leaving my office. On checking the files I found in the Latrobe CYSS file a copy of a letter dated July 10th, signed by yourself and attached to a list of 20 names all of whom are prominent members of the Devonport/Latrobe community. Your letter requested written comment about Mr. Gene Chugg. You claimed I intended to nominate Mr. Chugg for the New Years Honours List and that the written comments would assist the application. As you are aware such a nomination has never been discussed with me. Nor was the exercise of writing to 28 prominent citizens discussed with me. I have no idea why you sought those written comments but the reason was certainly not to support an application for an award. I was forced to write to as many of those people as I could identify to retract your letter. You acted totally without my authority and your actions can only do damage to my reputation in that part of the electorate. You have blatantly misused the trust I placed in you for purposes that I am not aware of but certainly do not relate to your duties. As your employer I find your actions totally unacceptable. You are dismissed from my employ with the minimum 14 day notice and your service is suspended during that notice period. These matters were referred to the Conciliation and Arbitration Commission by the ACOA. The matters were considered by the Commission at a hearing on 30 September and immediately dismissed by the Commission. As the claims made in the article in the Sunday Tasmanian are inaccurate and slanderous, I have briefed my solicitors to take all necessary legal action to seek redress from both the ACOA and the publishers of the Sunday Tasmanian. I very much regret having to make this statement, but I cannot allow such a scurrilous article to pass without correction. Assent to the following Bills reported: Australian Land Transport (Financial Assistance) Amendment Bill 1987 States Grants (General Revenue) Amendment Bill 1987 States (Works and Housing) Assistance Amendment Bill 1987 Occupational Superannuation Standards Bill 1987 Insurance and Superannuation Commissioner Bill 1987 Insurance and Superannuation Commissioner (Consequential Provisions) Bill 1987 Australian National Railways Commission Amendment Bill 1987 Defence Housing Authority Bill 1987 Sea Installations Bill 1987 Sea Installations Levy Bill 1987 Sea Installations (Miscellaneous Amendments) Bill 1987 Primary Industry Bank Repeal Bill 1987 Petroleum (Submerged Lands) Legislation Amendment Bill 1987 Egg Industry Research (Hen Quota) Levy Amendment Bill 1987 Taxation Laws Amendment Bill (No. 3) 1987 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 Ewen Cameron,Mr Halverson,Mr Jenkins,Mr Kent,Mr Milton and Mr Scott. To the Speaker and Members of the House of Representatives in Parliament assembled, your humble petitioners showeth: 1. The proposed Australia Card will have a dramatic impact on the lives of all Australians. 2. Therefore your petitioners request a national referendum on the Australia Card Bill before the proposal is resubmitted to Parliament. As in duty bound your petitioners will ever pray. by Mr Beale,Mr Ewen Cameron,Mr Hunt,Mr Rocher,Mr Ruddock,Mr Shipton and Mr Spender. To the Honourable the Speaker and Members of the House of Representatives in the Parliament assembled. We, the undersigned citizens, respectfully showeth: that we are totally opposed to the introduction of the Government's Identity Card; that this form of national and compulsory identification will be intrusive, costly for taxpayers and business and will not be effective in combating the growing problems of tax evasion, illegal immigrants or social security; that we call upon the government to improve management systems within the Australian Tax Office and other Departments to crack down on tax evasion and fraudulent practices. And your petitioners as in duty bound will ever pray. by Mr Ewen Cameron,Mr Dobie,Mr Tim Fischer and Mr Porter. 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 Campbell,Mr Jull,Mr Lloyd and Mr Nehl. To the Speaker and the Members of the House of Representatives in the Parliament assembled. The petition of certain citizens respectfully showeth that: The Hawke Labor Government's ID Card proposal is the most far reaching and intrusive piece of Australian legislation yet introduced, and that on all the evidence available, it will not tackle in the most cost-efficient and effective manner tax and social security fraud. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Reject Labor's ID Card proposal to prevent a gross waste of taxpayer's money and a significant infringement of civil liberties. And your petitioners as in duty bound will ever pray. by Mr Cadman,Mr Cobb and Dr Harry Edwards. To the Speaker and the Members of the House of Representatives in the Parliament assembled. The humble petition of the undersigned citizens of the Maranoa electorate respectfully showeth that: The Hawke Labor Government's ID Card proposal is the most far reaching and intrusive piece of Australian legislation ever, and that on all the evidence available, it will not tackle in the most cost-efficient and effective manner tax and social security fraud. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to reject Labor's ID Card proposal to prevent a gross waste of taxpayer's money and a significant infringement of civil liberties. And your petitioners as in duty bound will ever pray. by Mr Ian Cameron. To the Honourable the Speaker and the Members of the House of Representatives in the 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 taxpayer's 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 humble petition of the undersigned citizens of Warrego electorate respectfully showeth that: The Hawke Labor Government has no mandate to introduce its flawed and costly ID card proposal and that the card won't stop tax and welfare fraud and will invade the private lives of Australians. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Reject Labor's ID card proposal as the Australian public haven't given the Government a mandate to introduce it. And your petitioners as in duty bound will ever pray. by Mr Ian Cameron. 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 1985-1986 Senate Select Committee on Senator Harradine's Human Embryo Experimentation Bill which received 270 submissions and more than 2,000 pages of evidence. The report of the Senate Committee recommended in October 1986 that the Commonwealth Government make unlawful any destructive experiment which frustrated the development of the human embryo. Your petitioners therefore request the House of Representatives and the Government of the Commonwealth of Australia to: Implement without delay the major recommendation of the Senate Select Committee to outlaw destructive experimentations on human embryos. And your petitioners, as in duty bound, will ever pray. by Mr Ian Cameron,Mr Ian Robinson and Mr Ruddock. To the Honourable the Speaker, and Members of the House of Representatives of the Parliament of Australia assembled. We, the undersigned, being appalled that the Government has set no penalty for the possession of child pornography, and has set no penalty for importing unclassified child pornography, do ask that Parliament urgently legislate to: make the importation of child pornography, and the possession of child pornography, and all tapes and goods banned by Customs, to be a criminal offence, with deterrent penalties, and close the Customs barriers to pornography in the A.C.T., in respect of X-rated videos, (and ER) and end the shameful Canberra trade, and the Mafia Connections. Because 98% of Australians in other States have banned X rated videos. Because the trade is still flourishing, and it's availability escalates sexual crime. Because importers of child pornography face only a fine for lying. Because child pornography pedlars are safe if they cross a border, and cannot be extradited for 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 considerations, and your petitioners, as in duty bound, will ever pray. by Ms Jakobsen and Mr Rocher. To the Honourable the Speaker and Members of the House of Representatives. The petition of the undersigned respectfully showeth that the Fringe Benefits Tax is an iniquitous and unjust impost which will further damage the Australian economy and further increase costs to employers. The Tax will: (1) further increase the level of unemployment; (2) increase the administrative costs and overheads for business and Government; (3) particularly disadvantage small businesses and farmers; and (4) act as a disincentive to those who are the most productive and skilled; and we the undersigned call upon the Government to immediately repeal the Fringe Benefits Tax. And your petitioners, as in duty bound, will ever pray. by Mr Cadman. To the Honourable the Speaker and Members of the House of Representatives in the Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth that: The fringe benefits tax will cause hardship to business throughout Australia, especially in the already severely depressed rural sector and in the motor vehicle industry. The fringe benefits tax will be a disincentive to employment and worse, will result in additional unemployment. The economy of this country would best be served by policies that lightened the tax burden, not increased it, that encouraged enterprise, not stifled it and stimulated growth, development and jobs, not prevented it. Your petitioners therefore pray that the House will repeal this Legislation and your petitioners, as in duty bound, will ever pray. by Mr Rocher. 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 establish memorials to peace, the so-called Aboriginal War and anti-war activists and other left wing causes at the Australian War Memorial at Canberra would desecrate the Memorial as a fitting and solemn monument to those who served in Australia's Armed Forces and to those who died in defence of their country. Your Petitioners humbly pray the House of Representatives acts to prevent anything which would desecrate the nation's memorial to Australia's former servicemen and women and war dead. And your petitioners, as in duty bound, will ever pray. by Mr Ewen Cameron. To the Honourable the Speaker and the Honourable Members of the House of Representatives in Parliament assembled. The humble Petition of the undersigned citizens of Australia showeth that whereas: They are completely satisfied with the design of the existing Australian National Flag. Your petitioners therefore pray that your honourable House will: Give a speedy passage to the Flags Act Amendment Bill which provides that the Australian National Flag can only be changed by a Referendum. And your petitioners as in duty bound will ever pray. by Mr Ewen Cameron. 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 pension 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 Mr Ewen Cameron. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: That the proposed introduction of compulsory identification cards should be reconsidered and rejected because the proposal; Is not a cost-effective method of reducing tax evasion and social security fraud, and to the contrary, in the form proposed will facilitate such evasion and fraud, Will constitute an unwarranted infringement of individual privacy by the aggregation of a wide variety of personal information of a private matter, Will cause a further large and costly growth in the bureaucracy and burden on the tax payer, 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. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth that: 1. There is no legal barrier to the importation of X-rated videos in the A.C.T. or to their sale in the A.C.T. 2. The Government has ignored the repeated protests of the House of Representatives and the people of Canberra on this situation. 3. As a result X-rated videos are being sold from Canberra to other States, although they are banned in all States. Your petitioners therefore ask the House of Representatives to put pressure on the Government to ban the importation and sale of X-rated video material in the Australian Capital Territory. And your petitioners as in duty bound will ever pray. by Mr Cohen. To the Honourable the Speaker and Members of the House of Representatives assembled: The humble petition of the undersigned citizens of Australia respectfully showeth: That we strenuously object to the proposal that 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 purpose 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 Parliament assembled. We the undersigned citizens, respectfully showeth: 1. That we are totally opposed to the Government's discriminatory Anti-Smoking legislation in the workplace bans and on Domestic Airline travel. 2. Note that so called Environmental Tobacco smoke has not been proved as a major pollutant either in the workplace or on aircraft. 3. This legislation will discriminate against thirty per cent of the citizens of Australia, and 4. Call upon the Government to lift all bans and not proceed with any discriminatory smoking legislation. And your petitioners as in duty bound will ever pray. by Mr Gorman. To the Honourable the Speaker and the members of the House of Representatives in Parliament assembled. The humble petition of citizens of Australia shows- That the people of New Zealand and the New Zealand Government have given an example to the world in their efforts to achieve a nuclear free South Pacific, and such a decision being endorsed by the people at a general election. Your petitioners therefore pray that the Australian Government support the principled stand taken by the New Zealand Government and urges it to condemn any efforts by the U.S. Government to impose economic or other sanctions on New Zealand in retaliation for their stand on nuclear vessels. We further urge the Australian Government to urgently implement its policy to promote the development of zones of peace and nuclear free zones in the Indian and Pacific Oceans. by Mr Kent. To the Honourable the Speaker and the members of the House of Representatives in Parliament assembled. We, the undersigned citizens, respectfully showeth: That we are totally opposed to the Labor Government's introduction of National Identity System involving the issue of a card to be know as the Australia Card. We consider that this form of national and compulsory identification will be intrusive, costly for taxpayers and business and will not be effective in combating the growing problems of tax evasion, illegal immigrants or social security. We therefore ask the House to take action to prevent the implementation of this legislation. And your petitioners as in duty bound will ever pray. by Mr McVeigh. To the Honourable the Speaker and the members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth that: There is inadequate provision in the Constitution for national referenda and the people are therefore denied sufficient opportunity to oppose or introduce legislation of national importance or consequence. Your petitioners humbly pray that the House of Representatives in Parliament assembled urge the Parliament to: Amend the Constitution to provide for the holding of national referenda in the following cases: 1. If four per cent of the electors petition the House of Representatives and/or the Senate with regard to proposed legislation. 2. If four per cent of the electors petition the House of Representatives and/or the Senate with regard to existing legislation. 3. If eight per cent of the electors petition the House of Representatives and/or the Senate with regard to introducing legislation proposed by the electors. And your petitioners as in duty bound will ever pray. by Mr Nehl. 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 Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully sheweth that: The Hawke Government's Australia Card will be an attack on the civil liberties and privacy of all Australians, will not achieve the claimed results, will provide a boost to organised crime and will be an enormous burden to the private sector, especially small business, already snowed under with government charges, taxes and red tape. Your petitioners humbly pray that the House of Representatives in Parliament assembled urge the Parliament to: Abandon legislation for any type of national identity system and work towards building a society based on trust, not suspicion. 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 we oppose plans by Telecom Australia to close many of the Telecom Business Offices (TBO's) and replace them with a reduced service to be co-located with the District Customer Services Office. We believe the public should be able to make telephone bill payments, applications for new services, selection of telephones and complaints, in person at a convenient and easily accessible location. Telecom Business Offices provide this service, and therefore it is wrong that their contribution and performance will only be assessed on their sales revenue. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: instruct the management of Telecom Australia to immediately cease all action to close any Telecom Business Offices. And your petitioners as in duty bound will ever pray. by Mr O'Neil. To the Honourable the Speaker and Members of the House of Representatives 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 Porter. To the Honourable the Speaker and Members of the House of Representatives in parliament assembled. The petition of the undersigned citizens of Australia respectfully sheweth that: 1. The decision by the Australian Broadcasting Corporation not to televise the Jack High Bowling Tournament in 1988 is cause for distress to the 500,000 bowlers and many non-bowlers who, for years, have enjoyed this interesting programme on television 2. The unilateral decision was taken after verbal assurance had been given that the 1988 event would be televised. This action is deplored and we feel should be reversed by the parliament in the interests of your many constituents. by Mr Rocher. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The Humble Petition of certain Citizens of Australia respectfully showeth: The Government by persisting with the Australia Card Bill has wilfully rejected the advice and recommendations of the Parliament of the Commonwealth of Australia's ``Joint Select Committee on an Australia Card'' which unequivocally rejected the Government's proposal in these words: ``The majority believes the creation of a new bureaucracy of 2000 public servants within the HIC [Health Insurance Commission], with the sole task of identifying every man, woman and child in Australia, is a wasteful exercise which will not address the problems of tax evasion and social security fraud but will provide the mechanism by which the very fabric of our society will be irreversibly altered, opening the way for the greatest attack on the privacy of individuals as the `Identity Bureau' identifies, monitors, and updates information on every person in Australia.'' (Report, 4.55, page 148) Your petitioners therefore humbly pray that the Government now withdraw the Bill as being contrary to the Common Law and traditional freedoms we have hitherto enjoyed in Australia, and should the Bill be nevertheless re-introduced, that the Members of the House without regard for party should unanimously reject the Australia Card Bill as being contrary to our personal liberties and the national interest. And your petitioners, as in duty bound, will ever pray. by Mr Rocher. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The humble petition of the undersigned citizens of Australia respectfully showeth that: Any proposals to abolish the Department of Veterans' Affairs gravely concern ex-servicemen, ex-servicewomen and their families, because they renege on clear and unequivocal commitments from various Commonwealth Governments to properly care for Australia's Veterans. Your petitioners humbly pray that the House of Representatives in Parliament assembled, urge the Parliament to: Ensure that the Department of Veterans' Affairs continues to exist as a separate and distinct Department of State servicing the needs of Veterans and their families. And your petitioners, as in duty bound, will ever pray. by Mr Ruddock. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This petition of concerned Australian citizens respectfully points out: That, for our survival, an effective Worldpeace Initiative needs to be established to work towards mutual understanding, world disarmament, economic well-being for all and full employment. This Initiative will help to ensure a sustainable society conserving natural resources, and revitalising soils essential for growing a plentiful and healthy food supply and tree cover for the needs of present and future generations. By working for these objectives, Australia can set an example for the rest of the world. Your petitioners therefore humbly pray that your Honourable House will: 1. Propose to the United Nations General Assembly that 1989 be declared International Year for Repairing the Earth. 2. Implement action programs leading up to 1989 which will include: A. Actively supporting the International Year of Peace in 1986 by reallocating at least 10% of our military expenditure to fund environmental repair programs. B. Implementing National Recycling Programs to reuse water, and to compost into hygenic humus all presently wasted organic garbage and sewerage-sludge mixed with fine ground powder from mineral-rich gravels and rocks, to use as a natural fertiliser in revitalising impoverished soils; C. Developing National Employment Programs giving priority to the planting and growing of healthy forests, food-producing trees and other crops and vegetation including environmentally sound use and reuse of water to assist the greening of Australia. And your petitioners as in duty bound will ever pray. by Mr Ruddock. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: We, the undersigned, 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 country's governments. Last year it became clear Pine Gap was spying on Greece. the electronic and photographic information its satellites receive is used to select nuclear targets in the territory of the Soviet Union and its allies. many US military activities short of nuclear war are also co-ordinated by Pine Gap. These include the war against Vietnam and the invasion of Lebanon by US marines in 1984. Pine Gap spends only a tiny percentage of its time monitoring arms control agreements, and even then the data gathered is so top-secret Australia has no access to it. Pine Gap's role will be expanded under Reagan's Star Wars scheme to extend the arms race to outer space, threatening the existence of our planet. And your petitioners as in duty bound will ever pray. by Mr Scott. To the Honourable the Speaker and the Members of the House of Representatives of the Commonwealth Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That in the wake of the Chernobyl reactor disaster, no nuclear reactor can be considered entirely safe. Your petitioners therefore pray that the government close down the Lucas Heights reactors immediately and permanently, and that no new nuclear reactors be built within Australia. And your petitioners as in duty bound will ever pray. by Mr Tickner. 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 Murray electorate respectfully showeth that: The August 1st changes to Medicare Benefit rebates are unfair to patients, such as those with chronic disabilities requiring consultant physician or after hours consultations. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to: Amend the Health Insurance Act and the National Health Act to restore the original rebates. And your petitioners, as in duty bound, will ever pray. by Mr Lloyd. Petitions received. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Madam Speaker has received a letter from the honourable member for Ryan (Mr Moore) proposing that a definite matter of public importance be submitted to the House for discussion, namely: This Government's inability to manage Australian taxpayers' resources to achieve an efficient and profitable outcome of its public enterprises. 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 MOORE(Ryan)(3.14) —The Hawke Labor Government has failed Australia in a number of significant areas. The three most significant today would be wages policy, government spending and microeconomic management. On a day when the October balance of payments figures were announced, with another $1.2 billion loss adding significantly to the overseas debt, at a time of crisis in both the market and exchange rates, the best the Australian Labor Party (ALP) can do is to have its own crisis of confidence manifested in the factional meetings, in-fighting and indecision that surrounds this issue of public enterprises. The impending fate of our valuable public enterprises is in the balance. In the meantime, the Labor Party struggles with its own identity crisis. The struggle within the Labor Party reached new heights this week. The decision deferred today for a week does nothing to overcome the crisis. It is worth while calling upon some of the quotes from the past to recall where the Treasurer (Mr Keating) stood in May 1985. He said that the sale of: the Commonwealth Bank or the Australian Industry Development Corporation or Trans-Australia Airlines . . . is simply vandalism of Australia's great public authorities. He backed that up in the House in May 1985 by saying: The Labor Party will fight tooth and nail to keep these public authorities in the hands of the Commonwealth. We are about refurbishing them and keeping them strong. We are not about wrecking them and selling them. The great public services they provide will continue to be provided while ever this Government has the breath to defend them. There is no doubt about the changes that are blowing in the Labor Party. The seeds of discontent were sown in the famous 1987-88 Budget. The Treasurer delivered a near-balanced Budget, but only by resort to increased taxation measures and some fiscal trickery. The budgetary figures have failed miserably to live up to the initial enthusiasm bestowed upon them. Instead of reducing waste and spending, the Budget has slugged moderate income earners and small business. Indeed, Senator Walsh, in a famous address in Perth, addressed himself to many of the deficiencies within that Budget. The Government has lacked the strength to make the hard decisions which would get Australia back on the rails. In wages policy the Federal Cabinet's recent decision to support another across the board, first tier wage rise in these times of profound economic uncertainty is nothing short of pathetic and display a weakness. This decision will have wide-ranging implications for the Australian economy in the not too distant future. The Minister responsible went to great lengths to warn the Government that failure to keep wage costs broadly in line with those of our trading competitors would expose Australia to `dire economic peril'. Meanwhile, in the area of microeconomic reform, we have a Treasurer who keeps talking about the impending reforms. Where are these reforms, or even the seeds of reform? When can we expect the Treasurer to embark on such a course of reforms? The inability of the Prime Minister (Mr Hawke) and the Treasurer to deal with our unprofitable public enterprises does nothing but bode ill in this area of reform. Public enterprises are an important part of the Australian make-up. History shows that their initial construction happened at times when money was not available for their completion. It was a time when Australians were short on resources. The services that were created, such as Trans Australia Airlines and some of Telecom old Postmaster-General departments, put together services of great size and strength. But those days have gone. Australia is now in a position where the financial community is able to fund these organisations. Because of that, it is time for change in a way that we have not thought of before, and indeed in a way in which the Prime Minister obviously had not thought of before when he spoke earlier in the year about the need in this case for privatisation as: . . . a one-off fire sale, a sale of the century for your assets-the assets of the people of Australia. They would transfer them into the hands of the privileged few, to the cost of every one of us. That was in 1985. He followed that up, as he turned round the corner in 1987, by saying: We must, for example, examine whether the need for further reduced budget outlays and public sector borrowing requirements is itself constraining the ability of the Government to provide the capital which some publicly owned enterprises need to perform their tasks efficiently and effectively. Freed of these constraints these enterprises may become more efficient and more viable, and the outcome of which could only benefit consumers, taxpayers and employees of these enterprises themselves . . . That was quite a turnaround in a period of two years. The Prime Minister in opening up the debate on privatisation earlier this year said that certain Government holdings `that could have, and no doubt did make good sense in earlier times are not necessarily what is appropriate for current circumstances'. With that statement broke the war. The Prime Minister continued: Anybody who knows anything about economics . . . understands that privatisation is no substitute for the hard decisions that have to be taken on government expenditure . . . It is quite clear that . . . in Australia as a whole, privatisation would be an expensive and disastrous experiment. That was said in 1985. The Prime Minister reversed this attitude towards privatisation with no forewarning, even to his Party, sending the entire Labor Party into a tailspin. This prompted the then Minister for Industry and Commerce, Senator Button, to say: The general consensus around the ministry is that whoever put the privatisation issue into the market-place didn't do it in a very good way. That is not bad from Senator Button. Since August this year the privatisation debate has run rampant. The Prime Minister has had all doors slammed in his face. Last night it became necessary to carry out eleventh hour discussions to arrive at a face-saving compromise to rescue the Prime Minister from an embarrassing defeat. Since August, the Victorian, South Australian, Queensland and, most recently, the New South Wales, branches of the ALP have rejected privatisation out of hand. Meanwhile, the Australian people have been bombarded with a plethora of rhetoric on privatisation from the mouths of various members of the Labor Party. Labor parliamentarians have been far from docile whenever the issue of privatisation has been raised. It seems that nearly every member of the Labor Party wants to espouse his personal doctrine on how best to handle privatisation. Clyde Cameron, who is well known to many honourable members, has accused the Government of betraying the Labor Party's trust. An ALP backbencher, the honourable member for La Trobe (Mr Milton), has threatened to resign over the issue. Yesterday in Sydney we were exposed to a wide range of diverging views from members of different factions of the ALP on this very topic-do we or do we not privatise certain unprofitable government entities? We heard some remarkable comments from the honourable member for Fraser (Mr Langmore) in a speech entitled `The Argument against Privatisation'. He said that `reduction of debt is not a high priority in Australia' and that `privatisation must, therefore, be viewed most sceptically'. In short, the Prime Minister has created a monster of enormous proportions for the ALP, as we saw in Question Time today. The Prime Minister's fatal mistake was his neglect to preface the debate by asking what is the best way to increase efficiency and competitiveness in the public sector. This failure has diverted the privatisation debate from its natural course. Instead, the debate has been taken down another track which hinges on whether the Labor Party will allow the Prime Minister to reverse the traditional Party platform. This diversion has proved detrimental to resolving the wider, more pressing dilemma of who is going to finance the growing needs of our public enterprises. According to the estimates of Senator Evans last night, between the Commonwealth Banking Corporation, Qantas Airways Ltd and Australian Airlines a capital injection of over $1 billion will be necessary to prop up our ailing public industries in the next few years. A closer examination of the impoverished condition of some of our public enterprises focuses attention on the need for immediate relief. Australian Airlines will be released from the outdated two-airline agreement in 1990. The Government has failed, however, to follow its deregulatory policy through to its logical conclusion. The Government's decision is glaring in its failure to mention how Australian Airlines, once freed from the constraints of the agreement, will survive in the hubbub of the very competitive market-place. Mr Lloyd —They have already had to cancel new aircraft. Mr MOORE —That is quite true. Mr DEPUTY SPEAKER —Order! If the Deputy Leader of the National Party interjects from out of his seat again, I might have to draw his attention to that. Mr MOORE —In the case of Australian Airlines, deregulation and privatisation are bound together. The Government readily admits to being too bankrupt to provide the funds necessary to support an airlines which is surrounded by financially smarter competitors, both here and overseas. Australian Airlines' meagre profit last year of $39m was achieved only by the fire sale of surplus aircraft. Disregarding these proceeds, it recorded a profit which fell to just over $10m for 1986-87. Without an immediate injection of funds, our aviation industry increasingly will face a monopolistic situation. This is due to Government inaction. For Qantas, the case for privatisation is ready-made, as Qantas is already organised as a private enterprise company. It has reasonable profitability, recently posting a $63m profit, and possesses roughly $2 billion worth of assets. However, the privatisation struggle for Qantas is one of survival. While international competitors have embarked on re-equipment programs, Qantas has been idle. As established, Qantas will require a capital infusion of at least $400m to continue to compete in the cut-throat international market. The strongest competition for Qantas among foreign airlines no longer comes from Government-owned airlines. Private shareholders now own a majority of the shares in eight of the 10 largest international airlines yet, the honourable member for Fraser, the spokesman for the Left, continues to insist that community interests are best served by keeping all public enterprises under complete public ownership. The Commonwealth Bank is also suffering from a severe lack of capital, as Senator Gareth Evans indicated, yet each year the Government continues to skim off 40 per cent of its profits after tax at commercial rates. I predict that if the Government were to take its hands out of the till in that area, the Commonwealth Bank could survive as a healthy and competitive bank in a deregulated climate, if it fails to provide the capital requirement. The bank is valued at more than $2 billion-the opportunity cost to the Government and Australia at current bond rates exceeds $270m a year. The new private enterprise would be in the position to raise capital in the market-place, along with the other private enterprises. The privatisation of any enterprise-as the Opposition sees it-would proceed along the following guidelines: there must be demonstrable benefits to the consumer and the taxpayer; the position and job security of existing employees would be given special consideration; the sale of shares to employees would be encouraged wherever possible; the quality and availability of services to remote areas would not be allowed to deteriorate; any large scale sales would be timed so as to avoid disruption to capital markets; sale proceeds would not be used to finance new Government expenditure, but would be directed towards the reduction of accumulated public debt; and the Opposition would ensure that the prudential banking requirements of any banking move would be maintained with restrictions on single shareholdings. On government intervention, the Government contributes little to the success of public enterprises. On the contrary, it is busily sucking public enterprises dry of their profits to finance extravagant spending. Until public enterprises are freed from the burdens of Public Service conditions, they will remain less competitive than their rivals on a public base. The public enterprises are not allowed the discretion of deciding how their profits will be spent. Ministerial intervention denies the opportunity of expanding or making essential long-term capital outlays. Restrictive capital raising policies, including limitations on external investments and borrowing requirements, place further constraints on growth. The burden of Public Service conditions, including mandatory superannuation commitments and in some cases inappropriate board appointments, stymie creativity and innovation. The general lack of high calibre management operation because of the uncompetitive salaries brings the public enterprise down to the lowest common denominator. Given half a chance, the Government will continue to rape the capital, plunder the profits, and distort the pricing policies, thereby disadvantaging the public enterprises's odds of competing effectively. The cold, hard world of competition does not allow this sort of Government intervention. It is worth noting the trade union role. Intelligent and rational debate over privatisation has been completely bypassed. Mr DEPUTY SPEAKER —Order! The honourable member's time has expired. Mr HOLDING(Melbourne Ports-Minister for Employment Services and Youth Affairs and Minister Assisting the Treasurer)(3.29) —The key to this matter of public importance debate could be ascertained by any person in the public gallery who happened to enter Parliament House early this morning. Basically, it had been a dull weekend for news. A group of television reporters was outside the House hoping to get a comment because the news of the day looked like being an internal discussion within the Australian Labor Party Caucus about privatisation. I passed the Leader of the Opposition (Mr Howard) as he came into the House tremendously excited. This Opposition has no philosophy and no policy and lives off newspaper headlines. One did not have to be a genius to predict that today in the Parliament someone on the other side of the House would get up and raise a matter of public importance. Let us look at the terms of it: This Government's inability to manage Australian taxpayers' resources to achieve an efficient and profitable outcome of its public enterprises. For the first five minutes we heard the honourable member for Moore (Mr Ryan) rambling at large about the state of the economy and about wage claims by the trade union movement. But how is it that this spokesman-who happens to carry the responsibility for saying what the Opposition's policy on our public enterprises is-at no time addressed in a single detail the financial position of any one of our major statutory corporations? Mr Moore —I did so-Qantas. Mr HOLDING —I am happy to deal with Qantas Airways Ltd. The key is the sloppiness, the mediocrity and the inefficiency of Opposition members who will grab the latest headline out of the paper, no matter whether it is right or wrong. Let me deal with the tactic used. It is public knowledge that Senator Gareth Evans, the Minister for Transport and Communications, indicated that in the short term, in order to make our public enterprises viable and efficient in discharging their obligations, there would need to be an injection of about $1 billion. There is nothing secret about that; that is quite public. But the purpose of the $1 billion injection is to maintain a level of competitiveness and efficiency and a capacity to fulfil Qantas's public objectives. How was the Minister's statement quoted by the honourable member for Moore? I took his words down because they are evidence of how this Opposition operates. He said: Senator Evans has indicated that there will have to be an injection of $1 billion- here it comes- in order to prop up ailing industries. Do honourable members see the slide-and do they see the lie? The reality is that there is a very real difference between a statement that there has to be an injection in order to enable these structures to continue operating effectively and competitively and a statement that substitutes for that `to prop up ailing industries'. Again, it is this incompetent Opposition. Is it saying to the people of Australia that all public enterprises, every one of them-Qantas, Australian Airlines and Telecom Australia-have to be disposed of lock, stock and barrel? Is that the Opposition's position? We are entitled to know because about six months ago that was its position. But today we had an implausible argument based on a clear and deliberate misconstruction of what was said by the Minister. At no stage did the Minister say that $1 billion was needed to prop up ailing industries. The honourable member for Ryan chose to deal only with Qantas, so let us take that one example. Let us look at this `ailing industry', as it was described by the honourable gentleman opposite. In 1986-87 Qantas had one of its strongest performances on record. It had a record profit on operations of $104.3m. Mr Beale —That is quick work. Mr HOLDING —It is quicker than some of the nonsense that we hear from the people opposite. Qantas had revenue earnings of over $2.6 billion. It made a dividend payment of $20.2m. For the first time it carried over three million passengers in a year. Does that sound like an ailing industry? Does anybody believe that with that record-- Mr Beale —They asked for money again. Mr HOLDING —Qantas would not need to ask for money from the honourable member. It is without argument that, in order to capitalise Qantas, further funds will have to be found. But that does not justify the deliberate distortion of the honourable member opposite in describing Qantas as he did and attributing the words to Senator Evans. Mr Moore —He said it. It was on television. Mr HOLDING —The honourable member is not telling the truth if he suggests that Senator Evans has ever described Qantas as an ailing industry. I throw the lie back in his face. The Qantas group performed strongly in 1986-87, earning a profit on operations of $104.3m-the highest ever recorded by this company. This compared with $44.8m in 1985-86-an increase of 133 per cent. This translated into an operating profit, after the inclusion of abnormal items and payment of income tax, of $63.8m compared with $3.8m in 1985-86. Total revenue earned by the group for the year was $2.6 billion, an increase of 27 per cent over the previous year's figure of $2 billion. Of this revenue, $1,672m-or over 65 per cent-was earned overseas. The year's trading performance has placed the company in a strong position. Liquid assets have increased from $163.1m to $625.8m. They are the facts. Those facts were available to the honourable gentleman opposite. Does any- body seriously say that those facts could honestly be described by any parliamentarian of repute as the figures relevant to an ailing company? Of course, that is nonsense and honourable members opposite know it is nonsense. That does not alter the fact that further quite considerable injections of capital will have to be found to purchase modern aircraft. The figures have been given publicly by Senator Evans. In a period of economic restraint, that raises the question of where those funds can best be found. The Labor Party and the Prime Minister (Mr Hawke) have addressed that question quite honestly. Policy considerations have to be dealt with and that will take place openly and publicly in the relevant forums of the Labor Party as we determine the answer to that question. There is no secret about that. But to try to gee that up as some sort of crisis within the Government or within the operations of our statutory corporations is palpable nonsense. Honourable members opposite talk in glib generalities about disposing of our statutory corporations. I refer again to the terms of the Opposition's own matter of public importance: This Government's inability to manage Australian taxpayers' resources to achieve an efficient and profitable outcome of its public enterprises. Mr DEPUTY SPEAKER —Order! The people in the Opposition official boxes should not discuss matters with members in the House. Mr HOLDING —The responsibility of public enterprises is not simply to maximise profit. They also have a clear duty, in terms of their public responsibility, to the needs of the Australian taxpayer. Let us apply that principle to Telecom. Last year Telecom's profit was roughly $500m. It could have been $1,500m if Telecom was prepared to abandon its policy of cross-subsidy to Australians living in remote areas. This is because in large country centres, such as Dubbo which is part of the National Party of Australia seat of Parkes, the cross-subsidy of every Telecom subscriber is over $100 per year. Do honourable gentlemen opposite say that that is wrong and that Telecom could make a much larger profit if it did not have that cross-subsidy? Mr Peter Fisher —What about the State railways? Mr HOLDING —Let us just deal with the issue of public corporations. Do the honourable gentlemen opposite, who represent country areas and who come into this House and support this limp, lame brained motion, seriously suggest that they want to go back to their country electorates and say, `We believe Telecom should maximise its profit, and it can do that and have another $650m a year by abandoning cross-subsidisation.'? Is that their position? If it is, they should have enough guts to get up in this Parliament and say that it is. They should not indulge in this double standard of saying in here on the one hand, `Oh, yes, let's attack these public instrumentalities and tell them they can make more profit', and on the other hand saying, `We will encourage our constituents to put their hands into the till'. They cannot have it both ways. Let us look at one of the programs of Telecom which I publicly support, and I believe honourable members opposite who represent the remote parts of Australia also would support. The digital radio concentration system, which is a sophisticated microwave communication system, was installed in the community of Rolleston, a remote part of Queensland, at a cost of $1.3m, and it provides a service to 73 subscribers. The highest fee paid for that installation was $1,300 and the estimated revenue at the end of any financial year which will come from that community is $35,000. So do the honourable gentlemen opposite say, `There is Telecom providing a service which, by its very nature, must produce a loss.'? Or do they say, as we on this side of the House say, that those who live in the remote parts of Australia are entitled to the best range of services that a public enterprise can provide? If that involves a loss, that is something which Telecom has to face up to in terms of its public responsibility. When it acts to provide that level of service, let there be no yapping on the other side of the House from those who represent remote electorates and who come into this Parliament and plead, often eloquently and with substance, that their constituents are entitled to that same level of service, because the provision of that service is clearly going to affect the profit capability of Telecom. Since the Opposition is playing for the public headlines, this would have been an opportunity-and we would have expected it from the honourable gentlemen opposite if this had been an Opposition worthy of its measure-for it to come in here and tell us which of the public enterprises it would sell. Do honourable members opposite honestly believe that Telecom can be sold to a private company whose board of directors' first responsibility is to maximise the profit? Do they honestly believe that they can dispose of these assets in that way and hope to provide the level of services which they, as members of this Parliament, demand? This is an ill-contrived motion. It has not been thought through. The Opposition had an opportunity to state on the record the details of its policy in terms of our public corporations. What we have got is yet another mish-mash of arguments hoping to get a headline but which, in the final analysis, shows that this Opposition is totally bankrupt in producing alternative political philosophies, let alone detailed public philosophies. Mr DEPUTY SPEAKER —Order! The honourable member's time has expired. Mr McGAURAN(Gippsland)(3.44) —The Minister for Employment Services and Youth Affairs and Minister Assisting the Treasurer (Mr Holding) has unintentionally encapsulated for us the paralysis that has developed within the Government over this whole privatisation question. Like it or not, no matter how much the Minister tries to present the situation in its best light, the Prime Minister (Mr Hawke) was belittled in today's Caucus meeting when it was promised that this whole privatisation debate within the Government would be resolved. Instead, it has been put off at least another week, and indeed further down the track than that. In all of today's major newspapers appeared cleverly planted background briefings by the Prime Minister and his faction as to how today's Caucus meeting would develop. Nothing could have been further from the truth, as events turned out. We were told that yesterday Senator Evans, the Minister for Transport and Communications, to use the words of Michelle Grattan, `threw down the gauntlet' to the opponents of privatisation, by putting it pithily that the choice of putting funds into public enterprises or using the money for health, welfare, education and other purposes, faced Caucus. Moreover, we were told that the Prime Minister gave Senator Cook, from the Centre Left faction, a lift in the VIP flight back from Perth last night, and lobbied him intensely. We were also told that a resolution would take the form of Caucus committees being assigned to each of the public enterprises and overseeing the inquiries into whether those enterprises should be privatised in whole or in part. Mr Howard —They would be thrilled at that, wouldn't they? Mr McGAURAN —They were so thrilled at it that they threw it out the window. The honourable member for Fraser (Mr Langmore), the honourable member for Calwell (Dr Theophanous), the honourable member for Reid (Mr Uren) and Senator Cook, members of the Left and the Centre Left, all entered into one of their rare but unholy alliances. What was the result? The result was that the Prime Minister finds his proposals for privatisation, upon which he has staked so much of this own reputation and the economic plans of this Government, in tatters. There is no other word for it. Mr Howard —And he has been to Damascus on it too. Mr McGAURAN —As the Leader of the Opposition says, the Prime Minister has had a radical conversion to privatisation, because only a year or two ago he was slurring anybody who supported the idea of privatisation as being anti-motherhood. Now we have him addressing various conferences, the recent one being the conference of economists, when he said: The question should be not: `Why should we sell a given enterprise?', but: `Why should we continue to tie up our resources in it?' That is the question that the Prime Minister failed to answer at today's Caucus meeting. Mr Deputy Speaker, you would be aware that privatisation is a worldwide phenomenon. Every significant Western economy has engaged in major and very extensive privatisation programs. Indeed, Japan has a major privatisation program and, as the Leader of the Opposition (Mr Howard) would know only too well, developing countries such as Nigeria, India, Pakistan and Mexico have all engaged in extensive privatisation of government instrumentalities. Why has it not occurred in this country? Why, in the face of all economic logic, has the Government not seriously addressed the question of privatisation in part or in whole, of a whole number of public enterprises, such as Australian Airlines, Qantas Airways Ltd, the Commonwealth Banking Corporation and the Australian Industry Development Corporation? The Commonwealth Bank suffers the same public enterprise sickness that so many others suffer. What about the Australian National Railways Commission and the Australian National Line? All of them deserve to be closely examined as to whether they are fulfilling the proper provision of services at the cheapest price to consumers. But why is this not happening? Firstly, there is the ideological cynicism of so many members in the Government, but more than that, there is the role of the trade union movement which seeks to keep in place, at a cost to the taxpayer, a whole number of outdated work practices. It wants to continue with a whole number of sacred cows, even though retraining could take place while current jobs may or may not disappear, many others could be created as a result of the increase in the volume of service in an area such as Telecom Australia. Let us take first the case of Australian Airlines. As a statutory authority, it must borrow with Loan Council approval. In other words, the Government borrows any time it wishes to inject capital into Australian Airlines. This is an extremely unsatisfactory way of doing business because it means that Australian Airlines is always in a highly geared state. Borrowing in this way leads to a high interest rate burden, resulting in a high ratio of debt to equity. Compare that situation with the situation of Australian Airlines' main competitor, Ansett Airlines of Australia. If Ansett wants to buy 10 new aircraft, it can draw on the reserves of its parent company, the TNT organisation, which can issue extra shares to raise the capital. In other words, Ansett can inject capital into its operations whereas Australian Airlines must always borrow it. At present Australian Airlines needs $300m, mostly for new aircraft, to compete with Ansett. Some $130m of that amount has already been injected into Australian Airlines by the Government and another $170m is required. That money is not available from this Government, as the former Chairman of Australian Airlines, Mr Neil Smith, said earlier this year. On 7 April this year the Age quoted him as saying: . . . that a leading Australian financial company recently told Australian Airlines `that it could justify, and needed' a capital base of $300 million . . . The article continued: Obviously the Federal Government hasn't got $170 million to play with today . . . The problem is that, when the Government borrows money to inject into Australian Airlines, Qantas or other public enterprises, it has two major effects: one is to increase the public debt and the second is to raise the deficit. That has immediate implications for economic policy. It straightaway cuts our ability to lower taxation. In other words, taxpayers' money is at stake here and that is why it is imperative that the Government responsibly and, admittedly, in a calm, measured way-a sober way even-examine what public enterprises can be privatised, whether in whole or in part. Unless the Government is prepared to allow Australian Airlines to raise its own funds, 5 per cent of Australians who travel on Australian Airlines will be unnecessarily subsidised by 95 per cent of Australians. Qantas is in exactly the same position. It needs $400m over the next five years if it is to remain viable within an increasingly competitive market. Because Qantas must also receive from government injections of capital, which is borrowed money, it now has a very high debt equity ratio-said to be 76 : 24. Qantas simply cannot compete except by draining taxpayers' funds into the future. Privatisation resolves immediate budget problems, as I have said. Firstly, one does not have to inject capital and thereby increase the deficit. Secondly, selling off certain projects or publicly owned works can gain immense amounts of revenue which will lead to a reduction in government debt. Thirdly, privatisation gives the Government scope for reducing taxation. Fourthly, it will lead to increased competition, and thereby the consumer gains greater choice and better services in many cases. Let me look at Telecom. Parts of Telecom should be privatised, particularly some retail, maintenance and installation functions. Senator Gareth Evans has established in the Department of Transport and Communications a review of future Telecom strategy. How much longer will Telecom be a player in the field of communications while it is simultaneously the regulator of communications in this country? No wonder accusations are made in the private sector that Telecom makes the rules of the game to suit itself. The privatisation debate within the Government seems to be grinding to a halt with the almost certain defeat of the Prime Minister. Consequently, the Australian taxpayers will suffer heavily. It is incumbent upon the Prime Minister continually to push the examination of which public enterprises should be exposed to the winds of change and private sector competition. As long as the narrow-minded ideologues of the Left and Centre Left hamper the Prime Minister-- Mr DEPUTY SPEAKER —The honourable member's time has expired. Mr McGAURAN —His prestige will suffer and so will Australian taxpayers. Mr DEPUTY SPEAKER —Order! The honourable member for Gippsland should be aware that, when the honourable member's time for debate has expired, that is the time for him to resume his seat. Sometimes the Chair allows honourable members to finish a sentence, but it is not really proper for an honourable member to continue with the rest of his speech. Mr O'KEEFE(Burke)(3.55) —The honourable member for Gippsland (Mr McGauran) was fraudulent in his approach, and it was the first time we had heard a member of the National Party of Australia-those who claim to represent country people-come clean in this House on its policy of selling off Telecom Australia. We talk about the rural cross-subsidy, about the numerous measures that have been taken to improve communications for country people and about the cost of communications to them, but the honourable member has now flushed the whole show out in the open and he does not care about the $100 extra that will go on the phone bills of country people under his policies. We will hear plenty about that. As my colleague the honourable member for McMillan (Mr Cunningham), the former chairman of the country task force, has said, we will be using it around Australia. The comments we have just heard from honourable members opposite were purported to be a debate about the Government's inability to manage Australian taxpayers' resources to achieve an efficient and profitable outcome of its public enterprises. What we got instead was a whole lot of haranguing for privatisation. This came from an Opposition that claims to have always had a deep interest in the operation of public enterprises, which of course is untrue. The Opposition parties had over 30 years of government between 1949 and 1983 to implement policies to improve efficiency and profitability. They left us with a public sector which was demonstrably run down. They ignored the capital requirements of our public enterprises and imposed regulations and restrictions to impede their operations and efficiency. Today we heard a bit about the two-airline policy and the position of the airlines. Let it not be forgotten that those who introduced the two-airline policy in this House and into Australia used it in its first 20 years to effectively strangle competition for Ansett Airlines of Australia. Let us not forget why it was put in place, whom it was designed to protect, whose interests the two-airline policy has served, and who were the masters of that government of the day. Let us look very briefly at the track record of the Government since 1983 in the efficient operation of public sector enterprises. I turn first to the organisation that probably had the most demonstrable turnaround, that is, the Australian National Line (ANL). In 1982-83 ANL recorded a record loss. It had been allowed to run down to the point where there was a loss from all services amounting to $26m. To alleviate the financial burden of ANL, the newly-elected Labor Government increased ANL's capital by $90m and gave it a loan conversion in 1983. By 1983-84 ANL had turned around that operating loss of $26m to an operating profit of $3m. By the end of the 1983-87 period its gearing ratio has improved and the $70.5m capital injection has been used to write down the organisation's borrowings and has been used to bring the Government a dividend of $5m. ANL is now a taxpaying organisation instead of a loss making organisation. In the 1985-86 year ANL paid $7.5m in tax because we have put the organisation into profit. Let us also turn to Qantas Airways Ltd. As the Minister for Employment Services and Youth Affairs (Mr Holding) said earlier in the debate, Qantas is experiencing a period of strong growth. Sure, there are strains on the organisation. All honourable members have heard the debate about the number of tourists wanting to come to Australia and the difficulties Qantas has had in making the transition arrangements to cater for that. However, let us not forget that that has come from the Government turning around organisations that were run down and providing a basis for those organisations to build. Last year, Qantas turned in an operating profit of $104.3m; the highest ever recorded by the company. That has enabled Qantas to pay the Government a dividend of $20.2m. The Government has taken a number of its operations and successfully turned them into profit-making operations, of benefit to the Australian community, which fulfil a social obligation-which I shall refer to in a moment-and which are now proven financial performers. One must also consider Australia Post. When one hears contributions from people such as the honourable member for Gippsland referring to public sector operations, one must consider Australia Post which is, as I understand it, the only public sector postal organisation in the Organisation for Economic Co-operation and Development (OECD) countries that does not require an injection of funding or recurrent funds from government in order to operate. Australia Post operates both efficiently and profitably and, at the same time, manages to keep postal charges at levels that are the lowest of the OECD countries. One could go on with an analysis of the steps that have been taken to turn around the performance of public sector operations. I shall mention a further step, a major step-the announcement in October this year of the new policy guidelines issued for the operation of Commonwealth statutory authorities and Government business enterprises. Those guidelines lay down for the first time capital requirements, efficiency performance ratios and dividend return requirements. In fact, they lay down the process of accountability by which these public sector operations will perform into the 1990s and the year 2000 in the public sector and the private sector. I stress those points. I shall briefly refer to Telecom Australia, because it is often brought into a debate such as this. An organisation such as Telecom can perhaps be used as the best example of the difference between public and private sector operations. As Government members, we must consider the role of these organisations and the return we want from them. We must ask ourselves what the requirements are. Is there just, as the Opposition would have us believe, a profit-making requirement? Is it just a matter of handing an organisation such as Telecom over to private sector operations so that they return the greatest profit possible? Of course it is not. When considering Telecom, one must note its social role and its responsibility to ensure that people all over this land have access not just to the communications network in Australia now but also to the communications networks of the world in the year 2000. At that time, people will not have telephones in their lounge rooms, studies or whatever; they will have all sorts of fancy electronic gadgetry hooked on to the ends of phone lines enabling them to talk not just to people in this country but also to people around the world. If Australia wants to be an exporting nation, if it wants to respond and relate to the world quickly and competitively, it must have modern communications and modern technology. We must ensure that Telecom is an organisation that not only fulfils a social responsibility but also ensures that those facilities are on board. A strategic role is involved. Has any honourable member tried to put the view that in times of national importance in defence or other areas the communications network should not be in the hands of the government of the day? It is absolutely absurd to have the communications network in the hands of the private sector at a time of national crisis. I look to this debate and ask myself why it has been bought on and why this sort of policy has been thrown on the table. Mr Barry Jones —What is your answer? Mr O'KEEFE —All I can say is that it is an attempt at a piece of mischief; it is a piece of mischief drummed up by those who want to sell off government profit-making ventures because they claim that they can run them better. Let us not forget that these are the people who continually race off-shore to borrow foreign capital, who continually `dud' our tax system with takeover write-offs and who threaten to take their money overseas the minute things get a bit difficult for them in Australia. They are the people who make an investment in operations only if they are guaranteed a tax deduction with profit written all over it. They got this country into the situation it is in with the policies and the approach to economics portrayed by the honourable member for Gippsland. They have no genuine interest in nor commitment to public sector enterprises. It is for those reasons that their views are not taken into account by this House. Mr DEPUTY SPEAKER(Mr Ronald Edwards) —Order! The debate is concluded. Debate resumed from 5 November, on motion by Mr Duncan: That the Bill be now read a second time. upon which Mr Blunt had moved by way of amendment: That all words after `That' be omitted with a view to substituting the following words: `whilst not declining to give the Bill a second reading, the House notes the need for the maintenance of localism in broadcasting and the proper representations of local interests in the ownership of television licences'. Mr DEPUTY SPEAKER(Mr Ronald Edwards) —Before the debate is resumed, I remind the House that it has been agreed that a general debate be allowed covering this Bill, the Radio Licence Fees Amendment Bill (No. 2) and the Broadcasting Amendment Bill (No. 4). Mr COWAN(Lyne)(4.07) —The Television Licence Fees Amendment Bill (No. 3) was subject to debate in the House on the day we last sat, at which time some interesting issues were raised. I want to be brief, but this matter concerns me, as it concerns all honourable members. Over the past year, a number of pieces of legislation have been introduced into Parliament that have had major effects upon the broadcasting, television and media interests generally throughout Australia. It concerns me that it appears that the Government is acting in an ad hoc manner with many of the matters it has raised concerning the future of the broadcasting and media industry generally. That, of course, is of great concern to the Opposition because it knows how important the media of Australia is so far as the population is concerned. Naturally, the Opposition wants to keep Australia abreast of the challenges that front all three sections of the media today but, at the same time, it wants to ensure that those sectors are closely consulted about legislation that may happen to come before the Parliament. I have a feeling that the legislation now being debated has not been sufficiently debated with the interests involved within the broadcasting industry throughout the Commonwealth. I wonder whether the Federation of Australian Radio Broadcasters has been adequately consulted about the Bill. I am aware that the Federation contacted the Minister for Transport and Communications (Senator Gareth Evans) and put its case regarding considerations it believed should take place before the legislation was presented to Parliament. I trust that the Government has done that. I ask the Minister for Land Transport and Infrastructure Support (Mr Duncan), who is at the table, when he responds to the debate to give the House an assurance that discussions have occurred with the various sectors of the industry concerned. I said earlier that it is my opinion and the opinion of the Opposition that the Government has made up the legislation on the run in an ad hoc fashion. It would appear that the Minister for Transport and Communications in the other place has approached the Treasurer (Mr Keating) and said, `Righto, if we are going to expand the broadcasting industry generally throughout Australia, here is the opportunity for a tax grab'. It will be gleaned from the Minister's second reading speech that the Government hopes to collect $11m in the first year and build it up over time to $16m per year. If the charges for licences and establishment fees are raised-I will speak about this matter very shortly-it will be an extra burden on the radio stations throughout this country. There are 138 commercial radio stations in Australia of which 102 are located in country areas. In New South Wales there are nine in the metropolitan area of Sydney and 37 in rural New South Wales. There are nine in the metropolitan area of Melbourne and 14 in rural Victoria. There are six in metropolitan Brisbane and 23 in rural Queensland. Rural Queensland is a very big area to cover. There are five in metropolitan Adelaide and six in rural South Australia. There are two in metropolitan Hobart and six in rural Tasmania. There is one in Darwin and one in Alice Springs. There is no great profitability in commercial radio stations in rural Australia. As I was travelling around the country the other day the owners of one particular station said to me that in the last year, even though they had a $1m turnover, they made a loss of $6,000. Mr Barry Jones —That is not typical. Mr COWAN —It is true and it is indicative of quite a percentage of our rural radio stations which serve a defined area. Although some areas are not large a service is being provided. The rural stations are dependent upon the revenue they receive from the service area. Today, the economy is not sound. In the listening areas of some parts of Australia 20 or 25 per cent of the people are unemployed. This reflects on the business community which depends on advertising in order to make a profit. In the case of one particular radio station, if it were not for miscellaneous income it would not have been able to make a profit. As I said earlier, this is indicative of what is occurring to radio stations generally throughout rural Australia. I am not referring to the stations in the metropolitan areas because I honestly do not know very much about them. The point is that in the last Budget radio licence fees went up. If an AM station with a turnover of $1m per year applied for an FM licence it would cost it 50 per cent of its income which would be $500,000. There are reasons, such as reception, why a station may require such a licence. There might be a community FM station within the area. There might be opposition and it would be essential for a station to be able to turn over to FM if it sees it as a necessity for its listeners and advertisers. Would any honourable member of this Parliament think it fair that a radio station, with a turnover of $1m a year but not showing a profit or which had little viability, had to pay up to $500,000 in order to obtain an FM licence? These matters concern us. I appeal to the Government to look at the legislation before us. It is not too late to refer the legislation back to the industry, to give industry the opportunity of being able to say what it feels about it. If a station is to be viable, if it is to pay extra licence fees, if it wants to go to FM, it is necessary for it to apply for that extra licence. If it is to pay half of its turnover it will be necessary for it to increase advertising fees. This is its only way out. It will have to increase the advertising fees and people within the community who depend on advertising will be the ones to suffer. I do not have any financial interests in radio or media of any kind but I know from doing some arithmetic and from common sense that these stations will have to increase their advertising fees. Mr Millar —It is a logical extension. Mr COWAN —As the honourable member for Wide Bay said, it is a logical extension because they will not be able to operate or produce the programs they want to for their community unless they are viable. This is a very important factor. I ask the Government to look at this matter because it is affecting our country radio stations generally. It has been said that it is the Government's intention to auction new licences. Fortunately, the Government has changed its mind. It has replaced this idea with the establishment fee program. This idea is almost as bad as the idea of the auction system. I do not know whether the Treasurer was advised to do this by Senator Gareth Evans but the fact is that the Government will collect $11m a year in fees to carry out its social security, Aboriginal and other programs that it thinks necessary-perhaps they are programs that we also think are necessary. This is the manner in which the Government will collect this extra money. The money will be wrenched from every little sector of the community, wherever there is an opportunity for this Government to take money from individual taxpayers or groups. Whether they are broadcasters, media or industry people, this Government takes it, which in turn boosts the consumer price index, boosts the cost of living, creating proverty, a matter I will not speak about now. The matter was mentioned at Question Time. The subject of cross-media ownership has been adequately spoken about in this House. I take no great exception to what the Government proposes with this legislation. If a person cannot own more than 15 per cent in any other form of media within a viewing or receiving area, that is all right. I would expect that it would be continually subject to review by whoever occupies the treasury bench. We have no great objection to the fact that one network can now own from eight up to 16 stations. There are certain advantages for a network so far as purchasing, broadcasting, equipment, plant and programming are concerned. If the legislation improves the situation for radio generally throughout Australia we will certainly go along with it. I want to say something about the quality of programs. We have children sitting in the gallery today. I had one night at home during the week and my wife and I watched a program on Australian Broadcasting Corporation (ABC) television at 7.30. A gentleman was talking about sexual matters and young boys. Mr O'Keefe —Here we go again. Mr COWAN —Yes, the honourable member says, `Here we go again'. I was never so concerned in my life. Ten years ago the population of this country would never have received this type of information. Television is recognising homosexuals, de facto relationships and lesbians. This Government is allowing this. I hope these programs do not convert the minds of Australians into accepting these practices as normal in the community. I sincerely hope not. It appears to be going that way. I was not happy that at that time of evening this gentleman was appearing on the ABC advocating that kind of behaviour. I did not think that was very good. I raise that matter because I hope that attitudes and the regulations imposed in these Bills and others will cause our broadcasting industry to stick to programs of good morality and good conduct, as every decent Australian requires. While I am in this place and while other Opposition members are here, we will stand up for what we believe to be the right principles under which we should work in this respect. I close by saying this: I believe that there are delays in the Australian Broadcasting Tribunal's hearing of cases. We realise that every three years each radio station in Australia must renew its licence. At that time it is the station's duty to make a submission which is heard by the Tribunal. I know that the Tribunal may be able to deal with that without interviewing the people concerned, but I assume that a lot of station owners are interviewed by the Tribunal. I wish the Minister would tell the House what the delays are, because I understand that the Tribunal also hears our television applications. I think that there may be a fairly long delay resulting from the fact that one tribunal has to hear all these applications for licence renewals and new licences and has to deal with any objections that may be raised. Whilst we support the general thrust of the legislation, certain amendments have been foreshadowed and these will be debated today in the committee stage. I raise these specific matters because they concern me and the electors I represent. Mr O'KEEFE(Burke)(4.22) —I wish to make a brief contribution to the debate on the Television Licence Fees Amendment Bill (No. 3), the Radio Licence Fees Amendment Bill (No. 2) and the Broadcasting Amendment Bill (No. 4). I shall try to overlook the comments from the honourable member for Lyne (Mr Cowan). I hear this constant bleating to return to the days of darkness. The attitude is: `Let us keep no one informed; let none of our young people learn about things and prepare themselves a little better'. Honourable members opposite want to return to the philosophy of the National Party of Australia in the days when men were men and sheep were nervous. The honourable member also talked about the issue of FM licences and having to pay for them. We have just finished a matter of public importance debate on the question of ownership of public enterprises; yet we now hear bleats about the fact that the Government is broadening access to FM radio. It ought to be recognised that an FM radio licence, well operated, is in fact a licence to print money. FM radio stations are not run at a loss; they make substantial profits and of course the Government is entitled to draw revenue from making access available to the FM radio network. Over the last 18 months we have witnessed in Australia a substantial restructuring of commercial television, radio and print ownership, the development of truly national commercial television networks, the beginning of the introduction of new commercial television and FM radio services to country audiences-which for too long have been deprived of the services available in the major cities-and the continuing expansion of public radio and the two national broadcasters, the Australian Broadcasting Corporation and the Special Broadcasting Service. This is a very impressive and broad package. In my own electorate I see a number of public radio stations developing. One in particular is 3CCC, a very successful public radio station which is now playing a part in the production of programs to support the Australian made campaign for playing across the whole public radio network. I commend this move and congratulate that particular station on it. On the fringes of my country electorate we have seen new services introduced for both radio and television. This clearly marks a new era of communication, particularly for country people. I want to touch upon and perhaps explain one other aspect of the major thrust of the Government's media policy as it has unfurled. There has been a lot of confusion and in part a lot of misunderstanding about what has taken place in the shake-out in the media world in the last 12 months. I think the most important component of all that has happened, as well as the commercialisation of the media in this sense, has been the introduction of the cross-media bans. By that I mean that in Australia it is now not possible for the one organisation or entrepreneur to have control across the total range or spectrum of the media. I will give an example from my own experience of why this is of concern to me. In the mid-1970s I was an official of a trade union which at the time was involved in some industrial disputation. One television reporter who took an interest in these affairs dealt with our organisation unfairly. On that basis we indicated to the general manager of the station that we were not prepared to take any more television interviews from that interviewer. The general manager of the station said, `You will cop who I send down there'. We said, `No, we will not. If you send him you are not getting any interviews. We will just deal with the other stations'. He said, `If you do that you are not going on our radio station either, you are going to be cut out of our newspapers and your point of view will not be portrayed anywhere across our media network'. That involved radio, television and newspapers. That sort of approach was stuck to. As an organisation we did not cave in, but we had to find other ways to get information across to the public because we were barred from that particular media network for nearly three years. But in the end it decided to reinstate us, which was very good. That situation could not occur now. What happens now is that someone may own several television stations-an organisation may build up a network right around Australia in television and in doing so will take all the commercial advantages and economies of scale involved in networking, production and the whole television glad bag. Another organisation may well do the same thing in radio. Of course, we have seen the shake-out in the print media, where various organisations have bought in. But the end result is that under the cross-media bans it is no longer possible for any organisation to take ownership across the whole gamut. Therefore, there is an independence in the points of view being portrayed by the television, radio and print networks. It is my personal view that we will see emerge in Australia an increase in the quality of the print media in particular as Australia's education standards improve-and they are improving with the increasing retention rates of students at school and with better literacy. As people read more and rely more on the written word, we will see an increase in the quality of the print media across Australia. In fact, I believe that this has already taken place in Victoria. As the other media feed off the stories of the day as they are outlined in the papers in the morning, they too have a different direction and a different information base, as do the television stations. The most constructive result of this whole media shake-out that has taken place has been the ability to network around the country and to take advantage of the economies of scale. If a television production crew wants to set up in one of the capital cities and make programs that can be shown around Australia on an Australia-wide network, I see not problem in that. I see no problems in those sorts of production facilities being used to generate programs for export, as we are already seeing in sport, entertainment and documentary television. I believe that networking is a positive gain, and these advantages are to be seen not only in television but also in radio and newsprint. Most importantly, I welcome the changes introduced in this legislation which in effect will put in place cross-media bans. This will mean that the controls of which I spoke earlier will be removed from Australian media concentration. The Government has shown itself to be sensitive to the changing commercial, technical and social environment in which the various media operate. It is clear that the Government has been prepared to adapt to change and to introduce new policies to suit the circumstances. The Government has not been afraid to motivate that change in the directions that we believe best serve the needs and interests of Australians. These Bills are a further step in the Government's reform of the media industry. I have given a resume not only of these Bills but also of the legislation which preceded them in the past six months as we have enacted these media changes. I commend the earlier legislation as well as these Bills to the House. Mr WHITE(McPherson)(4.32) —I wish to take a few minutes to support some of the Opposition's criticisms of the Television Licence Fees Amendment Bill (No. 3), the Radio Licence Fees Amendment Bill (No. 2) and the Broadcasting Amendment Bill (No. 4). I wish to support the amendments which will shortly be moved by the honourable member for Richmond (Mr Blunt). There are two particular aspects with which I wish to deal. One concerns the FM licences on the Gold Coast and in other areas, four of them in total. These licences have been promised by this Government for four or five years. Although there has been promise after promise, the licences have not come to fruition. Eventually submissions were called for and 20-odd consortia on the Gold Coast spent hundreds of thousands of dollars preparing submissions to be considered by the Australian Broadcasting Tribunal for a new licence in that area. I suspect that the Minister for Transport and Communications (Senator Gareth Evans) got up one morning with a bright idea and said, `No, we will change all that. We will auction off the licences'. The industry having spent hundreds of thousands of dollars preparing submissions under one set of rules for consideration by the Tribunal based largely on local content, the Minister declared all that to be null and void and said, `No, we will auction them off'. Then, six weeks or so later, under pressure from his own Party and from the industry, the Minister said, `No, we will have another go at it. We will introduce a system called an establishment fee'. Within the space of a few weeks the consortia, which had worked hard under a different set of rules to put together proposals to establish the new station in my area of Shepparton and Geelong, suddenly had to change again. They had to reconsider their submissions on the basis that it would be decided by the Tribunal once again with the payment of an establishment fee. I want to record that I believe, as do many thousands of Australians who have taken an interest in this matter, that that is not a good enough way to conduct business. The industry outside is saying, `What will Senator Evans think of tomorrow? What other bright ideas will he have when he gets out of bed? Will he change it all again?'. When the consortia have spent that amount of money under a certain set of rules, surely they should be entitled to expect their submissions to be dealt with under those rules. My colleague the honourable member for Richmond will shortly move an amendment to exempt from the establishment fee the Gold Coast, Geelong, Gosford and Shepparton, the four FM stations in question. The proposal is that the granting of those four new stations should be decided by the Tribunal on the basis of the old rules under which the consortia had spent so much money in preparing their submissions for consideration. We believe that is fair and just. I hope that the Minister for Land Transport and Infrastructure Support (Mr Duncan) will consider our proposal which is put forward in a genuine attempt to bring some fairness into the system for those four stations. We are not convinced that the conversion fee, which will also be legislated for by these Bills, is fair. Other members have also referred to this aspect of this legislation. The 1987 Budget announced that a conversion fee of 30 per cent of the annual gross earnings would be charged if stations wished to convert from AM to FM. Suddenly, the Minister for Transport and Communications had another idea in the middle of the night and he bumped the figure to 50 per cent because the Government is desperate for money. Instead of grasping every dollar it can get, the Government might consider cutting its expenses and its spending. The Opposition does not believe the conversion fee is fair. Most of the stations, particularly those in my area, will choose to convert because they will find it difficult to compete with the new FM stations when they get their licences. We do not believe that 50 per cent of annual gross earnings of a company which is running a radio station and wishes to convert to FM is in any way an equitable way to go about raising revenue for running the broadcasting industry. For those two reasons I strongly support the amendments which will be moved by the Opposition and the criticism which has already been levelled at this legislation. Mr DUNCAN(Makin-Minister for Land Transport and Infrastructure Support)(4.37) —I wish to thank all honourable members for their contributions to the second reading debate on the Television Licence Fees Amendment Bill (No. 3) and cognate Bills, some of which comments I thought were very worth while. I apologise to the House for the fact that, because of illness, I was unable to be here for significant parts of the debate. Having now shaken off the flu, I am pleased to be back again in the House. In summing up on this legislation, I wish to refer to a number of matters which were reported in Hansard. A couple of points raised by Opposition spokesmen I thought were somewhat unfair. The Government was criticised for capitulation on the tendering proposals which had been announced as part of the Budget process and it was accused of making policy on the run. I am sure that honourable members and all members of the community appreciate that in the Budget context it is not possible to consult in advance. The Budget must be produced in confidence. Accordingly, at that time we put together a proposal which we thought was appropriate. Following the announcement in the Budget, the matter was the subject of wide consultations. The Government can be proud that it has shown itself prepared to consult widely and compromise in recognising the legitimate concerns about the implications of the tendering process. Clearly it is impossible to consult in advance in the context of the Budget. I make no apology for the fact that subsequently, after a series of consultations, we amended the proposals drafted at Budget time. Another matter which has been the subject of some concern and which has been raised in this debate relates to the payment period. As Opposition members will know, the Government intends to move an amendment which will assist. Mr Blunt —We do not know. I have not been advised. Mr DUNCAN —I apologise to the honourable member. I thought that the Government amendment had been circulated. The Government intends at the committee stage to move an amendment recognising the possible difficulties relating to the payment period and the 28-day period allowed for appeals to the Federal Court of Australia. The amendment should overcome that problem. We believe that it is inappropriate for the period to be extended to the date of grant or beyond. Honourable members will see that the amendment makes the provision I have foreshadowed. Concern was expressed by Opposition members about the effect of the establishment fee on the assessment of the Australian Broadcasting Tribunal (ABT) of the financial capacity of particular individuals. Some applicants have publicly argued that the additional capital cost of an establishment fee will cause the Tribunal to find that a new competing licence is not viable and that a supplementary licence should be awarded instead to the incumbent licensee. There is some evidence that incumbents will seek to argue this before the ABT. It is fair to say, though, that the ABT, in reaching its decisions, will base them on a number of factors which it will take into account when assessing the financial capacity of applicants. It is up to the applicants to provide evidence to the Tribunal that they can satisfactorily meet the obligations imposed by the new fee. There was also some reference to AM-FM conversion and the alleged lack of government policy on this matter. The Government has announced its policy on conversion in solus market regional areas only at this stage and is still considering its policy on conversion in other areas. The Opposition, which has criticised our policy-making as too rapid in relation to new fees, is now claiming that we are not making policy rapidly enough on metropolitan conversions. As with other matters, the Government will make its decision once it has properly considered all the relevant issues. On the subject of the relationship between the AM-FM conversion fee and the establishment fee, the Opposition was critical both of the change from 30 per cent of current revenue announced in the Budget to 50 per cent in this legislation and of alleged inequities within the fees payable by the new licensees. The scheme in the Bills represents a different package from that announced in the Budget. In devising an alternative to the tendering scheme, the Government needed to reconsider all aspects of the new financial arrangements, not just those which had been criticised. The 50 per cent of the establishment fee which will be charged to new licensees reflects the fact that the new licensee is acquiring a new right to broadcast in addition to the new FM frequency. The incumbent is only supplementing an existing right to broadcast with a new FM frequency. The Opposition has foreshadowed two second reading amendments and a motion for the suspension of Standing Orders. I am sure that honourable members will appreciate that it follows from my comments so far that the Government will not be supporting any of the Opposition's proposed second reading amendments, nor its motion to have these Bills referred to the Standing Committee on Transport, Communications and Infrastructure. The Opposition, in its proposed amendments, makes much of its concern for localism and the representation of local interests in the ownership of licences. It is precisely the Government's concern to maintain competition between applicants on the basis of quality of service which was one of the main reasons for replacing the tender system with the establishment fees. Establishment fees were proposed by local applicants concerned that they would be unable to compete with existing players under the tender system. The Opposition, on my reading of Hansard, has failed at any stage to address the central issue of deriving a reasonable return from the commercial use of this very important public resource. It is the Government which, in confronting the tough economic realities-as the Opposition is so quick to demand-has made the tough compromise which will ensure that a fair return is derived while retaining a commitment to the critical public interest in broadcasting services. It is absurd to suggest that the Government has not considered all the possible options for revenue raising, both in developing the tender proposal and in refining the establishment fee scheme. The Government has considered every conceivable permutation. The scheme incorporated in the Bills represents the best outcome which could be obtained when balancing all the conflicting demands and interests. The House should be congratulating the Government on the way it has brought forward these Bills, which are designed to introduce a fair and equitable scheme to ensure that this important public resource is properly paid for and that the community gets a fair return for the use of this scarce resource-the airwaves. Amendment negatived. Original question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Duncan) read a third time. Debate resumed from 28 October, on motion by Mr Duncan: That the Bill be now read a second time. Amendment (by Mr Blunt) proposed: That all words after `That' be omitted with a view to substituting the following words: `whilst not declining to give the Bill a second reading, the House condemns the Government for its decision to increase the fee for the conversion of AM to FM broadcasting from the level announced in the 1987-88 Budget, that is, 30% of the converting station's annual gross earnings, to 50% of annual gross earnings, which will impose an additional cost burden on licensees in regional areas wishing to convert to the FM frequency'. Mr Carlton-I second the amendment. Amendment negatived. Original question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Duncan) read a third time. Debate resumed from 28 October, on motion by Mr Duncan: That the Bill be now read a second time. Amendment (by Mr Blunt) proposed: That all words after `That' be omitted with a view to substituting the following words: `whilst not declining to give the Bill a second reading, the House notes with concern the ad hoc approach the Government has adopted concerning recent changes to broadcasting policy which is exemplified by: (1) the decision to dump the proposal to auction new broadcasting licences only 6 weeks after the proposal was announced, (2) the decision to implement an establishment fee system for new FM radio licences which will: (a) seriously disadvantage local or community groups from obtaining the new radio licences in regional markets, (b) result in a reduction in the competitiveness and diversity of radio services to listeners in regional markets, (c) have a particularly deleterious effect on those applicants currently being assessed by the Australian Broadcasting Tribunal for the radio licences in Geelong, Gosford, the Gold Coast and Shepparton, and (d) lead to widespread uncertainty in the broadcasting industry about possible future changes to broadcasting policy, and (3) the Government's failure to consider fully possible alternatives to the establishment fee system and to consult with the radio broadcasting industry'. Mr DEPUTY SPEAKER(Mr Ronald Edwards) —Is the amendment seconded? Mr Carlton-I second the amendment. Amendment negatived. Original question resolved in the affirmative. Bill read a second time. Mr BLUNT(Richmond)(4.51) —I move- That so much of the standing orders be suspended as would prevent the Member for Richmond from moving- That the Bill be referred to the Standing Committee on Transport, Communications and Infrastructure, for inquiry and report as soon as possible, with particular reference to: (1) consideration of the effect of the Government's proposed `establishment fee' system on the ability of local or community interest groups to compete for radio licences in regional markets; (2) examination of the equity of applying the establishment fee system to those licences for which applications have been received by the Australian Broadcasting Tribunal; (3) consideration of the practical limitations of the establishment fee system and the effect it may have on the future development of radio broadcasting services throughout Australia; and (4) examination of possible alternatives to the establishment fee system in view of: (a) the desirability of formulating an appropriate return to the Commonwealth for the use of the radio frequency spectrum which takes account of, amongst other things, the public interest; and (b) the need to ensure that existing objectives of radio broadcasting, including the provision of competitive and diverse radio services and the responsiveness of these services to local needs, are not compromised. Mr DEPUTY SPEAKER —Is the motion seconded? Mr Carlton —I second the motion. Mr BLUNT —The Opposition is extremely concerned that, despite the explanation of the Minister for Land Transport and Infrastructure Support (Mr Duncan), in his summing up of the second reading debate, the Government has not seriously considered the implications of its decisions in this area. For that reason, the Opposition has moved this motion to allow a standing committee of this chamber to consider the policy that would be appropriate for the Government to introduce to protect the public interest and to ensure that radio in Australia is operating within a policy framework in which it has confidence in the future. The history of this particular policy development is nothing short of a debacle. For some years now, community groups in Australia have been preparing applications for licences on the basis of community interest. They were told that they should prepare applications for submission to the Australian Broadcasting Tribunal that stressed the basis on which they could effectively represent the community. No suggestion was made that there would be a sale or tender of those licences at any stage. But at some point the Government decided that it needed the revenue from the licences that were to be allocated, so in the Budget a decision was made to have an auction. The Opposition acknowledges that decision and that is why we believe it is important to give rational consideration to this issue. Radio is a public good; it has an economic value. There is a need for the Australian community to receive a return on that good. There is no argument or doubt about that. The honourable member for Charlton (Mr Robert Brown) is nodding his head. I wonder whether he will keep nodding his head when I make the point that the return the Government is extracting from one point on the FM frequency is different from the return it is extracting from another point; because if one is seeking a new licence one has to pay one amount, and if one is converting to an AM licence from an FM licence one pays another amount. They are two equal spots on the FM frequency with different prices. I should like to hear the Government explain the rationale behind the two different pricing mechanisms for the one good. That is why it is appropriate to hold a public inquiry into this particular mechanism. Mr Robert Brown —Ha, ha! Mr BLUNT —The honourable member for Charlton is laughing. Obviously honourable members opposite cannot do this in Caucus. That is why the Opposition has proposed this motion in the Parliament-to give them a chance to vote to refer this matter to a committee. The Government has set up a committee which is charged with the responsibility of examining transport, communications and infrastructure policy in Australia. The Government has demonstrated that its only policy is based on consultation with its mates. I know that is a gross embarrassment to many honourable members opposite. In fact, some Ministers have been prompted to say that the degree of consultation that goes on between some very high profile members and Ministers of the Government and some very high profile high rollers in our community is an embarrassment. I am tempted to suggest that it may not be beyond the realms of possibility that this Government's broadcasting policy is developed on board a fishing boat or in a similar venue with the advice of active participants in the industry. I am also concerned that no commitment seems to be made to the policy debate in this area in the Parliament. In recent months hundreds of millions of dollars have been committed by various commercial organisations to particular lines of action. Various groups of radio stations have been purchased, in contravention of the existing law and the stated policy of the Government at that time. Hundreds of millions of dollars have been spent in contravention of those two things: the existing laws of the country and the stated policy intentions of the Government. When people have been asked about their confidence in the spending of vast amounts of money in acquiring new radio stations, they have said things such as, `We are sure it will be right', or `I am given to understand that this will be okay'. That indicates that those involved have been given the nod in much the same way as Mr Bob Rogers was given the nod by a Minister in terms of the contract for World Expo 88. That is the way the Government conducts business and formulates its policies-on the basis of the nod. That is the great Labor fix. The Australian Labor Party does things in the back room where a group works out what will happen. The matter then goes to Caucus and the right wing steamrolls the Left. The Left says that it is the group of principle but that, as it does not have the numbers, it will go quietly on this issue. Lo and behold, what the operators say in fact happens-it is right. After the purchases in contravention of policy, the Government announces a change of policy. That is just not good enough. We are talking about something that is owned by the Australian people. They are the people who own radio frequencies. It is not up to this Government which is only a temporary government, to make determinations as to how a long term and continuing public asset will be allocated in this community. If the Government had any sense of responsibility or any real understanding of what it was doing, and if honourable members on its back bench had any courage, they would not have let the broadcasting and communications policy develop the way it has. Let us face it: those on the Government back benches have been rolled. They have been steamrolled, taken for granted, manipulated and embarrassed by the ruling elite of the Labor Party right wing. That is what has happened to them and it is about time that came to an end. It is about time this issue was dragged out of the smoke-filled rooms, off the fishing boats, out of the executive jets and away from the lunch tables and brought into Parliament. A public inquiry should be held into how this whole issue should be administered by a responsible government. But no, the Government has made no commitment to that. The Minister in his summing up said that the Government had considered every possible permutation and option. If that is the case, I challenge the Minister to table the papers that discuss every possible permutation and option, which I do not believe have been seriously considered. I do not believe the Minister would be game to put those papers on the table in this place, because the Australian community might be horrified at the options which exist and which have been ignored by the Government. This matter is of grave concern in the electorate. Most responsible honourable members know exactly how the community feels about this Government's communications policy. Members of the Government are embarrassed and have scuttled away. Looking around the chamber, I see on the Government side only one member of the Left and two backbenchers. Mr Saunderson —Where are they? Mr BLUNT —Have I mistagged someone? I also see one Minister. We have four people from the Government side in the chamber for this important debate. No wonder most are out of the place; they are embarrassed. Honourable members opposite will get an opportunity to show their mettle because we will divide on this particular proposal. It is important and some people of principle may have a twinge of conscience when they vote to gag this motion because they know-- Mr Scholes —You would not even know what the word meant; you've got none. Mr BLUNT —We hear the vociferous interjections coming from the back bench. The honourable member making those interjections also happens to know that this Government's policy on communications is an embarrassment, a disgrace and ad hockery. It is a classic example of mateship. The Minister for Transport and Communications (Senator Gareth Evans) in the other place has been aptly described as the Minister for mates, because only a Minister for mates would allow someone to go ahead and spend a couple of hundred million dollars on the basis of a nod and then fix the policy later. That is the way this Government is running its communications and broadcast policy, and it is just not good enough. It is for that reason that we think it is appropriate to take this whole question to a standing committee for public inquiry. Dr HARRY EDWARDS(Berowra)(5.01) —I believe that, as my colleague has said, it is extremely important that this matter be referred to the House of Representatives Standing Committee on Transport, Communications and Infrastructure. After all, the Government came out on Budget night, 15 September, with one proposal, and just a matter of a couple of weeks later abandoned it. Perhaps it came to see that there was very little to be said for the first proposal. It then came out with the second proposal for the so-called establishment fee. That was looked at and decided on within a matter of a couple of weeks. We were told by the Minister for Transport and Communications (Senator Gareth Evans) that the Government looked carefully at every possible combination and permutation of these arrangements. Yet how that could be feasible within the short period in which the Government came up with this suggestion I do not know. I believe that honourable members on this side of the House have put very compelling arguments against the establishment fee, as it is called. Its impact on the quality of programs that might be provided particularly by small regional groups was stressed, as were the effect it would have in permitting only those with large capital resources to get established, and on concentration of the industry, and so on. Whether auction or establishment fee, certainly neither of these proposals should be applied to the four situations of the Gold Coast, Gosford, Geelong and Shepparton, where people have formulated proposals and spent hundreds of thousands of dollars under one set of rules and are now being obliged to apply under a different set of rules. I think this House realises that the media is not just another business. In fact, freedom of speech, the availability of information and diversity of opinion are social values of great importance to our Australian democracy. The media play a unique role in this, and are thus not simply a business activity. The media are very important in forming the values, attitudes and opinions of the Australian people. Therefore the Australian people should be entitled to know just what is happening in terms of the establishment of the television stations, and the radio stations that are to operate, and the implications of all that in recent times for the newspapers. I draw particular attention to the speech of my colleague the honourable member for Menzies (Mr N.A. Brown) in this place just before the recent recess. I would think, in light of that speech and other things that have been said by my other colleague, that in point of fact the Government would welcome an opportunity for an inquiry. Mr Saunderson —It was a scurrilous speech. Dr HARRY EDWARDS —Well, the Government should welcome the opportunity to refute the charges that the honourable member for Menzies made, if they were false. He drew attention to the fact that Wesgo Communications Pty Ltd paid the sum of $70m for the additional eight stations owned by Amalgamated Wireless (Australasia) Ltd on the very day that the Minister announced that the limit to the number of stations could be raised from eight to 16. Was it possible on that very day for Wesgo to have assessed the situation, made all the inquiries and so on? It turns out, on an examination of the shareholdings that Wesgo is virtually owned by the Australian Labor Party. Mr Saunderson —Scurrilous. Dr HARRY EDWARDS —If the honourable member denies this, here is an opportunity for the Government to refute it. In the context of a full and proper inquiry we might be able to get some answers to the questions that have been raised. We have a situation in this area of the media where a great deal has been done by this Government for its rich and powerful friends, but very little for the consumers of the Australian media. Mr DEPUTY SPEAKER —Order! The honourable member's time has expired. Mr DUNCAN(Makin-Minister for Land Transport and Infrastructure Support)(5.06) —I just want to take a few minutes to tell the House and the Australian people why the Government does not intend to support the suspension of Standing Orders to refer this matter to a committee. Mr Braithwaite —You are running scared. Mr DUNCAN —We are not doing any such thing. The Government quite clearly wants to get this legislation passed for the very worthwhile reason that this reform is long overdue. The Opposition cannot have it both ways. Honourable members will remember only too well the situation that occurred in Western Australia. An applicant for a television licence obtained the licence and then proceeded to sell it before that television station went on air at all for the nice little tidy capital profit sum of approximately $39m or $40m. When that situation became apparent it was obvious that the Government, acting responsibly, should take steps to ensure that such a thing could not happen again. We did not want to be confronted with the situation of one of the licences that is to be made available and has been announced as part of the program for regional FM radio-the Gold Coast licence or any other licence-being issued to an applicant and sold in similar circumstances to those in relation to the Western Australian television licence. So we have chosen to put this legislation before the Parliament to ensure that windfall profits similar to those made in the west in relation to that television station application cannot be made to the same extent in relation to future applications for radio licences. The suggestion that this matter should be referred to a committee is simply a ruse to delay the matter. It it were to be delayed the effect quite possibly would be-apart from the fact that the Government would lose approximately $16.5m in revenue this financial year, since the delays would probably prevent the legislation being passed until after the Australian Broadcasting Tribunal's decisions were taken on the licences already called for-to place the Australian public in the situation of there being a real danger that one of these applicants would obtain a licence and then flog it off. We do not want to see that happen, and I am sure that the Australian people would not want to see it happen. The idea of these sorts of windfall profits occurring is repugnant to all decent citizens. People do not want to see public assets such as the air waves used to make huge windfall profits. That is what the Government, by the passage of the Broadcasting Amendment Bill (No. 4) 1987, intends to ensure does not happen. The referring of the Bill to a committee would, in essence, amount to a back door method of exempting those first four markets, which would, of course, put them in a most inequitable advantageous situation over other licences for which applications have yet to be called. The issue covered by the Opposition's motion-which is localism, competition and diversity in commercial radio, and the appropriateness of the return to the Commonwealth for the use of the radio frequency spectrum-has already been canvassed exhaustively in the debate that has already occurred. In those circumstances I move: That the question be now put. Question put. The House divided. (Mr Deputy Speaker Mr Ronald Edwards) Ayes . . . . . . . . . . . 76 Noes . . . . . . . . . . . 53 —— Majority . . . . . . . . . 23 —— Baldwin, P. J. Jakobsen, C. A.Beddall, D. P. Jenkins, H. A.Bilney, G. N. Johns, G. T.Blanchard, C. A. Jones, BarryBlewett, N. Kelly, R. J.Bowen, Lionel Kent, L.Brown, John Kerr, D. J. C.Brown, Robert Lamb, A. H. (Teller)Brumby, J. M. Langmore, J. V.Campbell, G. Lavarch, M. H.Charles, D. E. Lee, M. J.Charlesworth, R. I. Lindsay, E. J.Chynoweth, R. L. McHugh, J.Courtice, B. W. McLeay, LeoCrawford, M. C. Martin, S. P.Cross, M. D. Mildren, J. B.Cunningham, B. T. (Teller) Milton, P.Darling, E. E. Morris, AllanDawkins, J. S. Morris, PeterDubois, S. C. Mountford, J. G.Duffy, M. J. O'Keefe, N. P.Duncan, P. O'Neil, L. R. T.Fatin, W. F. Price, L. R. S.Fitzgibbon, E. J. Punch, G. F.Free, R. V. Saunderson, J.Gayler, J. Scholes, G. G. D.Gear, G. Sciacca, C.Gorman, R. N. J. Scott, J. L.Grace, E. L. Simmons, D. W.Griffiths, A. G. Snow, J. H.Hand, G. L. Snowdon, W. E.Harvey, E. R. Staples, P. R.Hayden, W. G. Theophanous, A. C.Holding, A. C. Tickner, R. E.Hollis, C. West, S. J.Howe, B. L. Willis, R.Humphreys, B. C. Wright, K. W.Hurford, C. J. Young, M. J. Adermann, A. E. Jull, D. F.Aldred, K. J. McArthur, F. S.Andrew, J. N. (Teller) McGauran, P. J.Beale, J. H. McVeigh, D. T.Blunt, C. W. Macphee, I. M.Braithwaite, R. A. Miles, C. G.Brown, N. A. Millar, P. C.Burr, M. A. Moore, J. C.Cadman, A. G. Nehl, G. B.Cameron, Donald Peacock, A. S.Cameron, Ewen Porter, J. R.Cameron, Ian Prosser, G. D.Carlton, J. J. Reith, P. K.Cobb, M. R. Robinson, IanCowan, D. B. Rocher, A. C.Dobie, J. D. M. Ruddock, P. M.Downer, A. J. G. Shack, P. D.Edwards, Harry Shipton, R. F.Fife, W. C. Sinclair, I. McC.Fischer, Tim Smith, W. L.Fisher, Peter Spender, J. M.Hall, Steele Sullivan, K. J.Halverson, R. G. White, P. N. D.Hawker, D. P. M. Wilson, I. B. C.Hewson, J. R. Woods, R. L.Hicks, N. J. (Teller) Wooldridge, M. R. L.Hunt R. J. D. Kerin, J. C. MacKellar, M. J. R.Beazley, K. C. Webster, A. P. Question so resolved in the affirmative. Original question put: That the motion (Mr Blunt's) be agreed to. The House divided. (Mr Deputy Speaker-Mr Ronald Edwards) Ayes . . . . . . . . . . . 53 Noes . . . . . . . . . . . 76 —— Majority . . . . . . . . . 23 —— Adermann, A.E. Jull, D. F.Aldred, K. J. McArthur, F. S.Andrew, J. N. (Teller) McGauran, P. J.Beale, J. H. McVeigh, D. T.Blunt, C. W. Macphee, I. M.Braithwaite, R. A. Miles, C. G.Brown, N. A. Millar, P. C.Burr, M. A. Moore, J. C.Cadman, A. G. Nehl, G. B.Cameron, Donald Peacock, A. S.Cameron, Ewen Porter, J. R.Cameron, Ian Prosser, G. D.Carlton, J. J. Reith, P. K.Cobb, M. R. Robinson, IanCohen, B. Rocher, A. C.Dobie, J. D. M. Ruddock, P. M.Downer, A. J. G. Shack, P. D.Edwards, Harry Shipton, R. F.Fife, W. C. Sinclair, I. McC.Fischer, Tim Smith, W. L.Fisher, Peter Spender, J. M.Hall, Steele Sullivan, K. J.Halverson, R. G. White, P. N. D.Hawker, D. P. M. Wilson, I. B. C.Hewson, J. R. Woods, R. L.Hicks, N. J. (Teller) Wooldridge, M. R. L.Hunt, R. J. D. Baldwin, P. J. Jakobsen, C. A.Beddall, D. P. Jenkins, H. A.Bilney, G. N. Johns, G. T.Blanchard, C. A. Jones, BarryBlewett, N. Kelly, R. J.Bowen, Lionel Kent, L.Brown, John Kerr, D. J. C.Brown, Robert Lamb, A. H. (Teller)Brumby, J. M. Langmore, J. V.Campbell, G. Lavarch, M. H.Charles, D. E. Lee, M. J.Charlesworth, R. I. Lindsay, E. J.Chynoweth, R. L. McHugh, J.Courtice, B. W. McLeay, LeoCrawford, M. C. Martin, S. P.Cross, M. D. Mildren, J. B.Cunningham, B. T. (Teller) Milton, P.Darling, E. E. Morris, AllanDawkins, J. S. Morris, PeterDubois, S. C. Mountford, J. G.Duffy, M. J. O'Keefe, N. P.Duncan, P. O'Neil, L. R. T.Fatin, W. F. Price, L. R. S.Fitzgibbon, E. J. Punch, G. F.Free, R. V. Saunderson, J.Gayler, J. Scholes, G. G. D.Gear, G. Sciacca, C.Gorman, R. N. J. Scott, J. L.Grace, E. L. Simmons, D. W.Griffiths, A. G. Snow, J. H.Hand, G. L. Snowdon, W. E.Harvey, E. R. Staples, P. R.Hayden, W. G. Theophanous, A. C.Holding, A. C. Tickner, R. E.Hollis, C. West, S. J.Howe, B. L. Willis, R.Humphreys, B. C. Wright, K. W.Hurford, C. J. Young, M. J. MacKellar, M. J. R. Kerin, J. C.Webster, A. P. Beazley, K. C. In division- Mr Scholes-Mr Deputy Speaker, I raise a point of order. As the carriage of this motion would have significant financial benefit for certain persons, is it necessary for members supporting the suspension of Standing Orders to declare a financial interest if they have one? Mr DEPUTY SPEAKER (Mr Ronald Edwards)-The honourable member for Corio has asked a question about financial interests. The requirements of the House are that members declare their interests in a statement to the House. It would be clear that members have made a general statement that is available to other honourable members on request. I am advised that if, at the conclusion of the division, any honourable members have a financial interest which this motion may impact upon, they ought to declare that financial interest. Mr Robert Brown-Mr Deputy Speaker, I raise a point of order. My understanding of the application of that personal interest rule is that when the Parliament is considering matters of public policy there is no necessity for members to declare a personal interest. If, for example, the Parliament were now in the process of considering legislation which could affect a particular named and identified radio station anyone with an interest in it would be required to declare that interest. However, at the present time we are considering public policy. The Parliament is now in the process of considering whether this matter should be referred to a committee of the Parliament. There is no way in which this question could reasonably be interpreted as being one which would impinge directly on the pecuniary interest of any member of the Parliament. Mr Sinclair-Mr Deputy Speaker, I raise a point of order. A procedural motion for the suspension of Standing Orders has been moved. Until such stage as the suspension of Standing Orders is dealt with, no question of public policy arises nor is there any issue before this House on which any member can be seen as having a pecuniary interest. I suggest that we get on with the vote and that we all get back to our ordinary affairs. Mr DEPUTY SPEAKER-Order! I return to the previous point that I made. As a consequence of members tabling in this House their statements of interests, if any honourable members felt that the decisions they made in relation to this motion were contingent upon those statements, they may feel it necessary to declare that interest. In the absence of that I see no need to take any further action. Mr Hunt-Mr Deputy Speaker, I raise a point of order. Mr DEPUTY SPEAKER-Order! I will accept no further points of order. Question so resolved in the negative. In Committee Clauses 1 and 2-by leave-taken together, and agreed to. Clause 3 (Amount of fees). Mr BLUNT(Richmond)(5.30) —I move: Clause 3, page 1, line 12, proposed subsection 82aa (1), omit ``1 March 1987'', substitute ``28 October 1987''. The Opposition's amendment to clause 3 is to redress an injustice. The Government's amendments to clause 4 are also to redress an injustice drawn to its attention by the Opposition, and I am pleased to see that the Government is moving on it. The Opposition's amendment to clause 3 is to exempt those applicants for licences on the Gold Coast, Gosford, Shepparton and Geelong from the payment of licence fees. The Government has been in a state of total confusion over the way it would allocate new licences in this area. Before the Minister for Land Transport and Infrastructure Support (Mr Duncan) rises to plead that this is an economic good and a public good and that there is a need to extract some return from it, let me remind honourable members that it has been that sort of good for the entire period the Government has been in office. Suddenly, because someone sold a television licence in Perth, the Government decided something needed to be done about it. That is not good enough. The Government has been around for nearly five years. It does not say much for the mental capacity of the previous Ministers who have been responsible for this portfolio that it is only now that the Government has realised that it is valuable good and something must be done about it. The most important thing is that the impact of clause 3 is retrospective because a large number of people have spent of hundreds of thousands of dollars preparing applications for licences on the basis that there would not be a fee and there would not be a tender process. It is for that reason that those four particular areas should be exempted from the Government's provisions. That is why the Opposition has moved in that direction. Before a Government member says that we are about to hand out a good of considerable value without charging for it, I remind the Government that that was exactly its intention until the time of the last Budget when, in order to achieve a so-called balanced Budget, the Government decided it could raise some revenue from this area. Its commitment to the way the revenue will be raised is not long standing and is quite ephemeral. In the Budget, the Government proposed an auction and, about six weeks later, it proposed an establishment fee. It boils down to this: the Government decided that it must raise revenue; it thought of one option that it thought would raise money, but that was totally unacceptable, and it had to move in another direction which is not intrinsicly good in itself. I have not heard any argument that that the proposed mechanism is better than the auction mechanism or that the auction mechanism was unacceptable for one particular reason. It is simply a matter of raising revenue, and that is why the Government has changed the conversion fee mechanism to compensate, to some extent, for the shortfall of revenue that will arise because of its change of heart. The other issue particularly relevant to this clause is what can be described only as a major transgression in confidentiality and ministerial responsibility. In discussing the question of new licence fees, the Minister sought information from the Australian Broadcasting Tribunal (ABT) about the licence fees and revenues paid by existing operators in the relevant areas. On the basis that the Minister sought that information, he gave an undertaking that it would not be made public. In a recent press release, the Minister disclosed the revenues and the licence fees paid by the existing operators in those four markets. That is a complete breach of faith with the Minister's undertaking given in writing to the Chairman of the Australian Broadcasting Tribunal. It is commercial sabotage of the existing operators in those regions, and it undermines the entire application process for the four regions. I would be very interested in the Minister's comments-the mate of the Minister for mates-about the breach in confidentiality and the impact it will have on the confidence of the industry in providing sensitive commercial material to the ABT or to the Government, the Minister or his Department generally. It is a serious issue. In his second reading speech, the Minister made no reference to it. I expect there should be some comment on it from the Government. It is a breach of faith; as I said, it is commercial sabotage and completely undermines any claims the Government has for the commercial operation of this clause. It is for that reason that the Opposition believes it is appropriate to eliminate the retrospective implications of this measure. There are many applicants for licences in the four areas, and the applications have been delayed unnecessarily. The Gold Coast should have had extra radio licences allocated to it years ago. The Government cannot plead anything but its own ineptitude and failure to address the question and come to a decision in this. The applications have been made for some time. The demand and need for a licence in the Gold Coast area and the other rapidly growing areas are obvious. Gosford, the central coast of New South Wales, as the honourable member for Charlton (Mr Robert Brown) would know, is an area with a rapidly growing population and is in desperate need of another licence. The honourable member for Dobell (Mr Lee), who probably listens to the existing station in the area-that is no reflection on that station-also recognises the need for additional resources in that area, notwithstanding the needs in Geelong or Shepparton. The Opposition believes the awards of licences in those areas should be expedited and that the awards should be equitable and should not disadvantage anyone who made applications based on the Government's initial policy in this area and its initial indications to the applicants. Localism and community of interest should be served. Because of its ineptitude in failing to recognise for four years that these licences had a considerable commercial value, the Government should not retrospectively seek to extract money from the applicants. There are other ways of addressing the question of holding the licence. Prohibitions can be introduced to prevent a transfer. After all, transfers must go through the ABT. I do not believe the Government has seriously considered other ways of achieving its goal of licence holder stability or the prevention of realising windfall gains from this. The Government has been preoccupied with maximising its revenue when it should be preoccupied with maximising its services and the diversity of radio programming available to communities in those areas. The Opposition believes its amendment to clause 3 will best serve the interests of the communities in those areas. It will provide an equitable basis for the application of those licences to the existing applicants on the terms on which they made their initial applications and spent considerable amounts of money. The amendment will ensure that local interests are preserved and that the question of being able to buy one's way into Australian radio-notwithstanding the public desirability of that-is served. The Government's proposal disadvantages local groups which do not have access to large lumps of capital or ready lines of credit but which may be capable of providing the best local radio service and the greatest diversity of service available to those communities. The Opposition believes the amendment will teach the Government the lesson that it should seriously think about its communications policy all the time and not put serious questions of considerable moment to the Australian community on the back burner. The Government has had since March 1983 to address this issue. It has not come down with anything like a definitive policy. I am not convinced that what it is currently doing is definitive. The Government will move some amendments, and it has still not come up with a policy for FM conversion in metropolitan areas. That indicates the superficial nature of the Government's policy, and for that reason I moved the amendment. Mr DUNCAN(Makin-Minister for Land Transport and Infrastructure Support)(5.39) —Because most of these issues have been canvassed during the second reading debate and other parts of the debate, I shall briefly make two points: firstly, the Opposition is again seeking, by a back door method effectively, to exempt the first four markets from the application of this fee. Secondly, whilst this is a Budget measure and this matter is important in the Budget context, I would like to point out to the House that the establishment fees for the four markets that it is proposed to exempt by this amendment add up to approximately $11m. That is not a make or break figure, I suggest, in the context of the whole Budget. Nonetheless, it is an important amount. I raise this matter simply to make the point that the real reason why the Government feels obliged to apply the fee to the first of the four new licences in the Gold Coast, Gosford, Geelong and Shepparton areas is to ensure that they do not have an inequitable advantage over other licensees for yet to be called licences for stations. It is for that reason that we believe that if there is to be an establishment fee, which we strongly believe is a fair and reasonable thing to apply, it should apply to all new commercial radio licences to be issued from now on. For that reason, I oppose the amendment that has been moved by the honourable member. Amendment negatived. Clause agreed to. Clause 4 (Interpretation). Mr DUNCAN(Makin-Minister for Land Transport and Infrastructure Support)(5.41) —I move: Clause 4, page 6, lines 20 to 22, omit the definition of ``relevant period'' from proposed subsection (11), insert the following definitions: `` `relevant period', in relation to an applicant who is given notice under paragraph (10) (a) or (c), means: (a) the period of 60 days commencing on the day on which the notice is given; or (b) if, before the end of that period, legal proceedings are commenced to challenge the giving of the notice or to prevent the granting of the licence to the applicant-the period of 30 days commencing on the day after the termination of all such proceedings (whether commenced before or after the end of the period referred to in paragraph (a)); `termination' includes termination by way of withdrawal or final determination and, when used in relation to legal proceedings, includes the termination of any appeal arising out of those proceedings.'.''. The amendment extends the period for payment of the establishment fee from 30 days to 60 days after the day on which the Australian Broadcasting Tribunal notifies the successful applicant of his selection or such longer period as is required to resolve legal proceedings arising out of the Tribunal's decision on the most suitable applicant. The amendment will ensure that where proceedings are commenced to challenge the Tribunal's decision or to prevent the grant of the licence, the successful applicant will not be required to pay the fee until those proceedings and any appeals arising out of them have been resolved. The Government is seeking to make this amendment because as the debate has unfolded it has become apparent that it is desirable. It shows the flexibility of this Government in seeking to legislate in the best possible way in the interests of all Australians. We have had it pointed out to us that it was desirable to amend the legislation. We have agreed to do that. The Minister for Transport and Communications (Senator Gareth Evans) should be congratulated on having the flexibility to pick up matters which are brought to his attention in the appropriate fashion. Mr BLUNT(Richmond)(5.44) —I recognise the Government's preparedness to ameliorate in part some advantageous implications of the original legislation. I thank the Government for moving some way towards taking the pressure off the applicants for these new licences. Amendment agreed to. Clause, as amended, agreed to. Remainder of Bill-by leave-taken as a whole, and agreed to. Bill reported with amendment; report-by leave-adopted. Third Reading Bill (on motion by Mr Duncan)-by leave-read a third time. Debate resumed from 29 October, on motion by Mr Holding: That the Bill be now read a second time. Mr DEPUTY SPEAKER(Mr Cowan) —I understand that it is the wish of the House to debate the Taxation Laws Amendment Bill (No. 4) concurrently with the Taxation Laws Amendment (Fringe Benefits and Substantiation) Bill. There being no objection, the Chair will allow that course to be followed. Mr PEACOCK(Kooyong)(5.45) —We are debating the Taxation Laws Amendment Bill (No. 4) and the Taxation Laws Amendment (Fringe Benefits and Substantiation) Bill. Both Bills contain substantial numbers of amendments to existing taxation laws. Amendment Bill (No. 4) is an omnibus Bill, some 75 pages long and containing 92 clauses. The fringe benefits tax Bill is a massive 146 pages long and contains 75 clauses. So this Government is returning to the scene of the crime in a big way. It is a continuing crime in which it is bludgeoning senseless the ordinary Australian taxpayer. In some areas it is returning to repair some of the damage that it has already done. However, there are no beg your pardons and no apologies. It is hard for this Government to stop being arrogant and admit that it is wrong. It is, in fact, the most arrogant Government-yet complacent in the face of concerns deeply felt in the community-that this country has suffered under. Mr Staples —Come on! Mr PEACOCK —I am not saying, `Come on'. If one traces the history of this nation one will not find a government that so senselessly abuses the people of Australia as this Government has. I say that with a great deal of feeling. There is never a preparedness to admit error. There is always a preparedness to inflict further tax burdens on Australians, but in a manner in which it is never put to the people that in fact this is the highest taxing, biggest spending government in our history. This reputation joins its other reputation of being the most arrogant. We will not oppose the Taxation Laws Amendment Bill (No. 4) but we will be moving an amendment to the Taxation Laws Amendment (Fringe Benefits and Substantiation) Bill based on our opposition to the manner of this Government's imposition of a fringe benefits tax-a tax which the Opposition is determined to eradicate. I will refer to the amendment later. First, I want to highlight some aspects-some praiseworthy, some not-of the Taxation Laws Amendment Bill (No. 4). One area that does not warrant any praise is the Government's inept handling of the housing industry. This Bill reintroduces negative gearing. That is to say, the income tax restrictions on the deductibility of interest associated with the negative gearing of rental property investments is to be removed with effect from the commencement of the 1987-88 income year. Only last year, when the legislation was introduced to remove deductibility, the Government rolled out its old rhetoric claiming that the quarantining of negative gearing was based on equity and that the Government would assist property investment opportunities by increasing the depreciation allowance from 2 per cent to 4 per cent. That was the rhetoric. The reality is that it was just another grab for cash. This Government is, as I have said, the highest taxing government in the history of our nation. An estimated 24.5 per cent of gross domestic product in 1987-88 will be collected in taxation revenue. It attacked the whole concept of negative gearing when it abolished it. It abused the Opposition for opposing such a measure. The trenchant rhetoric that was used on the Opposition in this Parliament when we criticised those opposite for eradicating negative gearing in this House, and the outright rejection of our arguments that they would soon change their ways, all comes to mind again today. We pointed out that this would strike a blow at the housing industry and have a devastating effect on rentals. Those who have suffered, either by the inability to rent properties since that measure was taken or by having to pay through the nose because of the lack of buildings constructed as a consequence of the measure and through lack of finance being injected into the industry, all come to mind now when the Government comes back to this House to change the measures that it sought to enact and impose on people for a lengthy period. Mr Tim Fischer —Could this be something to do with the New South Wales election? Mr PEACOCK —Unquestionably all this is to do with pork barrelling Barrie Unsworth. This is another deal that he has done with the Treasurer (Mr Keating). I will have a lot to say one day about this Treasurer and his history and record in New South Wales politics, but that is for another day. This Government thrives on revenue collection. Little attention has been given to cutting back its wasteful expenditures because it has no compunction whatsoever in squeezing more income out of the long-suffering taxpayers. Indeed, the Budget Papers estimate that total revenue collection in 1987-88 will increase by a massive $5.9 billion. That is an increase on an already high level. The total collections of $72.2 billion in 1986-87 are estimated by the Treasury, a level to which the earlier negative gearing contributed. Where was the equity that the Government talked about? Where was the equity for the average Australian who was simply trying to put a roof over his or her head? Already Australians have been subjected to record high interest rates that have resulted from this Government's inability to adequately address the economic problems facing our country and the rental industry which, as I have said, has suffered enormously. The affordability of a home deteriorated markedly under the Government's high tax and high interest rate policies and in the year to March 1987 the average home loan repayment, as a percentage of average weekly earnings, increased from 21 per cent to 27 per cent. That is an average increase of about 30 per cent in the level of repayments. In addition, I can recite other statistics which reveal the magnitude of the housing squeeze. For instance, apart from the drought year of 1982-83-and we saw one of the most severe droughts ever to hit this nation in that year-housing starts per 1,000 of population for 1986-87 were at their lowest level in 30 years. No wonder this Government decided to alleviate some of these burdens by reintroducing negative gearing. But let us not forget the arrogance of the Treasurer-and I have referred to the arrogance of the Government-when he originally removed negative gearing. Mr Donald Cameron —Everyone was a crook. Mr PEACOCK —Well, I would never use that term. But in this House on 17 October 1985 the Treasurer said: I cannot believe that any leader of a major party would come into this Parliament and seek to have restored one of the most blatantly abused tax shelters in thesystem . . . But here the Government is restoring it. He went on: To try to defend this behaviour, this outrageous rort- that is something, coming from this Treasurer- on the basis that it helps some renters is extraordinary. The great majority of rental properties are not affected by negative gearing and negative gearing has not succeeded in providing an adequate number of rental properties. Mr Donald Cameron —Who said that? Mr PEACOCK —The Treasurer said it and he has had to eat humble pie over this issue. This was not because of any concern for the burden he placed on the building industry or for those who sought to rent houses at reasonable rates. As earlier exchanges revealed, the real reason was simply to help his poor old mate, Barrie Unsworth, to try to bring in a few votes, if at all possible at this late stage, in the next New South Wales election. Nevertheless, I am glad that the Treasurer has so evidently had to admit that he was wrong on this issue. However, I am afraid that the arrogance of this Government will continue to blind the Treasurer to the fact that this is not enough. What are really needed to help the building industry are substantive long-term reductions in interest rates. But those will not occur unless the Government recognises the need to force the pace of economic adjustment of our domestic economic policies in the face of the critical external imbalances that Australia faces at the moment. That is especially in terms of helping to reduce Australia's net foreign debt of $83 billion. That is the Labor Government's debt-the Government that has quadrupled our debt in just four years. Before discussing the fringe benefits tax, I wish to note a few other aspects of the Taxation Laws Amendment Bill (No. 4). Firstly, the Opposition supports the averaging of income for artists, writers, sportsmen and various other people who have highly variable incomes on a yearly basis. The averaging proposed is a rational response to certain apparent anomalies and should be supported on grounds of fairness. Our shadow Minister in this arena, Senator Puplick, has long been a campaigner for this. On the Opposition's behalf, I am pleased to indicate to the Government that we support those averaging provisions. Secondly, I take the opportunity to support the various anti-avoidance measures covered in the legislation. In particular, I note the new arrangements to deal with deferred annuities. Unfortunately, however, while we are seeing more legislative amendments dealing with the establishment of the Occupational Superannuation Commission, as yet there is no legislative substance; all we have is the skeleton. The regulations have still not been presented to Parliament. Superannuation practitioners continue to live on the uncertainty of Press releases to indicate to them how they should be conducting their business. Of course, the issue of government by Press release prompts me to move on to a more detailed discussion of the Taxation Laws Amendment (Fringe Benefits and Substantiation) Bill. This Bill was put on the table only the week before last. There has been very little time to review adequately the enormous number of provisions that it contains. The opportunity for community debate has certainly been restricted. However, as always, this Government claims that its plans were fully revealed in its Press releases of 26 August and 29 October last year. Honourable members know how it is with this Government. It issues a Press release and says, `That will do, do not bother about fine tuning the law, just tell people they have to abide by whatever is said in a Press release'. There is no more delinquent form of government than simply shoving out a Press release in the boxes and telling the people of Australia in that same arrogant style, `This is what we are dumping on you; if we decide to change the legislation later, so be it, you will just have to wear it and you will wear it because that is our diKtat'. It is becoming symptomatic of this Government-this type of government by Press release. I hope to high heaven that the Government is correct and that it fully reveals what was in its Press releases of 26 August and 29 October last year. Previously we have seen the Press release issued and when the legislation comes into the Parliament it covers areas never encompassed by the Press release at all. I hope that that is not the case in this legislation, the length of which I referred to at the commencement of my remarks. At this stage I have been unable adequately to test the mirroring of the Press release by this legislation. The potential for creating further anomalies by acting in this manner is enormous. With such little opportunity for public debate, I am particularly concerned on this occasion with the consequences in case there is no correct mirroring of the Press release in the legislation. Of course, the Opposition has always been opposed to the method and the application of this Government's fringe benefits tax. As a result we will be moving a second reading amendment, which reads: That all words after `That' be omitted with a view to substituting the following words: `the House declines to give the Bill a second reading, as it totally rejects legislation pertaining to the Labor Government's iniquitous fringe benefits tax while at the same time noting that a more efficient and equitable revenue collection system requires that obvious tax avoidance procedures, where benefits are not related to legitimate business activities, must be adequately dealt with'. I advise the Minister that I shall be moving that amendment at the end of the cognate debate and when the particular fringe benefits legislation comes before us at its second reading stage. This legislation is a further example of this Government's habit of producing ill considered and haphazardly prepared drafting. We have before us 147 pages of amendments to a tax that was introduced only last year. Already the Government is producing 147 pages of amendments. Is that to be regarded as well thought through and well considered legislation? I assume that it is another example of a series of unintended consequences. I acknowledge that they are measures designed to ease the burden of the existing system, but if any system has imposed an iniquitous burden, it is this one. How can the Government reasonably expect employers to digest this sort of complex material? Let us not forget that there are at least another 1,000 pages in the Income Tax Assessment Act for taxpayers to ponder. Indeed, I understand that since the National Taxation Summit-the summit that was to give us equity and simplicity in taxation in 1985-this Government has added some 700 pages to the taxation law of this nation. I remind the Government that there are basically three principles to strive for when considering taxation. They are, firstly, equity; secondly, efficiency; and thirdly, simplicity. Let me repeat that last principle: simplicity. While the Government has continually fallen well short of the mark, on occasions on all three, the present legislation along with its parent legislation, is a monster of complexity. Let me remind the House of the nine principles of taxation that the Prime Minister (Mr Hawke) declared in the 1984 election campaign. That was the campaign following which Labor was to have a 100-seat majority but ended up losing seats, with the Prime Minister going into his now well-known bunker. Mr Robert Brown —We won the election, though. Mr PEACOCK —Indeed, and I give the honourable member full credit for that. There are no second prizes in elections; there is no doubt about that. Mr Holding —We did better last time, but then you were not the Leader of the Opposition. Mr PEACOCK —I should not respond to that. I do not want it on the record. Let me remind the House of those nine principles. We are having so many summits that I thought that the Government was intending to construct ski lifts in Canberra. The Prime Minister went to a radio station, he was asked, `What about a summit?' and said, `Yes, that is not a bad idea'. He took it on the run, and suddenly had to say something because it was exposed that there was no tax policy. Therefore, he produced in tablet form nine principles for tax reform that he would carry to the Tax Summit. Principle No. 4 said: . . . any reform must lead to a simpler system, which therefore all Australians can understand more easily, and which therefore makes tax avoidance and evasion more difficult. The Government turned a pretty blind eye to that one in terms of this legislation. What the Government does not realise is that equity considerations tend to fly out the window when the laws become too complex to comprehend easily. In addition, efficiency is obviously assaulted by the large social costs that such uncertainty and administrative entanglements cause. The Prime Minister had another principle to which I shall refer-principle No. nine, which said: . . . any reform package must have widespread community support. There was a fair bit of widespread community support for some of the Government's tax measures! Community support for the fringe benefits tax was so strong that the Government has brought in stacks of amendments-another principle tipped on its head. Ordinary taxpayers would be fairly reluctant to offer their agreement to these so-called reforms forced on them by the Government. This Government should realise that it should stop milking the system dry. It should refocus its attention away from the revenue side of the Budget books to the expenditure side. Future reductions in the deficit need to result from expenditure cuts, not revenue increases. As the Opposition has repeatedly said, to cope adequately with Australia's precarious economic future, fiscal and wages discipline must be paramount. This Government is preening itself under the delusion that it has done what is necessary. But a $2.5 billion deficit-an underlying deficit, which is what it was in reality, not this so-called shonky balanced Budget that was produced-as a result of a lazy recourse to a billion dollars in asset sales and payment of one-off profits from the Reserve Bank of Australia and the Royal Australian Mint is hardly a satisfactory response to coping with external economic shocks. The Government has left Australia badly exposed to a gathering economic storm. It has done this by raising taxes and costs and by wasting the opportunities for appropriate fiscal restraint. While the relative calm before the storm of international disruption is upon us, we should take the opportunity to quicken the pace of adjustment and prepare our country for the inevitable buffeting to come. But this Government has turned its back on that course. It is not prepared to impose disciplines upon itself. It imposes the burdens, the disciplines, the hardships and the restrictions on average Australians because its course of action is recourse to tax-to tax and tax as no other government in this nation has taxed before. If the Government were genuine about turning round the economy, if it were prepared to abandon its high risk strategy in the face of the external imbalances that are crushing down on us today, it would recognise that constantly striving to raise more revenue is the wrong direction to be taking. The Government should be imposing on itself fiscal constraints which it claims, and correctly to some extent, the Americans ought to be imposing on themselves. There is no doubt that there is a need for the United States to adopt a very tough approach on fiscal matters, but it is also necessary for this Government, which has placed our country in a worse position relatively than the US, to be imposing the same disciplines on itself. `Do what I say', the Treasurer indicates to the United States, `but not what I do'. Well, it is about time he began to practise what he preaches, and it is about time the Prime Minister implemented the essential principles he allegedly laid down in the Tax Summit. One part of the legislation we are debating is to give tax relief, to ease the burden, but let us remember that it is to ease the burden of an iniquitous tax introduced by this Government, the fringe benefits tax, and it ought to get no credit for that. Simply straightening out the mess it imposed is hardly a matter for plaudits, nor is it a matter for plaudits that it is now reintroducing negative gearing when it should never have abandoned it in the first place. Mr HOLDING(Melbourne Ports-Minister for Employment Services and Youth Affairs and Minister Assisting the Treasurer) —I present, for the information of honourable members, an erratum to the explanatory memorandum for Taxation Laws Amendment Bill (No. 4) 1987. The purpose of this erratum is to correct a number of typographical errors in the explanatory memorandum. A copy of this erratum was provided to the shadow Treasurer, the honourable member for Kooyong (Mr Peacock), prior to the debate. Mr JENKINS(Scullin)(6.09) —The Government's success in restructuring the taxation system, and in particular the success of the fringe benefits tax and substantiation provisions, has served to emphasise that in recent Australian history there is probably no area that is subject to more misapprehension, misinformation and mythology than the area of taxation. Foremost among these myths is that Australia is a high taxing nation. It is fair to say that Opposition members have staked their political fortunes on the successful propagation of this myth. I think that is something we have witnessed in the contribution of the shadow Treasurer, the honourable member for Kooyong (Mr Peacock). The Liberal manifesto in the July election is littered with rhetoric about the burden of taxation. This is a story that has been trotted out time and time again by Opposition members. I repeat: It is a myth. Relative to other Organisation for Economic Co-operation and Development (OECD) countries, Australia is a low-taxing nation. This has been the case for some time. In 1979, a comparison of total tax revenue as a percentage of gross domestic product (GDP) in the major OECD countries listed Australia at 30 per cent. In 1979, the OECD average was 35 per cent. Total revenue as a percentage of GDP was lower in only Greece, Portugal, Japan, Spain and Turkey. A similar comparison of OECD countries in 1984 showed the same results, with Australia well down the list, ranking eighteenth. Only New Zealand, the United States, Spain, Japan and Turkey ranked lower. The most recent OECD figures, for 1985-86, by different interpretations, either ranked Australia sixteenth out of 19 countries or seventeenth out of 23 countries. Either way, there can be no question that in relation to the rest of the developed world Australia is a low-taxing nation. Other myths related to our taxation system are equally erroneous. Foremost amongst these myths is the belief that the business sector is shouldering an increasing burden of taxation. In contrast to popular mythology, the contribution of the corporate sector to our overall taxation revenue has fallen sharply. In 1965 the corporate sector contributed 16 per cent of our total tax revenue. In 1983 this proportion had fallen to 8 per cent. In other words, in two decades the contribution of the corporate sector to our overall taxation revenue has fallen by approximately half. Earlier this session in the appropriation debate I made the point that there is other OECD information which needs to be reinforced. This information needs to be made part of the present debate. In that debate I quoted an article which appeared in the Australian Financial Review in late September. It stated: Once social security levies borne by employers are added in, Australian companies enjoy the second-lowest tax burden in the OECD in 1985-86, paying 2.8 per cent of GDP . . . The only nation with a lower overall corporate tax in comparison to GDP was Turkey, at 2.5 per cent. As I said in that debate, there is a need for that information to be taken into account so that we can have a reasoned debate on these issues. The Melbourne Age reported earlier this year that John Elliott, the pretender to the leadership of the parliamentary Liberal Party, has threatened to move his Elders IXL empire overseas as a response to Australia's rising tax charges. The facts on business taxation speak for themselves. Mr Elliott was simply attempting to breathe new life into a tired old Liberal myth. It is interesting to read in today's newspapers that the same gentleman, John Elliott, is calling on the Federal Government to introduce a mini-Budget with a surplus of at least $3 billion. Where are we to make the spending cuts to achieve this surplus? The Deputy Leader of the Opposition, the honourable member for Kooyong, in his contribution, made the same statements and gestures to the effect that we should be cutting back expenditure. But never in my time in this place have honourable members opposite set out a program showing how they would achieve such cuts. The result of the July election indicates that the Australian electorate asks for information of that type to be given to it when sitting in judgment on who should govern this country. Other trends in our taxation system over time are particularly relevant to the legislation before the House. Over a 30-year period the contribution of high income earners to our total tax revenue has fallen sharply. Thirty years ago, individuals who earned more than 1.6 times the average yearly earnings contributed more than half of the total taxation collected. In 1986, it was estimated that taxation collected from these individuals accounted for only about 20 per cent of the total. In large part, this decline was due to an explosion of remuneration outside the tax system which occurred under the guiding hand of those opposite. Once all the myths are dispelled, it is no wonder that the 1984 Australian Labor Party platform set for the Government the task of creating a fairer and more equitable taxation system for all Australians. The fringe benefits tax was an integral part of the Government's attempts to fulfil that commitment to the Australian people. It is undeniable that untaxed fringe benefits added significantly to the unfairness and inequity of the Australian taxation system. It was estimated that the highest paid 11 per cent of the population had three to seven times the chance of receiving fringe benefits of any kind than the 74 per cent of wage and salary earners paid below average earnings. The overwhelming majority of ordinary pay as you earn (PAYE) taxpayers were being forced to pay for the free perks of a small minority of high income earners. Just on 12 months ago the then shadow Treasurer, the honourable member for Mackellar (Mr Carlton), stated that the Liberals would throw out the fringe benefits tax (FBT) lock, stock and barrel. Having lost an election, the former shadow Treasurer, the architect of a failed taxation bribe which incorporated a return to the rorts of the past, has been consigned to economic obscurity. Who was thrown out lock, stock and barrel? Amidst the howls of protest and indignation from those who had been getting a free ride from the Australian people for years, some even dubbed the FBT the `farewell Bob tax'. Where are these people now? Honourable members opposite, in a foreshadowed amendment, have the cheek and gall to toe the same line. The July election result highlighted the fact that the hegemony of Liberal myths about our taxation system has been shattered. Even the business community acknowledges that. It has now made the salary package legitimate. The FBT has flushed out the former rorts. As the Financial Review stated in March, the business community is currently basking in a new found respectability. The so-called clandestine arrangements have now been formalised. The salary package has been accepted into society. It is no longer questionable and under the table. To me that is fair. It is a rightful consequence of the legislation. As this year's Budget Papers indicate, the fringe benefits tax has had spectacular results. Forward estimates for the FBT for 1986-87 were $325m. Actual tax collections for 1986-87 were significantly higher than expected-$535m. As the Budget Papers outline, one of the main factors in this increase appears to have been a significantly higher than expected value of benefits per employee. The amount of $535m in revenue would have been squandered under those opposite. That revenue has been used to fund real tax cuts to ordinary PAYE taxpayers. As I have said, the fringe benefits tax has the support of the Australian people because it brings greater equity and fairness to our taxation system. But more can still be done. For instance, concerns have been expressed in the community in relation to the tax concessions that currently apply to superannuation. I share some of these concerns. In an aging society, the argument in favour of superannuation is unquestionable. That the Government has instituted a number of tax concessions as an inducement to people to save for retirement during their working years is appropriate. Although estimates vary considerably, the cost of such tax concessions is estimated to be at least $3 billion per annum. Employer contributions and, in relation to certain approved schemes, individual contributions are tax free. In 1986 Treasury estimated that that amounted to $1,710m in forgone revenue during 1985-86. In most cases the income of superannuation funds is entirely tax free. Again in 1986 Treasury estimated that that amounted to $1,700m in forgone revenue during 1985-86. My concern is that these concessions are generous to the point that they are liable to abuse and are inequitable in application. Firstly, there exists the potential to evade the spirit of the concessions given to superannuation contributions under the fringe benefits net. For instance, on the one hand, if an employer were to pay an executive in the 49 per cent marginal tax bracket an additional $1,000, after normal taxes the executive would have $510 left to consume or invest. If, on the other hand, as part of an attractive employment package the employer pays an additional $1,000 into a superannuation fund, not only will no tax be payable on the income but also the employee could be said to have invested $510 while the Government is contributing $490 in forgone taxes. The most concerning feature of this argument, as Rick Krever, a lecturer in law at Monash University, pointed out in a recent edition of Australian Society, is that the subsidy suffers from an upside down effect-grants rise geometrically with a taxpayer's income. The greater contribution of superannuation, either by employers or in certain approved schemes by individuals, the greater the contribution of the government in forgone taxes. Contrast the example of the higher marginal tax rate with an individual whose income is in the lowest tax bracket. If the individual's employer invests an additional $1,000 in a superannuation scheme, no tax is payable, but in effect the individual employee has invested $760 and the Government has invested $240 in forgone taxes. I urge the Government to monitor the potential abuse of these concessions and to examine the equity of their application. Similarly, I believe there is merit in calls for a review of the tax rate on lump sum superannuation payments, particularly those above $250,000. It may be that the removal of the ceiling has created lucrative opportunities for senior executives. As an article in the Australian Financial Review of 9 November pointed out, superannuation packages amounting to millions of dollars attract a rate of tax of 31 per cent at the most. A justification for this level is difficult to find. In keeping with its commitment to create a fairer and more equitable taxation system, I am certain that the Government will closely examine these matters. The Government's task has been made all the more difficult by the years of rorts and loopholes presided over by those opposite-rorts and inequalities that were shrouded in mythology. The perpetuation of these myths has so stifled and distorted rational debate on the taxation system that a National Party senator for Queensland, Senator Stone, in his capacity as economic adviser in the Joh for Prime Minister campaign, went so far as to suggest that one of the virtues of a flat tax is that rich people will be less inclined to avoid tax. In a low-taxing nation such as Australia such an attitude is somewhat perverse. This Government rejects the politics of greed. The capital gains tax, the fringe benefits tax and other tax reforms of this Government are examples of how greater fairness and equity can be introduced, at the same time shattering the myths that have shielded privilege and inequality for so long. The Government must press on with this course of striving for fairness and equity and rational debate on tax matters in the hope that statements such as that by Senator Stone are met with universal condemnation by the Australian people. I have great pleasure in commending the Taxation Laws Amendment Bill (No. 4) and the Taxation Laws Amendment (Fringe Benefits and Substantiation) Bill. Mr DONALD CAMERON(Moreton)(6.24) —The honourable member for Scullin (Mr Jenkins) is endeavouring to write three myths into the records of this country. The first myth is that Australia is a low-taxing country. That comment is absolutely without foundation. The honourable member drew comparisons that were so extraneous that they were unreal. The second myth is that the honourable member wanted to further increase the taxation rate applicable to superannuation payouts. I hope all those who are nearing retirement hear this. The Government in power has already increased taxation applicable to superannuation payouts by approximately 600 per cent since it came to power. The honourable member for Scullin is an advocate of a further increase in that tax rate. He should be utterly ashamed of himself for advocating even higher taxation in Australia. The third part of his speech which was total myth and which was inaccurate was the way the honourable member presented the fringe benefits tax as a fair and just tax. It seems as if some members of the Australian Labor Party have been living under cabbage leaves for the past couple of years, because the legislation before the House this evening seeks to repeal some of the aspects of taxation which the Opposition said from the start were totally unjust. I shall enlighten the honourable member for Scullin: part of the proposed legislation is designed to remove the fringe benefits tax where an employee borrows a typewriter from the boss on the weekends. That exemption was included in the explanatory notes. That is one example of the way the fringe benefits tax was working. Another little act of generosity which previously existed and which needed tightening up, according to the honourable member for Scullin, applied in the case of someone who was ill and who needed to be taken hundreds of miles or thousands of miles, if overseas, to a doctor or a hospital. In that case the fringe benefits tax applied. That was the kind of legislation introduced last year into Parliament by this Government, and those opposite wonder why the Opposition carried on as it did. No wonder we said that it would be thrown out lock, stock and barrel. Another example of where the fringe benefits tax applied was when a person needed to be accompanied in an aeroplane and needed that companion to hold an oxygen mask to the patient's face, or if the patient needed a drip to be held in place. Yet the honourable member for Scullin said how wonderful it was that all the rip-off merchants were brought to heel. It is obvious that the honourable member does not understand the tax. What else is the Government going to do? The Government is about to rectify the situation applying to disadvantaged persons who have to pay fringe benefits tax to cover any meals that are provided to live-in help. The definition of those who are disadvantaged-and there are a few of these on the other side of the House-includes intellectually and physically handicapped persons and those living in necessitous circumstances. They are now to be excluded. The fringe benefits tax also applied if someone had a babysitter caring for the children and the babysitter given lunch. Yet those opposite cite the fringe benefits tax as reasonable and fair. I suggest that members of the Australian Labor Party who continue to justify the fringe benefits tax should learn about the tax, because the Opposition was motivated not by a desire to protect the greedy but by a desire to return fairness to the system. The Government became so petty minded in the application of the laws that this tax will stand as a testimony to the inefficiency and small mindedness of the present Government. The Labor Government promised at the time of the 1985 Tax Summit, as outlined by the shadow Treasurer, the honourable member for Kooyong (Mr Peacock), to simplify tax laws. At that time Australia had 1,100 pages of tax laws. It took 85 years to reach that number, but in May 1986 the Government added a further 625 pages of tax laws, which represent a 57 per cent increase. Mr Tim Fischer —A growth industry. Mr DONALD CAMERON —A growth industry. Today's Taxation Laws Amendment Bill (No. 4) contains 73 pages of amendments. Sitting suspended from 6.30 to 8 p.m. Mr DONALD CAMERON —Since you are in the chair, Madam Speaker, I will recap what I was saying just before the dinner break when I explained how, at the time of the 1985 Tax Summit, when this country had 1,100 pages of tax laws, the Government promised to simplify the tax laws. It had taken 85 years to reach that point, but in May 1986 the Government added another 625 pages, which represented a 57 per cent increase in the number of pages needed to explain the tax laws of this country. Mr Duffy —So? Mr DONALD CAMERON —Did someone say, `So'? That increase was in contrast to the promise to simplify tax laws. All the Government has done since that time is complicate and enlarge the tax laws. I hope the Minister for Trade Negotiations (Mr Duffy), who is at the table, will listen carefully because he is in for some more. Today's Taxation Laws Amendment Bill (No. 4) contains 73 pages of amendments. That Bill represents some changes to the laws pertaining to foreign investors and what is called `thin capitalisation', discounted and deferred interest securities, approved deposit funds, shelf companies and occupational superannuation. Indeed, just before dinner we heard the honourable member for Scullin advocating that the taxation rates applying to superannuation be increased. I believe that is a speech he will long rue. The Bill also completely overturns the Government's policies on so-called negative gearing. Also there is the reduction of deductions for capital expenditure on new income producing buildings. The second Bill is an absolutely classical Bill. It is 145 pages of amendments to the Fringe Benefits Tax Assessment Act of 1986. Mr Fife —How many pages? Mr DONALD CAMERON —It is 145 pages. It is yet another litany of `we was wrong'. A moment ago I said this Bill was classical. I do not use that word lightly. The Government already has the record of the biggest spending, highest taxing government in the nation's history. The Prime Minister (Mr Hawke) parades the honourable member for Blaxland (Mr Keating) as the world's greatest Treasurer. What a laugh! He is now to be credited with yet another record, by being the first Treasurer ever to have to amend so quickly legislation that we were told was word perfect. What are now paraded as unintended consequences are being addressed with an Act of Parliament that has more pages than the original legislation. I have here the original legislation from last year, the Fringe Benefits Tax Assessment Bill 1986. I wish I were allowed to table it. It has 139 pages. But the amending legislation that came out one year later has 146 pages. It has taken more pages to correct the unintended consequences than it did to bring in the consequences. I suggest that this is probably a world record for any government, and maybe that is why the Treasurer has the title of the world's greatest Treasurer-high interest rates, high deficits, high spending and now thick amendments. Mr Fife —He wants to get into the Guiness Book of Records. Mr DONALD CAMERON —He will get there, all right. This fringe benefits tax legislation was introduced with all the hype. Everybody was accused of being a cheat or tax avoider and this legislation was seen as a way to bring people to heel. Yet just over a year later we have amending legislation in the Parliament. Let us turn to the amending legislation itself. Do honourable members remember how the Prime Minister promised the nation at the time of the Tax Summit that one of the most important guidelines was simplifying the tax system? What a laugh that promise was. That undertaking really counted for nought. When I commenced speaking I mentioned the thickness of the tax laws and how the Government increased 1,100 pages to more than 1,700 pages. That was an explosion of simplification. It is little wonder that an efficiency study recently conducted by the Australian Taxation Office established that 30 per cent of all answers given by taxation inquiry officers to questions from the public were either half wrong or totally wrong. One really could not expect the people who work in the Australian Taxation Office to understand the tax system, because it has been made so complicated. I would venture to suggest that Mr Boucher would not really understand it all either. There are so many sections of specialisation because it is so complex. Yet the Government expects the 750,000 small business people out there and some of the not-so-small business people across Australia to understand it all. What is more, if they make a mistake, bang-they face a penalty of 20 per cent of the annual interest charge on unpaid tax plus a 40 per cent surcharge. Let us examine the amending legislation which is purported to be the salvation. Let us take a few examples to show how out of touch the Hawke Government and, indeed, the Taxation Commissioner, really are. Let us remember that this legislation amends one of the additional bibles that those who employ people must abide by. Let us remember also that the hundreds of thousands of employers across our land include tens of thousands who have difficulty even speaking the language, without having to cope with reading and understanding all this legislation. I come to the examples in this 146-page Bill. This is the formula that people who have to pay a fringe benefits tax on the taxable value of car fringe benefits and who opt for the cost basis will have to put up with from now on. I am talking about the little people out across this country who are working their guts out to try to make a living, who are not guaranteed any level of income and who get a living only as a result of their effort. These people will have to apply a formula, which is: (C x (100%-BP))-R It is almost a test for matriculation or higher mathematics at a university. I read how the Commissioner of Taxation enlightens the whole nation: where: C is the operating cost of the car during the holding period; BP- I used to think that was the name of an oil company- is: (a) if, under section 10A or 10B, the employer is not entitled to a reduction in the operating cost of the car on account of business journeys undertaken in the car during the holding period-nil; (b) if, under section 10A or 10B, the employer is entitled to such a reduction and the percentage calculated in accordance with the formula: N-U No wonder the honourable member Charlton (Mr Robert Brown) has his head hanging low. This is the kind of rot that the Government is subscribing to for the use by the people. I turn to the next example, the calculation of depreciation and interest. That is calculated on the formula: DEP X DHP DEP X DCO The interest component is calculated as follows: INT X DHP DHP X DCO `INT' probably stands for interest. The next example concerns the taxable value of remote area accommodation. That formula is based on SA-which could be South Australia, but I guess it is not-as follows: SA X DTP DHP X DYT Mr Fife —It gives you the DTs. Mr DONALD CAMERON —It gives you the DTs as the honourable member for Hume reminds us. Then we go to the other one, a re-write of the English language. There is another section here-in all fairness I hate to misrepresent the Commissioner of Taxation in any way-which says: where: TV is the amount that, but for this subsection and Division 14, would be the taxable value of the residual fringe benefit in relation to the year of tax; I make the point that the word `TV' no longer means television, but taxable value. So all you people out there in Australia should take note. If you do not get TV right, you are going to get a 20 per cent penalty, plus 40 per cent on top of that, for being dull and for not spending all of your time thinking about your taxation obligations. You ought to be ashamed of yourself. You promised at the Tax Summit that you would simplify things and all you have done is complicate them. It is all very well for the Government and the Australian Taxation Office to say that people can hire any accountant. Even though the cost is a tax claim against income, the realities are that it is money that people have to spend, and like it or not, that additional expenditure has to be landed on top of the end product. The Hawke Government and the world's greatest Treasurer have a totally shameful record in terms of complicating the Australian taxation system. We have reached a stage in Australia where we can entirely eliminate unemployment by training the 650,000 unemployed as accountants. The complexities of the tax laws of the Hawke Government and the Taxation Office have made accounting a faster growth industry than even tourism. In my remaining two or three minutes I want also to mention the fact that this is the time when another one of the Government's pronouncements, and indeed the Treasurer's pronouncements, on negative gearing is being totally reversed. We listened in this place for three or four years to denunciation after denunciation from the mouth of the Treasurer, that anybody who indulged in some business practice was an evil person to be treated with contempt. He used to spit the words out. I remember his introductory speech on negative gearing, about the way this active criminality had to be swept from the books, and that anybody who defended it also had to be a conspirator of some kind, a defender of frauds and crooks. Yet here we have legislation in the Taxation Laws Amendment Bill (No. 4) completely turning it over and reintroducing it. The honourable member for Kooyong (Mr Peacock), the shadow Treasurer, was very correct when he said before dinner that the Labor Government in Canberra had been stampeded by the fears of the Unsworth Government in Sydney. Mr Simmons —Ha, ha! Mr DONALD CAMERON —Don't you laugh, honourable member for Calare. It is not funny when people in Sydney are having to pay $267 a week on average for a three-bedroom home. I do not regard that as funny, and that is what your legislation of a year or so ago caused. Mr Simmons —That is rubbish. Mr DONALD CAMERON —`Rubbish', he says. Heaven forbid, you wiped out of the market all investors. You took them out of the market. That is the trouble with you Labor politicians, you do not understand business. You are very good in the academic institutions and at running unions, but when it gets beyond those fields, you are really devoid of practical understanding. So please do not say `rubbish' because that is the reason why Mr Keating is going against everything he ever said, which is a fairly dramatic action on his part, because the reversal of that decision is an admission that `I was again wrong'. At least we have the New South Wales election almost upon us which has caused the Government to make changes. Madam SPEAKER —Order! The honourable member's time has expired. I remind the honourable member that he should be speaking through the Chair. Mr ROBERT BROWN(Charlton)(8.15) —We are presently having a cognate debate on two items of legislation that have come before the Parliament, namely, the Taxation Laws Amendment Bill (No. 4) 1987 and the Taxation Laws Amendment (Fringe Benefits and Substantiation) Bill 1987. Both of those Bills contain-other members have referred to this as well-a significant number of items of importance, not only to taxation law but also to the question of equity and the question of the efficiency with which taxation law would be applied. There are a number of items of that legislation with which I wanted to deal. I wanted to deal, for example, with some of the special provisions which have been introduced into the legislation to ensure that the approved deposit fund arrangements, which the Government introduced as part of its treatment of superannuation lump sum benefits and the use of superannuation funds, would not be abused. I wanted to deal with the provisions of this legislation for the treatment of deferred annuities and some of the ways in which those deferred annuities have been used for purposes other than those purposes for which the legislation was originally intended. I wanted to deal with questions of the Government's actions to ensure that the thin capitalisation procedures, which have been pursued by some foreign-owned or controlled or dominated companies in Australia, would not be as effective as they have been for the purposes that those companies have been pursuing. But in the light of the contributions that have been made immediately before I began mine-first of all by the honourable member for Moreton (Mr Donald Cameron) and earlier, before dinner, by the honourable member for Kooyong (Mr Peacock)-I think it is necessary for me first of all to respond to some of the claims that have been made. Both honourable members referred to the fact that since this Government has been in office, since March 1983, there has been a significant increase in the volume of the Income Tax Assessment Act. Let me agree with that. Let me confirm that, and let me then go on to explain the reasons why that increase has become necessary. First of all, it was necessary for this Government to tidy up the mess in which the taxation laws of this country had been left as a result of seven years of mismanagement, seven years of lethargy and seven years of occasions when, as I have said on previous occasions, it was necessary to haul into this Parliament the previous Treasurer under that Government, the present Leader of the Opposition, the honourable member for Bennelong (Mr Howard), in order to take action to stamp out tax avoidance and tax evasion and to introduce into the taxation laws of this country the things to which the honourable member for Kooyong referred-simplicity, equity and efficiency. Mr Simmons —Fairness. Mr ROBERT BROWN —As the honourable member for Calare quite correctly interposes, it is a question of fairness. We remember on occasions when reports came before this Parliament that we referred to them as telephone directories. We could put together the White Pages and the Yellow Pages of the Sydney telephone directory, and they would hardly be as big as that volume of material that came before this Parliament in order to confirm the lethargy and the reluctance on the part of that previous Government to introduce into taxation law in Australia legislation which was designed to rip out of the system all of the abuses that have become entrenched into it as a result of that inactivity, as a result of that incompetence and as a result of that lethargy. Why would we not now be criticised for the increased volume of taxation legislation for which we have been responsible? Let me make it perfectly clear that as far as the Government is concerned, the volume of taxation law in Australia will continue to increase until we have ripped out of the system all of those abuses that remain. We make no apology for that, nor should we, and nor does the Australian electorate expect us to do so. I have said on previous occasions-when we were in opposition this claim was laughed at, but it has been subsequently confirmed by all responsible authorities, analysts and commentators-that something like $3,000m to $4,000m every year was being avoided and ripped out of the taxation system by the tax evaders and the tax avoiders. Of course the then Government denied that that was the case. Now that the coalition is in opposition it agrees that to a very large extent what I said then was true. Let me assure it that what I said then was spot on. What did it mean when $4,000m every year was ripped off ordinary Australian taxpayers? What did that mean for the households in Australia? On average it meant that they had to pay an additional $40 a week in tax. Mr Donald Cameron —You certainly haven't given it back to them. Mr ROBERT BROWN —I will come back to some of the points the honourable member for Moreton made. Every household in Australia had to pay $40 a week in additional tax in order to compensate for the sharks. They paid $2,000 a year for the seven years of the Fraser-Howard Government. The coalition allowed $14,000 to be ripped out of the pockets of ordinary Australian families to pay the tax to compensate for the sharks. Why would there not be an increase in the volume of taxation legislation? Let me tell the Opposition again that we make no apologies for it. It was necessary, as the honourable member for Moreton well knows in his more honest moments. In his more honest moments he would concede that the main reasons for an increase in taxation legislation have been, first, to tidy up the mess; second, to overcome the anomalies; third, to introduce equity; fourth, to restore efficiency; fifth, to pursue simplicity; and sixth, to cut out tax avoidance. We have practically done that. All the artificial paper schemes are practically dead. But there are still large areas of tax evasion and avoidance in this country. Let me assure the ordinary people in Australia that they are paying additional tax to compensate for this and it is coming out of their pay packet, the family budget and the funds that are available for homes for families. It is also coming out of the funds that are available to provide adequately for families and kids. All Australian families, particularly during the seven dark years, paid to compensate for those people who avoided their responsibility and we will not allow that to continue. We make no apology for the fact that on three occasions the Australian people have rejoiced in the undertaking we gave. They have confirmed and endorsed it and they will continue to endorse it because they know the Opposition's record and honourable members opposite cannot escape from it. I was very disappointed to hear the honour- able member for Moreton rubbish officers of the Australian Taxation Office. I have said on previous occasions that they are qualified, competent and dedicated men. Why would they stay in the Taxation Office continuing to serve the purposes and interests of this nation when, with their competence, ability and expertise, they could be making enormous sums of money in the private sector? Why are they not out there? It is because they are dedicated and competent. I was very disappointed to hear the rubbishing undertaken by the honourable member for Moreton. The formulas to which he referred in the legislation probably sound very good. But if the honourable member were given the index and references for the meaning of the expressions to which he referred, he knows as well as I do that it is fairly simple to understand those formulas. The honourable member could give them to a kid in sixth class in a primary school in his electorate and he knows that that kid would be able to explain what it was all about. So just taking a few formulas-CD minus VM over something or other and TV meaning something other than television-is not a very telling point. When we get down to the fundamentals of what this legislation is all about, it is not a very telling point. The fundamentals are those points to which I drew attention before. There is an absolute binding necessity on the part of any responsible and honest government to ensure that the nation operates equitably and to make sure that everyone meets his obligations. Of course that is what the legislation is all about. Members of the coalition are as happy as ever to see the sophisticated, clever, paper, artificial, blatant devices and all the amassed intelligence of the Australian taxation industry, all the amassed intelligence of the Australian legal fraternity devising all of those complex and intricate schemes. When will the honourable member for Moreton stand up in this place and criticise those who were responsible for that? You will quote from legislation in order to-- Mr Donald Cameron —It was the Liberal Party; it was the Fraser-Howard Government-- Madam SPEAKER —Order! The honourable member will resume his seat. Mr Donald Cameron —He asked me to stand up and I did. Madam SPEAKER —Order! The honourable member for Charlton will speak through the Chair. Mr ROBERT BROWN —I will, Madam Speaker. The honourable member for Moreton is now giving evidence of his intense embarrassment as a result of the position which he adopted in relation to that legislation. There are plenty of reasons for embarrassment, some of which I will not go into. Mr Smith —Come on; talk about the Bill. Don't worry. Mr ROBERT BROWN —I assure the honourable member that I am not going to worry. The honourable member for Kooyong, in leading for the Opposition, referred to bludgeoning the Australian people with new taxes or amended taxes and the preparedness of this Government to impose further tax burdens on Australians. Madam Speaker, that taxation package for which the Hawke Government was responsible had the effect of reducing taxation by $4,500m. Mr Peacock —Rubbish! Mr ROBERT BROWN —Did the honourable member say, `Rubbish!'? Mr Donald Cameron —He said, `Rubbish!'. Mr ROBERT BROWN —The honourable member for Moreton is brilliant with formulas but when it comes to a simple matter of fact he denies that it is a fact. Let me assure him-he knows this in his more honest moments-that $4,500m was handed back to the Australian taxpayers by this Government as a result of the total package that was designed to replace institutionalised inequity with entrenched justice and fairness. The new taxation measures compensated for only $1,000m of that $4,500m that we handed back to the Australian taxpayers. We reduced the marginal tax rates. Madam Speaker, you will well recall that when the Opposition was in government the highest personal marginal tax rate in Australia was 60c in the dollar. For every additional dollar that those income earners earned the Opposition ripped 60c off them. We have reduced the top marginal rate to 49c. Surely the honourable member for Moreton should have a little integrity and say, `Yes, you achieved something that we either were not able to achieve or did not seek to achieve'. Mr Simmons —They are embarrassed by it. Mr ROBERT BROWN —Of course members of the Opposition are embarrassed by it. Why should they not be embarrassed by it? They are supposed to be the low tax parties. We are the low tax party. We hauled the 60c in the dollar tax rate back to 49c so that any genuine income earners in Australia now earns he or she will keep over 50 per cent. The coalition ripped 60 per cent out of Australia taxpayers. Let me conclude on this point because time is short and we have all undertaken to keep our comments to a minimum. The honourable member for Kooyong advised us that the Opposition would support one item of the legislation and that was the legislation to which he related the expressions `our preparedness to impose further tax burdens on Australians', and `bludgeoning the Australian people'. That was said in relation to the legislation which the honourable member indicated the Opposition would support. But what of the Bill to which the Opposition proposes to move as an amendment that the House declines to give the Bill a second reading? Of course the House will not decline to do any such thing because the Government has the numbers and it will not decline to give it a second reading. We will pass the legislation and I will tell honourable members why. I am going to tell the Australian people what it is that the Opposition does not want passed through the House. The Bill deals with fringe benefits, about which the Opposition has had a lot to say. The legislation that the Opposition would prefer that we not accord a second reading provides 19 tax exemptions within the structure of the fringe benefits tax. There are 13 other exemptions, increased discounts, concessional extensions, modifications, liberalisations and five simplifications to the procedures to make the application of that law easier for those people whom the Opposition purports to have been representing. That is the legislation the Opposition is suggesting it will decline to give a second reading. The Government is seeking to modify the fringe benefits tax along the lines that many of the people who feel that it perhaps should be modified have been seeking. The Government is seeking to modify it; it will modify it and it will introduce improvements, despite the fact that the coalition, which claims to represent the people paying the fringe benefits tax, would choose not to give that legislation a second reading. I conclude on this point: the Opposition will not be able to stop the legislation being read a second time because the Government has the numbers. Not only has it got the numbers on its side but also it has equity on its side and it has justice on its side. The Government will continue to pursue it. Mr ADERMANN(Fairfax)(8.31) —Honourable members have seen a familiar spectacle: the trusty honourable member for Charlton (Mr Robert Brown) sent into bat on a sticky wicket. He did not say much about the legislation; he could not. He had to resort to the old line about how bad his predecessors were, and he got those facts wrong anyway. He did not say very much about the mess of legislation that required an amending Bill of 147 pages, which is longer than the original Bill, to attempt to get it right. I sympathise with him because I would not like to have to explain or defend the legislation either. Even his flights of oratory could not disguise his embarrassment. I want to speak briefly tonight on the Taxation Laws Amendment (Fringe Benefits and Substantiation) Bill. It is an endeavour to bring some respectability to laws imposing tax on certain fringe benefits, laws introduced by the Hawke socialist Government. It fails abysmally to do so because the parent Act is bad and ill-conceived. No amount of tinkering around the edges will improve it, which is why the Opposition has consistently said, and I say again tonight, that, on its return to the Treasury bench, it will repeal this whole legislation. In his second reading speech, the Minister for Trade Negotiations (Mr Duffy) made quite an astounding statement. He said that when the initial legislation was introduced, revenue gain was estimated at $300m in 1986-87 and $540m in 1987-88. Having admitted that the Government's mathematics were once again extremely faulty, the Minister announced in reality, revenue collections for 1986-87 were $535m. That is a massive 78 per cent understatement of the original estimates, and a huge $750m in 1987-88. He went on to say that that vindicated the Government's imposition of this tax and corrects the costly inequities that have arisen from the growing use of fringe benefit packages. That, of course, is not only non sequitur but also is complete nonsense, and I shall substantiate that remark as I proceed. Apparently to this Government, the morality of the tax is not judged on its equity, justice or effect; if it brings in a lot of money, the Government says it is a good tax. The more money a tax brings in, apparently the better the tax. I reject absolutely that measure of morality. In his second reading speech, the Minister said that the Government has not yielded and will not yield to pressures to alter the basic structures and principles of the tax. In other words, the Government is hypnotised and misled by its own spurious arguments, its own faulty mathematics and it lack of concern about what has happened to small business in Australia. This legislation has done nothing to remedy the quite unfair and unreasonable provisions that the tax is paid by the employer and not by the recipient of the benefit. It does nothing to alleviate the quite unreasonable situation where the employer has to pay this tax, regardless of whether he makes a profit. Like payroll tax, this tax, therefore, is indefensible. How can there be justification for a tax on industry or business without profitability? There is no surer way to destroy or bankrupt a business than to apply a law of taxation such as that. The Minister's boast that the revenue reaped upheld the justice and rationale of the fringe benefits tax imposition must fail on that reason alone. It has levied an additional cost on business already struggling under escalating labour costs, also encouraged by this Government, under excessive regulation, and already punitive taxation. The revenue announcement is but one side of the equation; it takes no account of businesses destroyed, jobs lost and further massive costs to business in paper work and unproductive time spent in the calculation and remission of this stupid tax. These facts illustrate very clearly the absolute nonsense in the Minister's claim in his second reading speech that: Results demonstrate forcibly the merit of the Government's actions. In fact, if the Government ceased for a little while from courting big business magnates and had a look at the way small business in Australia has been sold out, it might begin to see the awful cost of its actions. I shall refer to some of the so-called amendments. The clauses dealing with substantiation requirements, car rules, are too little, too late. Certainly, there was never such a ridiculous farce witnessed in this country than that resulting from the Government's requirement that every time the car's wheels turned, every inch of progress had to be entered into a log book, every action on the trip carefully dissected to show whether it was business or personal. Every entry had to be signed. No wonder there was an uproar! It was not only a farce; it was also totally impractical. Added to that, every litre or petrol or squirt from the grease gun had to have an invoice and receipt by way of substantiation. If we are worried by some of the antics of some of the Australian Taxation office auditors now, what a glorious field of opportunity that would open up! I shall refer to the amendments proposed in the Bill and honourable members will very quickly see that they do little or nothing to rectify the situation. The Bill requires the maintenance of the ridiculous log book for a continuous period of 12 weeks. I suppose that is at least better than 52 weeks. Mr McVeigh —Not much. Mr ADERMANN —That is right. However, if that particular 12 weeks shows a greater than usual proportion of private running, the percentage allowable as business running, even though it subsequently increases, is denied because the legislation provides specifically that `the nominated percentage of business use must not be greater than the percentage established in the log book period'. Therefore, the old notional principle applies again. In fact, the provision for a 12-week log record can just as easily penalise as relieve. Also, it is incumbent on the motorist to be able to show, if the taxation auditors require-and they certainly will-that, in subsequent periods and years, there has not been a substantial reduction in the proportion of business use. How on earth can one ascertain which 12 weeks to choose? Every businessman knows, but apparently neither the bureaucrats nor the Government understand, that a businessman's year does not amble along in a uniform, unchanging, day by day fashion. There are periods of the year when special sales opportunities exist and, hence, special activities. There are quiet periods when sales are minimal and sales activity is reduced. There are holiday periods, periods of activity and periods of relative quiet, yet this Government thinks it has pulled a rabbit out of the hat with its grand 12-week log manifesto. What happens when the tax auditor comes along and alleges that the 12-week record is not an appropriate indication of the total usage of a vehicle? Have Government members ever seen a tax audit or seen some of the assumptions made by auditors? Believe me, they can dream up any hairy hypothesis, and unless the taxpayer can disprove absolutely every such proposition, he is adjudged guilty and not only must he pay tax-which possibly he should not have to pay-but penalties as well. It is a result of years of experience in the field of taxation and having seen many such audits of constituents and clients that I tell this Parliament that the tax auditors will have a field day in the business of substantiation. The 12-week rule will not remedy that; in all probability, it will exacerbate it. Thus far I have chosen just one amendment to illustrate the total nonsense of this tax, the nonsense of the Government's claims about this tax and the nonsense about the proposition that this Bill will make it any more defensible or just. Let us look at just a few of the other trivial matters contained in the Bill. The Bill will exempt from tax the use of an employer's business equipment on a non-working day or when it is used away from the employer's business premises. That grand announcement was made on 29 October 1986. There is only one reason for that exemption-its policing would be absolutely impossible; so it is pretty nonsensical to claim that it is any sort of concession. It will also exempt benefits in respect of travel costs incurred in attending job interviews. In the light of all the Government has said about helping people to find jobs, it was an absolute contradiction to have even contemplated imposing a fringe benefits tax in respect of travel incurred in going to job interviews. What a grand gesture it is to exempt motor vehicle parking benefits! The truth is that the Government showed unmitigated gall in taxing them in the first place. And so it goes on. They are not concessions but clumsy attempts to remedy the bumbling results of its iniquitous legislation. Otherwise, why should it belatedly in this Bill have to legislate to exempt compensation for work related injuries which never should have been caught up in the first place? By the same token, how deficient the parent legislation was when the Government now in this Bill has to specifically exempt medical services provided on the work site. Whose bright idea was it that that represented a fringe benefit? Belatedly, too, the Government seems to be beginning to comprehend how the parent legislation fell disastrously on voluntary, charity and counselling organisations, schools and church institutions, because there are one or two fiddly little amendments designed to placate the dismay in the community. For example, the Government has now decided to exempt accommodation and food provided for live-in domestic employees in religious houses and accommodation and food provided for live-in help employed to care for elderly or disadvantaged persons. What an indictment of an avaricious government, its total lack of understanding or compassion and its sloppy, ill-conceived legislation that we should now have to witness this amendment Bill exempting things that should never have been caught up in the first place. Let me deal with another amendment in this Bill. It evidences how little the Government knows or cares about the Australia that exists beyond the boundaries of Sydney, Melbourne, Newcastle, Wollongong and Canberra. These vast areas encompass many Australians living in remote and difficult areas who provide much of the wealth and contribute greatly to the standard of living of urban Australians. So this Government, to reward them for their sacrifice, their difficulty and their contribution, slaps a fringe benefits tax on remote area allowances, on their housing, on their travel, on their holiday provisions. What measure of justice was that? They already pay additional taxes-sales tax on freight, among others. Fuel costs them $1 a litre, and so on. Yet the Government sees them as just the right milking cow to provide the cream called fringe benefits tax. Are these the tax cheats the Government prattles on about? That is where most of the tax comes from. Are these the tax cheats? This legislation makes a grand gesture: it increases the discount of the value of the market rental of remote area housing 40 per cent to 50 per cent! If ever I have seen a bureaucratic formula dreamed up in a Canberra department to design a fringe benefits tax, an amendment on remote area allowances, we have it there. If ever I have seen a mechanism absolutely divorced from and unrelated to reality or reason, there it is. Let me tell the House why it will not work despite the band-aids in this Bill. When this tax was first implemented two young men came into my office. They represented perhaps hundreds of others in the same position. They used to work in western Queensland on a property. Their employer, battling drought, debt and falling prices and rising costs, called them in and said, `I've now got to pay tax on the accommodation I provide, the beef you eat and the other facilities I provide to enable you to work here. I'm broke. I'm working my property at a loss. I just cannot pay this tax. You just have to go. Goodness knows how, but I've got to try to survive. Until we either drop or can get out of it my wife and I have to manage the property on our own'. How many jobs did that cost? How many farmers and graziers from outback Australia are sent to the wall as a result of this bureaucratic brainstorm? Mr Simmons —That's rubbish. Mr ADERMANN —Is that right? The people of western Queensland will be glad to hear that the honourable member for Calare said that. How many farmers and graziers in outback Australia have been sent to the wall as a result of that bureaucratic brainstorm? This Bill brings in some alleged amendments which leave the injustice unresolved and which show that those opposite know as little and care as little about remote Australia as they ever did. I have shown from the amendments how far from reality this Government is with this legislation. The Opposition has promised that when it returns to the treasury bench these iniquitous taxes will be absolutely abolished. Government member after Government member will get up on that side of the House to voice their trite cliches about tax cheats and how wonderfully they have dealt with them. They will prattle on without a thought to what they have done to small business, the jobs they have destroyed, the havoc they have caused among honest, hard working taxpayers. They will continue the bombast. They will fool nobody but themselves because they are completely oblivious of the fact that they are hitting the wrong targets, that the big fish in no way discomfited, but that a host of small businesses are sinking into the deep because of the regulation, the bungling and the bureaucratic interference which is the hallmark of this Government. Mr McVeigh —They are going bankrupt. Mr ADERMANN —They are going bankrupt by the dozens. Every time members from the Government side praise this legislation they will confirm that the parent legislation was ill advised, faulty, unfair and unwarranted. They will be tacitly admitting that it was so ill conceived that it caught into its mesh charities, churches, compensation recipients and a host of people whom they so cavalierly included in their spectrum of tax cheats. They will be displaying their complete ignorance of the operation of small business and their complete lack of concern about what happens to it. This legislation purports to rectify some of the unintended effects of the fringe benefits legislation. I have illustrated very clearly that it utterly fails in that objective. It leaves untouched a myriad of other inequities and anomalies. The Government will never address them while it harvests such massive revenue. The Government does not care much who pays. It does not care how fair or just it is. The incidence of this tax is unfair, unreasonable and unjust. This legislation with its pitiful band-aids cannot redeem a tax which is flawed, wrong and indefensible in the first place. It fails absolutely. It exposes even more clearly than any other legislation the ineptitude of this Government. The attempts to justify the whole fumbling exercise only serve to further emphasise that fact. The sooner this Government is dismissed and the fringe benefits tax, the capital gains tax, the assets test and the machinations to introduce wealth and death taxes are all consigned to the rubbish bin of history, the better off this nation will be. Then and only then will small business have a chance to survive and prosper and the small hard working entrepreneur and taxpayer will have a chance of getting out from under the mass of regulation and the heavy hand of an ever-increasingly officious taxation regime. Mr SIMMONS(Calare)(8.47) —I wish to confine my remarks tonight to the Taxation Laws Amendment (Fringe Benefits and Substantiation) Bill, which gives effect to the two concessional changes to the Fringe Benefits Tax Assessment Act 1986 and the Income Tax Assessment Act 1936 which were announced on 26 August and 29 October last year. These changes were recommended following the Government's quite responsible monitoring of the effects of the fringe benefits tax and the new substantiation rules which commenced on 1 July last year. To its credit, in introducing the fringe benefits tax the Government drafted legislation that would, as far as possible, eliminate the tax avoidance being exercised through the use of non-cash benefits. However, this Government, in my view wisely, also recognises that there should be some genuine exceptions in the application of this tax-thus the reason for this amendment Bill. We have had the opportunity to see the legislation in operation and to consider the effect it has had on various groups and, accordingly, to make our alterations. There are some on the other side of this House who would like to have seen a far weaker type of fringe benefits tax legislation or, to their shame, no fringe benefits tax at all. They would like to have seen it drafted full of loopholes that their friends in high places could manipulate so as to continue to avoid their taxation responsibilities. The legislation that the Government formulated was successful in throwing a net over all those employers who reduced their wages payouts by the proffering of non-cash benefits. However, this Government recognises that there are some others who were caught in the net and who, for many reasons of fairness or, indeed, compassion, should be allowed to continue to receive some benefits in limited circumstances-and I stress that they are very limited circumstances. Some of the exemptions from the tax which I am talking about include occupational health and counselling benefits, the benefits of small value which are infrequently provided and/or are difficult to record and value, and medical services provided in work site medical facilities that are operated principally for the treatment of work related injuries. A number of concessions have been made to the existing provisions of the legislation. I will enumerate just a few. These include an increase from 40 to 50 per cent for the discount on remote area housing. Mr Robert Brown —They are going to oppose it. Mr SIMMONS —I am very surprised, given the comments of the previous speaker in the debate, the honourable member for Fairfax (Mr Adermann), that the Opposition somehow or other opposes that very generous concession-an increase of 25 per cent in the allowable discount that was originally made in the principal Act. The Government will exempt education costs met by employers for children of employees posted overseas for the period of the employees' overseas service. The legislation also includes a provision to increase the annual exemption per employee of in-house fringe benefits to $500 and provides that appropriate petty cash entries rather than receipts-I am sure this will be of great interest to many members of this Parliament-will now be acceptable proof of business expenses that are not capable of being readily evidenced by receipts. In my view, these are all very fair and quite reasonable amendments to the existing laws and certainly deserve the support of honourable members on both sides of this House. We should not have to put up with some of the quite disparaging comments that we have heard in this debate so far. However, it is difficult to assume anything about how the Opposition stands on a particular issue; it seems to change its position very often indeed. No more has this been the case than in the public debate that we have seen in Australia on the question of the fringe benefits tax. In an article in the Sydney Morning Herald of 30 August 1986 headed `Libs about face on fringe benefits tax', Milton Cockburn reports that the Leader of the Opposition would repeal the fringe benefits tax if he gained office. I quote from that article: Until yesterday, Mr Howard had refused to commit himself on whether a future Coalition government would repeal the Fringe Benefits Tax, saying no decision would be made until the Opposition announced its own tax policy. What on earth could that statement mean except that the Opposition was considering a similar kind of tax itself, as Mr Valder quite clearly indicated on that now famous-or infamous-videotape that we have heard talked about in this chamber from time to time. Just prior to the last election the Leader of the Opposition (Mr Howard) was quite fond of saying that the Liberal Party of Australia would abolish the fringe benefits tax `lock, stock and barrel'. Of course, when the Liberal Party tax policy was finally released, it quoted a cost of $250m for the abolition of the fringe benefits tax. Mr Gear —Shoddy mathematics. Mr SIMMONS —That was certainly a very shoddy piece of mathematics indeed, as my friend the honourable member for Canning notes. By the way, we all know the inaccuracy of the Opposition's tax cuts estimate, which was a major source of embarrassment for it and particularly for the then shadow Treasurer during the election campaign. I would like to point out that there would have been an even greater expenditure blowout than that which was publicised, because the amount raised by the tax in the 1986-87 financial year was actually $535m and the amount in the 1987-88 financial year would therefore have been much greater than the Opposition's estimate of $250m. Of course, the honourable member for Fairfax decried the fact that the Government had increased revenue by this amount. That demonstrates that quite obviously the Government's estimates were quite inaccurate. In other words, there were more rorts and ramps in fringe benefits than this Government obviously believed. By 26 June of this year the Leader of the Opposition had changed his position again. Gone were the statements of `lock, stock and barrel'. The Australian Financial Review of 26 June reported him as saying: We will abolish Labor's Capital Gains Tax, Labor's Assets Test Labor's Fringe Benefits Tax (but ensure that abuses do not occur). This last bit of prevarication on the part of the Opposition is the beginning of a definite change of heart and is typical of its rather unprincipled teetering on some of the important points of this legislation. In the course of the election campaign it became clear that the Liberal Party would not abolish the fringe benefits tax at all, but would simply change the basis on which it is paid-that is, who pays it. It finally recognised that its chief supporters-the many loud small business people throughout Australia, the decibel democrats of this country-were not really against the principle of the tax, merely the fact that they had to pay it, rather than the honest pay as you earn (PAYE) taxpayers of Australia. It seemed that we were in agreement about the need for a tax to ensure that abuses do not occur. The fringe benefits tax has been one important means through which we have at last broadened the tax base throughout Australia and relieved the enormous burden that PAYE taxpayers have had to shoulder for many years. As you would be aware, Mr Deputy Speaker, the Income Tax Assessment Act already has a clause through which employers are supposed to deduct from the PAYE instalments their employees' taxation for non-cash benefits. The employers have always chosen to ignore this taxation responsibility for the one clear reason-it was too difficult. They would have had to calculate the non-cash benefit value every pay period-every week or fortnight-and then deduct the tax according to the employee's marginal taxation rate. Quite obviously, in order to ensure that the non-cash benefits were taxed and that the process was made as simple as possible, a separate tax was necessary, levied on the employer. This, of course, led to gigantic screams from the employers. But what new tax has not caused protests? However, there is one more matter of equity which vindicates the fairness of levying the tax on the employers-employers have long benefited by the payment of non-cash benefits to their employees. For example, an employer can obtain the services of an executive worth $110,000 for $80,000 by the negotiation of a package along these lines: taxable income of $60,000 and non-cash benefits of $20,000. Prior to the recent changes in the marginal taxation rates, the executive would have paid 60c in the dollar on his taxable income. If the employer were to top this up with a further $20,000 after tax, it would have cost him $50,000 without the use of fringe benefits. In other words, the $30,000 difference represents a charge against the taxpayer who has been subsidising the company to employ that executive. As average PAYE taxpayers have indicated to me on a number of occasions, they found that quite repugnant. I think that most fair-minded people in this chamber would agree. Mr Robert Brown —All on this side. Mr SIMMONS —Absolutely. People who believe in fairness and equity in the taxation system are confined to the Government side of the House. Our time is limited during the debate tonight, but I would like to say that the Labor Government was given a very clear mandate for taxation reform as a result of the 1984 election. It has introduced measures to improve the fairness of the taxation system and to close up some of the rorts and ramps which the previous coalition Government had encouraged and, indeed, allowed to flourish. The legislation that we are debating tonight is designed to make certain exemptions to the fringe benefits tax and substantiation rules. It further demonstrates this Government's desire to make the taxation system as fair as possible and finally get things right for the vast majority of PAYE taxpayers. Mr ROCHER(Curtin)(9.00) —I shall address my remarks exclusively to the Taxation Laws Amendment Bill (No. 4) and express regret that time will not permit me to speak on the Taxation Laws Amendment (Fringe Benefits and Substantiation) Bill. Overall, there is little to quibble about in this Bill, in the sense that its provisions seem to match the Government's stated objectives. That is not to say that the intentions are in every way wise. However, having with good reason in the recent past criticised sloppy draftsmanship in tax legislation brought before the House, it should be said that sloppiness in drafting is not evident this time. It should not go unremarked, however, that some of the proposed amendments should not have been necessary-and would not have been necessary-if it were not for the woolly thinking of the Government in general and the Treasurer (Mr Keating) in particular. The much-heralded abandonment of negative gearing provisions should never have been necessary in the first place. It was as plain as the nose on the Treasurer's face that the consequences of that piece of political chicanery would have precisely the effects that it did have. Moreover, the coalition parties told the Government exactly what would and did happen when the original legislation was debated in this Parliament. As always, the Treasurer knew best and arrogantly dismissed all argument contrary to his expressed and somewhat jaundiced views. His acolytes on the back bench encouraged the Treasurer then, and it is amusing to see how they rationalised their stupidity in debate on the climb-down in this Bill involving the reintroduction of negative gearing provisions. The rapid distortion of domestic rental markets in the form of outrageous rent increases all around the country has forced the change on this unthinking Government. The likelihood that rents will ever fall to levels of a couple of years ago is very remote indeed. Because of the unthinking, uncaring attitude of this Government in the first place it is unlikely that rents will ever fall to the levels they were before the Government embarked on that piece of stupidity. That will be one outcome of the ill conceived decision to outlaw negative gearing in the first place, which in turn flowed from the know-it-all arrogance of the Treasurer. As if to hide the Government's shame and embarrassment, it resorts to contradictions in a lame attempt to excuse its lamentable lack of foresight and understanding. The Minister Assisting the Treasurer (Mr Holding) in his second reading speech had this to say of the removal from the Act of provisions known for the sake of convenience as negative gearing provisions: This measure has been made possible only- and I repeat the word `only'- as a result of the Government's comprehensive tax reform program. Yet when the Minister comes to talk in the very same speech about allowable deductions for capital expenditure on new income producing buildings, he says something entirely different. Under another heading, he said that the reduced deduction for capital expenditure: . . . is complementary to the Government's restoration of full tax deductibility of interest on rental property borrowings. For the uninitiated, tax deductibility of interest on rental property borrowings is the essential ingredient to negative gearing. So it is, then, that this particular example of Hawkespeak says that readoption of negative gearing for tax purposes is possible on the one hand because of the Government's total approach to taxation, and on the other hand was necessarily offset against revenue from another otherwise unrelated measure to amend the Act. The two measures in the same Bill appear to be complementary. That excludes the argument that it is part of a comprehensive tax policy. Where does that leave the nonsensical argument about the Government's laughably claimed comprehensive tax program? Plainly, such a claim is unsubstantiated and the Government would be better off if it were to drop it. Any pretence to a comprehensive tax program went out the window when the Treasurer's preferred option C was torpedoed at the National Taxation Summit in 1985 by the Prime Minister (Mr Hawke). Since then the approach to tax has been, at best, piecemeal and, more accurately, it has been chaotic. Above all, it has been predicated on the inescapable need to raise more and more revenue to finance bigger, expansive and more interventionist government under this so-called administration. In its claims the Government sets out to confuse comprehensiveness with volume. The truth is that while it has added literally hundreds of pages to the Income Tax Assessment Act and related Acts, the outcome is not even coherent tax laws, let alone a comprehensive tax package. The Bill we are debating adds a mere 126 pages of law to the principal Act of nearly 2,000 pages. But there is more to it than that. There is much more than a suggestion that tax law is being made deliberately complex. Many contend-and I agree-that it is deliberately written to make it too hard to follow and understand. Whether over the past several years the Government has been a willing partner or simply the unwitting tool of the bureaucracy, it is not possible for me to say. The common thread which leads me to speculate in that way is to be found in a combination of increased discretionary power conferred by law on the Commissioner of Taxation and imprecision in the wording of recent amendments. It suggests a clear intention. That intention is to give the Commissioner, and by delegation to the entire Australian Taxation Office (ATO), decision-making powers at the expense of those they were once expected to assist and to serve. The advantages to the ATO are many. By not being bound by law as it is written, by exercising discretion, by resorting to rulings rather than law, by falling back on its so-called informal practices, the ATO makes life so much easier for itself. The uncertainty and consequential costs thereby imposed on taxpayers and practitioners are, as a consequence, consigned to the trash can of its unconcern. As the compliant but possibly unwitting partner in the ploy, the Government boasts of a comprehensive tax package. In all reality, it presides over a comprehensive mess. To the extent that the comprehensive mess of tax law has grown under this Government's stewardship, the Government and the Treasurer only have the defence of their own ignorance. To the extent that taxpayers cannot know their obligations in advance, the Government deserves the strongest possible condemnation. On a slightly different tack, some comment is warranted on provisions in the Bill which are designed to attack what are described as thin capitalisation measures. On the face of it, the objectives are both unexceptional and unobjectionable. However, to achieve the stated objectives it is necessary that there be arbitrary judgments made about what is an appropriate balance between the debt and equity of foreign investors in the Australian component of their income-producing operations. Involving as it does a judgment about an appropriate balance, it is possible to quibble, but equally possible not to do so. I shall take the latter course. However, the level of equity as it is defined and is to be applied could result in unfairness. Given that some forms of foreign investment involve the parent company supplying and invoicing Australian subsidiaries for goods for resale, there arises the question of treatment of outstanding debts by the subsidiary to its parent. If at the end of a tax year an Australian subsidiary owes its overseas parent for goods supplied for normal local trading purposes, the amount of that indebtedness will become equity, thereby increasing the subsidiary's taxes. Unless changing hitherto normal invoicing practices will overcome a probably unintended but nevertheless real imposition, the definition of equity has an unreasonable application. It is not going too far to say that `equity' is redefined in this Bill. Another unintended consequence of amendments which seek to grapple with the tax minimisation effects of thin capital measures hitherto does not appear even to have been considered. It is foreign investors that are being targeted. Only recently we witnessed Senator Walsh lamenting an absence of domestic savings in Australia. Without adequate private savings, so the story goes, wealth generating domestic investment cannot be maximised. There is merit in that proposition. Given the example of profligate spending set by the Government and its high taxing of personal incomes, which reduces the take home pay and therefore the discretionary spending power of individuals, there is unlikely to be any increase in the levels of private savings in the foreseeable future. Therefore, that source of funds for greater business investment simply will not materialise. Under the circumstances it must be at least doubtful that we should put new disincentives in the way of foreign investment as we do in this Bill. If this legislation has the probably unintended consequence of inhibiting foreign investors, either existing or potential, it might be undesirable because of its detrimental effects on our overall economic performance. If, for example, it discourages high risk investment in mineral or oil exploration, as it has the potential to do, it will be a great disservice to this country. These possibilities do not appear even to have been considered by the Government. They certainly get no mention in either the Minister's second reading speech or supporting documentation. With the current obsession of the Government to squeeze every ounce of tax blood out of an increasingly shrinking stone of taxable income of all descriptions, many unintended consequences escape the tunnel vision of the Treasurer. If attacking thin capital measures discourages foreign investors, it also has implications for our balance of payments on the current account. Heaven knows our deficits are already abominable. We see and read of the spectacle of the Prime Minister only today preening himself and congratulating his Government on achieving a monthly deficit of $1.2 billion. All of a sudden a deficit in one month of $1,200m is a matter of pride. I venture to suggest that if there had been a current account deficit of $1.2 billion in any year-let alone a month-under the previous coalition Government the authors of our present balance of payments crisis would have been running around like headless chooks, screaming that the sky was going to fall in. Instead, with the fawning support of some in the political and financial Press, a $1.2 billion deficit in one month is a mere bagatelle and the future is somehow rosy. Collectively, the media will overlook the fact that the latest published monthly deficit is influenced favourably by an increase of $105m in wool sales and $68m in the export value of petroleum products. That the first of these increases, due both to better prices and to the volume of sales of wool, is likely to be short-lived matters not to this Government, it seems. Equally, it matters not that the export of scarce petroleum products will prove to be just as much a burden on our children as is the Government's component of our international indebtedness. It needs to be repeated that if attacking thin capital measures means a drop in future foreign investment we will rue the day. It is to be sincerely hoped that artists, sports men and sports women and others do not rue the day that the averaging of their incomes become part of our tax law as is proposed in these measures. Tax averaging is proposed for the specialist incomes of artists, composers, inventors, performers, production associates and writers. In other words, a select few will be able to smooth out their tax obligations because their fluctuating incomes lead them to pay tax at varying marginal rates as things stand at present. Good luck to them, but others may not be able to influence public opinion in favour of the Government in the way that they are and who are deserving of equal consideration. However, all that aside, the averaging of taxable incomes over a number of tax periods has its pitfalls for beneficiaries. What can happen is that those in the favoured occupations can be placed in the position of having to pay maximum tax in the years they can least afford it. That will invariably be the case as an individual's income starts to taper off, say, towards the end of a career in one of the categories I have mentioned. It is doubtful whether averaging of tax incomes does much of a service to those whose earnings are essentially earned from personal individual effort. The only reason it has any attraction whatsoever is that it avoids the inherent penalty in a particular year that accrues from an exceptionally and extraordinarily high taxable income. Unindexed, graduated tax scales are the problem, not fluctuating taxable incomes. Averaging puts those who may think they can take advantage of it at risk in more than one way. Those confident of a return of a coalition government at the next election may properly take the view that relief from high personal tax will remove their risk. Others, prepared to support again an Australian Labor Party regime, will probably find that averaged income from previous years will nevertheless see them paying tax at higher marginal rates. This Bill is better drafted to meet its stated objectives than any other tax Bill we have had to deal with for some considerable time. I compliment the draftsman. If this is the outcome of repeated criticism from me and my coalition colleagues we can all be grateful. It does us no harm to acknowledge our gratitude. However, that does not mean that the Bill's objectives are sensible or that their consequences have been thought through. Tonight I have demonstrated some areas where the consequences have not been thought through. I hope that we do not regret this in the not too distant future. Mr GEAR(Canning)(9.18) —We have just heard another uninspiring speech from the Opposition. I am always amused by a few of the points the honourable member for Curtin (Mr Rocher) consistently makes. I think he reads the same speech every time. He goes on about high tax, using emotive terms like `squeezing more tax out of the system'. For his benefit I will refer to a chart put out by the Organisation for Economic Co-operation and Development giving the revenue statistics of OECD member countries. It makes very interesting reading. If we are such a high taxing country, why do we rank eighteenth of the 23 OECD countries in terms of our total tax take? Why do we rank so low? Mr Rocher —Where are we on the scale of living in the same group? We are 21 out of 22. Mr GEAR —The highest taxing country is Sweden, with 50.46 per cent of its gross domestic product taken in taxation. Sweden is the country that sells us Volvo cars and other manufactured products. It is an industrialised country. Australia takes 30.21 per cent of its gross domestic product in taxation, virtually the same as the United States, which takes 30 per cent in taxation. There is not much difference. So when the honourable member talks about high taxes he should tell the whole story and not just part of it. If high taxes led to a much better economy or even to a higher standard of living one could understand it but it is not true. The lowest taxing country is Turkey. If the Opposition wants Turkey's tax rates, social security provisions, police force and police enforcement, the Opposition can advocate for them. If it does so, the Opposition will come a gutser like it did at the last election with its taxation policy which was full of holes. The Opposition did not fool anyone. The Bill before the House today deals with the fringe benefits tax (FBT). It is interesting that it still has not dawned on the Opposition that the fight is over. Out in voterland, people accept the FBT and the reason is that they know the tax is fair. They know that what the Opposition said about the tax while the Government was trying to introduce it was wrong. I shall deal with a few of the Opposition's predictions a little later. One has only to read the Australian Financial Review of 27 May 1986-- Mr Rocher —Not Greg Hywood? Mr GEAR —No, not Greg Hywood. The editorial of the leading financial newspaper in the country said the following about FBT: It is necessary to both broaden the income base and reduce inequity in the current tax system. That is the whole reason behind the tax. The editorial went one step further, and it bears listening to: A simple example illustrates this problem. Three taxpayers, A, B and C all earn $80,000 a year. Taxpayer A has a salary package which provides 50 per cent of his salary in fringe benefits difficult to tax. Taxpayer B, on the other hand, receives fringe benefits of $20,000. Taxpayer C receives no fringe benefits whatsoever. On 1983-84 income tax rates, and assuming no other income or deductions, average tax rates will be20.2 . . . for the guy with all the fringe benefits. Mr Rocher —What about someone on $30,000? Mr GEAR —Someone on $30,000 was not into the fringe benefits. The editorial goes on to make the point that the average tax rate is 33.1 per cent for the person who takes part of his income in fringe benefits and 48.1 per cent for the person who receives no fringe benefits. Honourable members can see the different rates of taxation that applied when fringe benefits were not taxed. The editorial continued: Clearly, extensive use of fringe benefits has created all sorts of problems for tax policy. What did the previous Liberal Government do about the extensive use of fringe benefits? It did absolutely nothing, because it was not interested in establishing a fair taxation system. The honourable member for Curtin spoke about high tax rates. For the whole time Mr Howard was Treasurer the top tax rate remained at 60c and when the Liberal Party was kicked out of office it was still 60c. It is now 49c. The bottom tax rate for the whole of the time John Howard was Treasurer was 30c and now it is down to 24c. When honourable members opposite had a chance to do something, they did nothing. Honourable members on this side of the chamber act. We do not talk about it. Honourable members opposite are great in opposition. Members of the Opposition are gunnas-they are gunna do this and they are gunna do that. The only time they intend doing anything is when they are in opposition; they never did anything in government. It was up to the Australian Labor Party in government to put some decency back into the system. The Australian published a letter from a pay as you earn taxpayer, a Mr Phil Collins, branch president of the Federated Clerks Union, Melbourne. It was a good letter in which Mr Collins hits the matter on the head. Mr Rocher —You need it. Mr GEAR —The honourable member for Curtin is off. When one talks about fairness, that is the best way to get rid of Liberal Party members. Mr Phil Collins said: You see, our members receive a salary and that is all. Fringe benefits, while more widespread than the artificial schemes of the recent past, will never become available to our members. Mr Collins is talking about members of the Federated Clerks Union. Of course, they will not. They were never into the fringe benefits. No wonder the screams were heard from the Bob Ansetts and the well to do in the community. It is no wonder, because they knew that once that tax was put into place, they would have to start paying their fair share of tax, and they are. I shall now deal with some of the predictions made by the Opposition not only on FBT but also on other matters. In September 1983, when the Government introduced the withholding tax, the Opposition made predictions that industry would collapse. The prediction was that it would be the end of the building industry as we knew it. The building industry is in the best shape that it has ever been in. The housing starts, particularly two years ago, showed a record and they are stabilising at a record which can only be dreamed about by members of the Opposition. Members of the Opposition also made predictions about business lunches when we started saying that perhaps they were not all legitimate. Perhaps the missus was being taken out to a restaurant at night and that expense was being booked up to the taxpayers. In many cases they may have been sitting next to a pensioner who was paying 100c in the dollar on his bill, while the other person may not have been paying anything at all or at least less than 50c in the dollar. They are the sorts of rorts in the system that the Government had to get rid of and the actions of the Government on those rorts are being constantly opposed by the Opposition. It has the gall to say that, if the people of Australia were ever mad enough to put the Liberal Party back into government, it would get rid of the taxes. They would be crazy to put the Liberal Party back into government. The Liberal Party was hopeless when it was in government and some of the statements members of the Opposition made about the repeals it would make, such as the capital gains tax, cannot be believed. Members of the Opposition said that it would be the end of life as we knew it if a capital gains tax was introduced. We have a capital gains tax and what is more it is bringing in substantial amounts of revenue. We hear from the President of the Liberal Party, John Elliott, that he wants a $3 billion Budget surplus. Little Johnny Howard is also talking about cutting the Budget deficit by $5 billion or $6 billion. The two add up to about a $9 billion or $10 billion cut in Budget outlays. I should like to know where that money is to come from. The Opposition wants to get rid of all these measures as well. Not everyone out in industry views the FBT in the same negative way. Albert Smith, writing for the Australian Financial Review of 17 June 1986, said: The fringe tax also legitimises a whole range of benefits, which otherwise would have rendered the recipient liable for income tax on the value of the benefits. This is the big plus of the new tax, in that it removes the taint of dishonesty and malpractice from many common benefits. So it did. For the first time the Government legitimised fringe benefits. Let us have a look at some of the fringe benefits. In appendix 3 of the Budget Papers of last year, it is shown that fringe benefits taxation revenue was twice as much as the Government anticipated. It gives one an idea of the rorts in the system. By and large, as one would expect, the biggest rort of all was on motor vehicles. In this financial year $247.3m in tax was not being paid. It was a private fringe benefit given to some employees by their employers. We all know who took up the slack. The people who took up the slack were the good old pay as you earn taxpayers. The second biggest rort in fringe benefits was low interest loans. Taxation on low interest loans brought in $87.3m this financial year. Once again, cheap loans were made to people at the top who did not really need them because of their higher salaries. The worker on $300 a week, who could never hope to get a low interest loan, subsidised that higher income taxpayer. It was grossly unfair. Taxation on expense payments brought in $58.8m this financial year, and this means being paid by the honest taxpayer. Taxation on housing brought in $49.6m; board brought in $8.5m; living away from home allowances brought in $8.4m; airline transport, which covered the overseas trip or the trip to the Gold Coast, brought in $3.4m and property, goods, which often involves people-usually executives-actually buying goods from shops, brought in $6m. At one time the taxpayers of Australia had to pick up that payment but not now because the FBT is in place and doing the job. The total revenue gained from fringe benefit taxation for last financial year was $535.2m, yet the Opposition is still saying that it will get rid of that tax. Once one starts talking about fairness, one brings out all the old dopes. The Australian of 24 May 1986 dealt with the FBT. As one would anticipate, if a bit of fairness is in the air, Sir Joh will be there. The headline is `Sir Joh claims leadership of growing national rebellion against perks tax'. The article said: Sir Joh moved to forge strong public links with the rebels with an appeal to all Australians to join the revolt. He called for all Australians to join the revolt. Never mind the fact that these people are skating through the system on other people's backs. According to the Premier of Queensland, one has to `join the revolt' and say that one does not want to benefit from the tax that will be collected from the cheats. Sir Joh wants us to fight the tax. We will pay more tax so that the cheats can go skating overseas, get low interest loans and everything else. That shows the audacity of these people. The Opposition is still talking about the fact that it will abolish the FBT, capital gains tax, substantiation and all those rorts. That makes one wonder about the intelligence of members of the Opposition. No wonder they are sitting on the Opposition side of the House. Honourable members opposite really are a hopeless mob. They look terrible. If they have a policy, it does not stand up to scrutiny. They have no integrity when they talk about getting rid of the fairness provisions we have introduced. The honourable member for Curtin talked about increasing taxes all the time and about new taxes, as though we were increasing taxation. All the proceeds of the fringe benefits tax were not kept by the Government. They were part of the total tax cut of $4,500m that this Government brought in when it lowered those tax rates. So we did not keep one cent of it. The whole exercise, apart from bringing fairness and equity back into the system, was about broadening the tax base so that those people who never paid taxes in the past started paying them. In conclusion, all I can say is that the longer we keep that tax in place the harder it will be for any Opposition to change it. I am quite proud of the record of this Government. I am proud to be a part of it. At least we have put some integrity back into the taxation system. I know that we will be in government for a long time to come. If honourable members opposite ever get back into government this Bill, as well as all the other measures we have taken, will be part of the furniture and there is no way that they will ever be able to change them. Mr DOWNER(Mayo)(9.32) —Those people who are listening to this debate will unfortunately only have their worst views of politicians confirmed by the last speech they had to listen to. It was the sort of party political badinage that really brings the Parliament into disrepute, if I may say so. These debates about taxation issues are important to the future of Australia and to the welfare of our community and when they are being debated the community deserves at least a decent and intelligible discussion about those issues. Certainly, for my part, I am very happy to be able to participate in this debate and to acknowledge that in these pieces of legislation that have been brought before the House today the Government has actually done something positive in terms of the taxation burden which rests on the backs of all Australians. It has made some amendments-one of them an important one-to the 19 September 1985 tax package introduced by the Treasurer (Mr Keating). Of course, I am disappointed that the Government had acknowledged so little of the failures of this tax package and has not made the widespread changes that ought to be made to it. Certainly in the light of the economic crisis that Australia and other parts of the world now face following the collapse of the share market, there is all the more reason why we in this country should be taking further and more decisive action to make our economy, particularly the manufacturing and services parts of it, all the more competitive. There are now predictions, which are almost universally accepted in the United States, Britain, West Germany and Japan, that global growth will be one per cent lower next year than was anticipated even at the time when the Federal Budget was first introduced. That lower global growth will mean lower commodity prices and that will have a very real bearing on the effectiveness and strength of the Australian economy. It clearly will have very serious ramifications for our balance of payments, which is already in a very serious state of decline. It worries me that the Government that is at the moment administering the affairs of this country should be heading in the wrong direction in general with its taxation policy. One of the measures in this package that is being introduced today helps to raise the taxation burden. But so much of that great burden that has been introduced since 1983 still remains. Great play is made by speakers on the other side of the House, by the Australian Labor Party, that the Fraser Government was apparently not a successful government. But I think people listening to this debate should weigh in their minds very carefully the fact that, if the average tax rate that was being levied under the Fraser Government at the time it was evicted from office remained today, Australians would be paying $16,000m less in tax per annum. That is an enormous difference in the burden that rests on the shoulders of ordinary Australians. Since March 1983 this Government has raised an extra $34,000m in tax, $5,900m in this financial year alone. Since September 1985, when this tax package was first introduced, the Government has raised an extra $18,500m. What put the lie to the comment the previous speaker was making is that, whilst it is true that the Government has returned some of that money to Australian taxpayers-he used the figure of $4,500m-the net effect is still that Australians are some $14,000m worse off since the introduction of the September 1985 tax package. That should not be forgotten and is not being forgotten out in the broader electorate. We cannot make this economy and this country competitive if we continue to build and build the burden of taxation which is unfortunately the hallmark of the Hawke Government's economic management. I said at the outset that in this legislation there was something very positive. That is the decision to reintroduce what is described as negative gearing. I would regard that initiative as vital. The Opposition criticised the Government's decision to take away negative gearing when that decision was made in 1985. We called for it to be changed. We campaigned in the last election on the basis that it should be changed and we argued all along that, if it was not changed, the rental market in this country would simply become a disaster, and the losers in the rental market would be not the Alan Bonds and the Holmes a Courts and people of that sort but the ordinary Australians, people struggling to make ends meet who are confronted with difficulty in finding rental accommodation and very sharply increasing rates of rental charges. One just has to compare the trends between 1985 and 1987 to see that these statements are simply supported by the facts. According to the Master Builders Federation of Australia, the rental on a three-bedroom house in Sydney has gone up by 43 1/2 per cent over that period, in Perth by 36 per cent, in Melbourne by nearly 24 per cent, and so on. So there have been massive increases. The figures for two-bedroom houses are very similar. In Sydney the rents have increased by 43 per cent; in Perth by 39 per cent; and in Melbourne by 24 per cent. What the Master Builders Federation of Australia has said about the negative gearing decision of this Government is this: As a result of the taxation changes, many investors sold their properties to owner-occupiers. Other investors simply adjusted their weekly rentals upwards to maintain yields on their investments. Let us never forget-because we listened to arguments put so strongly by people on the other side of the House-that initially the Government argued that these points being put by the Opposition, by the Master Builders, by the Real Estate Institute of Australia and indeed by some State governments were completely wrong. To prove that I will take one or two quotations from the Treasurer made in response to these arguments. This is what that Treasurer said on 17 October 1985 about the arguments of the Opposition that the Government's decision to scrap the negative gearing provision was a mistake. The Treasurer said: . . . to come in here- he meant the House of Representatives- barracking for negative gearing is the bottom of the barrel. It is the absolute bottom of the barrel to come in here scraping away for the reintroduction of negative gearing. I wonder how he- meaning Mr Howard- can hold his head and say it. That is what the Treasurer said in October 1985. He went on at the same time to say: I cannot believe that any leader of a major party would come into this Parliament and seek to have restored one of the most blatantly abused tax shelters in the system . . . To try to defend this behaviour, this outrageous rort, on the basis that it helps some ordinary renters is- and this is his word- extraordinary. The great majority of rental properties are not affected by negative gearing, and negative gearing has not succeeded in providing an adequate number of rental properties. That was an incredible statement, and a statement that of course was not real. Either the Treasurer was not being sincere in what he was saying, or he could be regarded only as a man who had very bad judgment. Members of the Press Gallery, some of whom are much in awe of the Treasurer, should perhaps sit down and take note of what the Treasurer used to say and measure that against what has happened and against the Government's decision to reverse the original decision to take away negative gearing. Some time after those earlier statements in Parliament, the Treasurer put out a Press release in which he said: Mr Howard's `trickle-down' theory of assistance to renters is typical of woolly Liberal Party thinking. What he is saying is that if the rich get a tax break they might pass a little bit of the benefit down to poor renters, so the tax break is a good idea. The Press release goes on with a lot of party political nonsense to attack the Liberal Party for supporting negative gearing. It is really very sad when the Treasurer of this country is shown up for being so profoundly insincere in what he says. Why should a man throw away any credibility he had and reintroduce negative gearing at this time? The answer is not hard to find. The problem for the Treasurer and for the New South Wales branch of the Labor Party is that New South Wales faces an election and they are not very popular. The Federal Government has already given New South Wales $40m by way of a coal bribe without knowing how that money is to be spent, and I understand the New South Wales Government is putting more money on top of that. The State Budget in New South Wales has blown out in an old fashioned pork-barrelling Budget that was recently introduced, and now we have the reintroduction of negative gearing. There has really been a three-phase program in New South Wales. First of all, when everybody in New South Wales was asking why rents were going up so fast and why there was such a shortage of rental accommodation, the State Government, supported by the Federal Government, was saying, `The figures of the Masters Builders Federation and the Real Estate Institute of Australia are basically wrong. Things are not really as bad as they look. Let us not pretend that there is a rental crisis in New South Wales'. Then that Government decided that perhaps that was not really washing with the electorate, that the electorate did not really swallow it because it could see the way rents were going up. I quoted some figures earlier which proved that. So it took another tack, saying, `Actually, this is all the fault of foreigners'. In statements which I thought had rather unpleasant racist overtones, the Labor Party said that terrible Asian investors were coming in and forcing up property prices and that this for some reason or other affected the whole of the market for housing and rental properties. All the details of the arguments were quickly lost, but the point was that foreigners were responsible for it all. So some sort of change was made in the property investment area and the Foreign Investment Review Board was instructed to give approval or otherwise for investment in property, but the rental situation did not change. So we suddenly realised that was a fraud as well, a fraud designed to square away a few votes for the New South Wales election. Then we come to the heart of the matter, which was the abolition of negative gearing. Mr Unsworth, the Premier of New South Wales, knew that only too well. He put out an interesting Press statement, on 20 July of this year, which said: The Premier, Mr Barrie Unsworth, said today that he was urging the Prime Minister . . . to relax tax rules covering negative gearing. He went on to say: . . . there is a dire need for more private investment in the rental market. With rents rising at a rate of 14 1/2 per cent per annum, and with the current vacancy rate below one per cent, its lowest point since the war, the situation is critical for many families. Hear, hear! The Premier of New South Wales for a change-I do not know whether anyone was listening to him-was actually right in saying that. He was simply saying what the Opposition had been saying for two years, and he completely undermined all the arguments, which I have trotted out for the benefit of the Labor Party tonight, that the Treasurer had been using. That is what Mr Unsworth said and the Labor Party in New South Wales was pretty much saying the same thing. It is again interesting to recall that on 4 September 1987 Mr Unsworth rang the Treasurer, according to newspaper reports, and pleaded with him to reverse this decision and to reintroduce what the Treasurer apparently, if we are to believe him, regards as a major tax rort, as a terrible shelter for the rich. The Premier of New South Wales pleaded with him to reintroduce it and, lo and behold, the pleading this time was heard. The Treasurer decided to splurge $80m of taxpayers' money, I would have to say doing the right thing, by reintroducing negative gearing. Remember, that comes on top of the $40m for coal and all the other things that are suddenly being done for New South Wales. I know only too well that the people of New South Wales, for example those who are listening to this debate tonight, will not fall for that sort of pork-barrelling trick. It is too late. They have seen too much maladministration in this country and they are too cynical of those sorts of sops coming from politicians. What this legislation tonight ultimately does-I say this for those people in the press gallery, who think so highly of the Treasurer, and those on the back benches of the Government who doubtless think the world of that man-is destroy the myth of Keating. Keating was doing one of two things. In September 1985, and in those statements that I have quoted to the House tonight, either he was not expressing a view that he believed but was being profoundly insincere in what he was saying, in which case we can rest assured that anything else he says should very definitely not be taken seriously-we simply cannot take the arguments of somebody that insincere seriously ever again-or he was just profoundly wrong, and he admits therefore that he was profoundly wrong. He has been similarly wrong on the fringe benefits tax, just as he has been wrong on the general increase in the tax burden and the absolute fraud of giving Australians tax cuts as a result of the Government's tax initiatives. I remind the House that if it compares the revenue with the tax cuts between September 1985 and today it will see that the tax cuts have been $4.5 billion and that the revenue that has come out of the tax initiatives has amounted to $18.5 billion. There has been a gigantic tax hike, and no one should ever again take seriously such assertions from the Treasurer that somehow the Government is being generous to taxpayers. It could not be less generous. Very briefly in conclusion, because I said I would not make party political points, I want to make one really positive statement about something the Government has done in this legislation. Ministers on the other side of the House should at least wake up to listen to this point, because I think this is a positive thing that the Government has done. I welcome its initiative to allow income tax averaging for people such as sportspersons, composers, artists, authors and performers. That is something that, as a former shadow Minister for the arts, I can tell the Government those people have been crying out for for a long time, and they heartily deserve it. No one should underestimate the difficulties that particularly our artists and authors, and I guess also our sportspersons-but let me speak for the artists and authors-have to endure on extraordinary low incomes. They have moments when their incomes swell, when they actually sell something, but for so much of the time their incomes are almost negligible. So I think this income tax averaging provision is extremely positive, and I warmly welcome it. Unlike the previous speaker, I like to give credit where it is due. I congratulate the Government on that initiative and on reintroducing, to use the phrase we always used, negative gearing. But does it not show up a lot of insincerity? Mr MARTIN(Macarthur)(9.49) —To be a little charitable to the honourable member for Mayo (Mr Downer), I say that I appreciate, from the Government's point of view, his charitable remarks about various aspects of the Government's legislation that is before us tonight for consideration, because I share those same views in their entirety. I was particularly pleased to hear his comments about the tax averaging for sports men and women, artists and so on. I am perhaps more supportive of the sports men and women than of the artists; nevertheless I appreciate his comments. The Taxation Laws Amendment Bill (No. 4) and the Taxation Laws (Fringe Benefits and Substantiation) Bill deal with a number of measures which are part and parcel of the Government's tax reform packages. It is important that people recognise the fact that this Government had endeavoured to approach, with a great deal of reformist zeal, the question of looking at Australia's taxation system. One has to remember back only to the days prior to 1983 when the tax system that this country enjoyed was ravaged by very high marginal personal income tax rates. It was one in which a number of taxation rorts existed in the system and it was one which, frankly, the Australian people were sick and tired of. This Government, through firstly the National Taxation Summit and subsequently its White Paper and as a result of decisions taken because of those two factors, has approached the question of taxation reform in a very positive manner. The results have been introduced into the Parliament over a period of years and have received the widespread acceptance of the Australian people. Tonight it is necessary to review some of the measures, hence the legislation with which we are dealing. The fringe benefits tax (FBT) legislation and the necessary amendments that are being discussed do not recognise that something was wrong in the initial instances; rather they refine the legislation that was put in place some years ago. What we see is that over a period negotiations can take place, meaningful input can be made into the political process and people who have legitimate concerns about the operation of any government's policy can make representations and have them heard and dealt with and changes made to those basic propositions. That is exactly what we are seeing here tonight in the fringe benefits legislation. Quite clearly, we are talking about exempting certain areas from the fringe benefits tax. One of the major areas is the calculation of the private and business use of vehicles and it is no longer necessary to record a business trip in a log book on a daily basis. Rather, a 12-week period is taken as being representative of the first year and that figure is used as a basis for following years. Many commercial travellers, many people in the business community, would welcome that measure as an initiative but it is one that has come because of representations that the Government has received and has been prepared to act on. It was a matter that needed to be looked at realistically. Consequently, other measures are being considered in this legislation and I refer to just some of them. Benefits in respect of travel costs incurred in attending job interviews are compensation for a legitimate expense and should be exempt from the fringe benefits tax. The cost of newspapers and periodicals used for business purposes is again a quite legitimate expense. These measures were not at the heart of the problem that was inherent in the taxation system. People were looking for rorts. My colleague the honourable member for Canning (Mr Gear) referred earlier to the old restaurant rort and that was a classic. When the fringe benefits tax legislation was first debated in this place people ran around the country saying X number of jobs would be lost in the hospitality area, particularly in restaurants because of the fringe benefits tax. Figures for the number of jobs that would be lost were astronomic depending to whom one listened. Surprisingly, after the tax was introduced we did not see that take place, because, as I said at the time-I have some knowledge of this industry as two of my brothers work in it-it is a very fluid industry. People come and go all the time. One could not say with any degree of certainty that one piece of legislation or one government policy would have an effect on the hospitality area and lead to major job losses or movements within that industry because, as I have said, it is so fluid. What we are now seeing is the post-FBT restaurant industry; we are now into the post-stock market crash period. All the restaurateurs are now saying, `Goodness gracious me. Once again we will lose all our business because of the stock market crash. Stock brokers and their clients will not eat in our restaurants any more even though the expense may not be tax deductible. We are in for some more hard times'. Again I think that will be proven not to be correct. Certainly in the Illawarra area the restaurant business is booming both post-FBT and certainly post-share market crash. I do not know too many people in those areas who are necessarily affected in the way some people would suggest. The second matter with which we are dealing is the reintroduction of negative gearing. The honourable member for Mayo went to some lengths to try to say that the Treasurer (Mr Keating) was backtracking and, in some way, not representing the position he had in 1985. I say to the honourable member for Mayo-this was clearly pointed out in the second reading speech-that the whole proposition involved in changing the tax mix was to introduce a couple of words which do not exist in the lexicon of the Liberal Party of Australia and those words are `fairness' and `equity'. We are trying to mix together a taxation system and a regime that will bring fairness back into the system so that each member of the community contributes a fair share and that in turn can then be turned back to the community in the provision of services by various levels of government. Quite clearly, the three levels of government in Australia are dependent to a great extent on the levels of income tax and other taxation and revenue raising measures for their expenditure package over a period. If we do not have the right mix and if everybody in the community does not contribute to providing that revenue base, of course we cannot develop our expenditure basis and that is exactly what has happened. I come back to negative gearing. Why it has been possible to reintroduce it and provide the incentive for people to get into the rental housing market is that other forms of the taxation mix have provided a shortfall that perhaps the Government had had in the past. At least the incentive has been put back for people to pay their fair share of tax and the integrity of the system has been put back. Through the capital gains tax and a reduction in the top marginal tax rate to 49 per cent we have seen that people are no longer looking for ways of trying to avoid paying their fair share of tax. They are being picked up through other measures and this is quite a reasonable suggestion. That leads me to a further matter raised by the honourable member for Mayo who said that the Government was raising more tax. It is a fact that that is the case but it is the case because the tax mix that has come about through the Government's adoption of these policy options has seen people paying tax for the first time in their lives in many cases. Not only are they paying tax but they are paying a fair share of their tax to support the services which they and other people want from this country and which the ordinary pay as you earn taxpayers have been paying for many, many years. I say to the honourable member for Mayo that he is quite correct in suggesting that that situation is in evidence in Australia at the moment. But he should also look at why that is the case and he should look beyond the simple generalities that perhaps he was advocating tonight. The final matter to which I wish to refer-I mentioned it earlier-is my support, and honourable members on the other side have indicated their support, for income averaging for artists and sports persons. It is a fact of life that those types of activities that professional sports people, artists and performing artists become involved with are seasonal activities. I will use one example which perhaps is very near and dear to my heart and that is professional rugby league players. Their season-training may be a lot longer-runs from about March through to September if they get to the grand final. I suppose the same thing would apply to Victorian Football League players and people in professional codes of football. Mr Braithwaite —Stick to league. Mr MARTIN —I will stick to league. Over that period in many cases people are paid considerable sums of money to participate in providing entertainment and fairly joyful experiences for the thousands of people who wish to watch that form of sport. But the highs in their income earning capacity are offset by some fairly severe lows in the off season when they are not earning the same sorts of match payments, bonuses or whatever. The Government has recognised that that is the case, and it has introduced a provision so that over the full 12 months the income is averaged. As a result, the tax burden will not affect those people as greatly as it would if they were pushed into a higher tax bracket at a certain time. The same thing can be said for artists, composers, inventors, performers, production writers and so on. Those people are equally affected, and I am sure that my colleague the honourable member for Isaacs (Mr Charles) could speak with great authority on the effect that this has had in the performing arts area and the television industry where he once worked. I am sure he could clearly indicate that the sorts of things that happen to professional sports people happen in those industries as well. I commend the Treasurer for introducing this part of the legislation. I also commend the Treasurer for the continued attack on tax avoidance and evasion in the economy. Some of the concessions that are being made through the fringe benefits tax legislation certainly are ones that I would have thought that both sides of the House would be able to well and truly support. Certainly, some of the welfare agencies would be pleased to see the changes included in the legislation and would appreciate a number of the issues raised and debated by honourable members on this side of the House. I can only say in conclusion that this Government will continue to fight the good fight against tax evasion and avoidance. It will continue, where necessary, to introduce or to modify existing policies in the taxation area. It will continue to have a fairness and equity component in the taxation system, and I believe it is the duty of all members of this House to support the legislation before the House tonight. Mr BRAITHWAITE(Dawson)(10.02) —Tonight the House is debating the Taxation Laws Amendment Bill (No. 4) and the Taxation Laws Amendment (Fringe Benefits and Substantiation) Bill. Taxation is probably the subject that is debated most in this House, among all the others that would constitute the work of a parliament. It is interesting that, although Government members spoke during the debate, very few addressed themselves to the content of the Bills. Mainly, they just rehashed the old claims and cliches of there being a mob of rorters, a mob of robbers and tax cheats, and so on ad infinitum, without being specific or definite about the legislation in front of them. I am sick and tired of the taxpayers of this country being described as such and being treated as such. Unless we have a tax system that is fair and equitable and one to which taxpayers can respond with a knowledge of the law, then the other services the Government provides will not be there. How often do we hear the old adage that the Government gives this and gives that to somebody without thinking of the person who not only pays the tax but also acts as the unpaid agent for the Australian Taxation Office around Australia, incurring considerable compliance costs and adherence costs in the taxation bills they pay? The irony of our law today is that a person no longer has to earn an income or record a profit to pay tax. One of the aspects honourable members are talking about tonight is a fringe benefits tax. As my colleague the honourable member for Fairfax (Mr Adermann) said earlier, he has knowledge of farmers and taxpayers who are forced, despite bankruptcy and accumulated losses within their businesses, to pay fringe benefits tax. I do not care what Government members say; there are instances where fringe benefits tax has meant that there has been less employment and staff have been discharged because firms and businesses could not tolerate paying tax when they were running at a loss. I can give examples of that from representations that are made to me quite regularly. I am sick and tired, as I said, of taxpayers being treated in that way by the Government. In the name of tax reform and in the name of what it says is fairness, equity and simplicity, the Government has added tremendously to the complicated and complex taxation laws that currently confront every taxpayer in Australia. The honourable member for Moreton (Mr Donald Cameron) mentioned that the amendments to the fringe benefits tax go to some 140 pages in comparison with the original Act, which comprises about only 129 pages. Can anyone really tell me where the simplicity of that is when, again, the honourable member for Moreton mentioned the very complex calculations that have to be made under the Act to arrive at a taxable figure? That again is a complication. What has annoyed me ever since I was a kid in junior practice is the principle of the common law, the English law, that a citizen is expected to have knowledge of the law and that ignorance of the law is no excuse. Heaven forbid that we should expect every Australian taxpayer to have a complete knowledge of the 1,700 or 1,800 pages of the current Income Tax Assessment Act and another couple of hundred pages of fringe benefits tax legislation and all the other taxation laws and suggest that a person can lodge his income tax return having full knowledge of the law. Bright as the people in the Australian Taxation Office who are responsible for these laws would be, I doubt whether there would be one who in response to a question asked over the telephone could say, `This is the situation', or, `That is the situation'. When tax agents also are asked to give advice, among their other responsibilities, the whole situation is ridiculous. We have come to a situation today where taxation is tax by confusion, controversy, contradiction, complication and change. In all of that, can anybody say that there is fairness in the system? I would suggest no. Massive distortions are brought about by the tax reforms that Government members proclaim as the jewel in their crown. I suggest that there is no equity. Again, I refer to the fringe benefits tax. It offends every cannon of the taxation law that officers of the Australian Taxation Office would have studied when an employer, somebody else, is asked to pay tax on another person's income, specifically when it was always in the taxation legislation that the person receiving such fringe benefits should declare them and pay tax accordingly. I know that the Australian Taxation Office would say that that could not be done, but I have heard the same argument used on many other occasions when special laws have been introduced in this place in order to strengthen the hand of the Taxation Office in areas where it already had the power to act. It is worth noting that the union movement, which I might have time to mention later, is exempt from income tax and capital gains tax, but it must pay fringe benefits tax and sales tax. That is not inconsequential. When the fringe benefits tax was first mentioned by the Treasurer (Mr Keating) as part of a tax reform coming down the line, I can recall him saying that it would be paid by the person receiving the benefit. That night, the President of the Australian Council of Trade Unions (ACTU) said, `That is not on'. The next day the Treasurer rethought the matter and said on the following day that the tax would be paid by the employer. That occurred over three days in late January, early February 1985. It is a small sacrifice that a properly registered trade union is responsible for fringe benefits tax, but the employees go free. Trade unions go free of all the other taxes that other organisations are expected to pay. These amendments, said to be introduced mainly to relieve the unintended consequences of the fringe benefits tax, do not address the unintended consequences of, say, capital gains tax. This has been brought up in this House before. A question was asked of the Minister for Finance (Senator Walsh) in the Senate about whether the transfer, conversion or renewal of leasehold title on crown land could impose an obligation to pay capital gains tax if, further down the line, there was another conversion or sale which ended in a profit that was taxable. It must be suggested that as that amendment is not before the House it was not an unintended consequence but a consequence that the Treasurer intended to catch in the web beforehand. That is one area in which I think the Taxation Office and the Treasurer might be a little more honest. As far as I am concerned, the taxpayers of this country are receiving no justice. There are no clear interpretations of the tax legislation. I think the honourable member for Moreton mentioned earlier that 60 per cent of the answers given to inquiries made of the Taxation Office were totally or partially incorrect. I can understand, with the controversy that raged around the introduction of these taxes, that the tax officers were as much in the dark as the Treasurer and the government of the day. The excessive penalties that were imposed make a mockery of the fact that taxpayers are bound to know what the law is; they have no excuse. The penalties are so large that taxpayers are being persecuted in this country. Honourable members talk in this House about the tremendous persecution of and the lack of respect for the poor of the country, the pensioners, and I have every respect for that view. Until we have respect for the taxpayers and give them a simple set of rules to abide by and give them a taxation system and a rate of tax which is fair, we are not going to provide for the poor in the society, as this country should be able to do with the wealth it has. These are the types of taxes that a business person has to know about and comply with. He has to pay the cost of that compliance in the course of normal work. The fringe benefits tax is already before us. Sales tax, group tax, income tax, company tax, provisional tax, capital gains tax, bank accounts tax, entertainment tax-all of this for no reward as far as the collection by the Tax Office is concerned. The cost of compliance in many cases must equal the amount of tax that is collected along the line. The cost of compliance could go to a tax lawyer or a tax accountant or to employing somebody on the job full time. As far as the fringe benefits tax and the tax on exports are concerned, I recall very early in the piece that one mining company estimated that the fringe benefits tax alone, for items which could not properly be countenanced as fringe benefits, was going to cost it an extra $2 per hour per man. That is an horrendous cost for exporters to pay when exports are so important for the survival of this country. There are other aspects of tax that I would like to talk about. I raised the question of fairness and equity. I also mentioned the union movement. It is not generally known that under the system of fairness that has been introduced to counter all the abuse, robbery, rorts and everything else that is supposed to be practised in this country, the unions of this nation have been exempt from the normal income tax and other taxes that apply to other taxpayers or any other organisation in Australia. I know that the exemption under the legislation applies also to some registered employer groups registered with the various industrial courts, but certain comments were made in the Bulletin about six months ago in which it was estimated that about 10 unions in this country had over $100m invested and that that investment money was exempt from taxation. If that is not a rort, if that is not unfair on the systems, I do not know what is. Why is the Government pursuing so relentlessly the honest taxpayers of this country when this type of abuse is so prevalent. One can assume only that, considering the special treatment that the ACTU enjoys under this Government, that rort, that particular abuse, that particular unfairness in the system, will not be addressed. Why is it unfair? It is because other organisations in this country have been persecuted over the last 12 months by the Taxation Office for non-compliance. Mr DEPUTY SPEAKER(Mr Cowan) — Order! It being 10.15 p.m., the debate is interrupted. I propose the question: That the House do now adjourn. Mr Holding-I require that the question be put forthwith without debate. Question resolved in the negative. Debate resumed. Mr BRAITHWAITE(Dawson) —I was saying that many organisations in Australia are being compelled to comply with various aspects of the tax Act. They could be ordinary non-profit organisations, service clubs or sports associations which are taxed on what I think is called non-mutual income of a rate of tax which is similar to the corporate rate of tax. On the one hand, the unions invest in property, in various funds, but the interest and the rent are free of taxation and on the other hand the real strivers in the community who are trying to keep their organisations ticking along are being persecuted by the Tax Office. I refer to the new approach by the Tax Office in the legislation to provisional tax assessments. I understand that these assessments are sent in see-through envelopes. The assessment itself can actually be viewed because of the nature of the envelope it is sent in. The confidentiality of the provisional tax is not confirmed. I have had complaints that a provisional tax notice, incorrectly addressed or addressed in any other fashion, can be viewed by the person delivering the letter. Confidentiality is a concern. On that aspect, in Queensland the security aspect should be examined because apparently the posting of those letters has been given to a private contractor. I am a great believer in privatisation but security is a predominant factor. Another aspect is that the first provisional tax will be due, I understand, by 1 December, yet the forms for adjustment of that tax, for people who want a reassessment were not available until yesterday. This is in spite of the fact that the notice had been given two weeks ago. Mr Tim Fischer —That will be a crushing blow. Mr BRAITHWAITE —It will be a crushing blow, particularly for tax agents who will now be called upon to reassess provisional tax returns at a time when they are busy lodging tax returns from the previous year. There will be a bottleneck. While there are certain exemptions from provisional tax, particularly as I understand it for primary producers, the computers at the Tax Office cannot discern properly the income from primary production and other income. As a result, assessments over a certain amount have been blanket issued and people are being asked, if they object to the payment, to apply for reassessment and pay the extra cost. There are many inconsistencies in this legislation. Finally, I turn to some of the amendments in connection with the Income Tax Assessment Act itself. I mention specifically the Government's backtracking on negative gearing. It was found that it made a monumental mistake. I do not care what anybody says; the monumental mistake was gauged by the fact that building approvals for residential purposes had dropped significantly to an all-time low. The Government was persuaded on that evidence to change tack. It received advice right from the beginning that that would happen. It should also be appreciated that the Government has compensated for this in other ways. For instance, the depreciation on the capital expenditure for the construction of new income producing buildings, which applies particularly to the tourist industry, has been reduced from 4 per cent to 2 1/2 per cent. On top of the withdrawal of the tourism overseas promotion scheme, this has been a crushing blow to the tourist industry. This has been done by a government which only today has been telling us how much it has done for the tourist industry. I believe that it should be criticised. The Treasurer intends to look at the structure of corporate taxation with a view to reducing the corporate rate of tax. If, in making such an adjustment, the Treasurer intends to look at normal accounting procedures where tax deductibility and depreciation are factors, I would suggest that he would do well to avoid impinging on the accounting principles that have been entrenched for so long in our accounting system. I believe that these two Bills have been unnecessary. Had the Treasurer and the Government carefully considered the aspects of the additional taxes which they introduced-particularly the fringe benefits tax, which is one of the most horrific taxes being faced by the people of Australia-and had they listened to and taken advice prior to acting, the legislation on fringe benefits that we are dealing with tonight would have been unnecessary. Certainly, the content of the Taxation Laws Amendment Bill (No. 4) could have been considerably reduced. I also criticise the Government for bringing into this House, as late as November, amending legislation on aspects of the Act which were mentioned as long ago as 1984 and more particularly in 1986. To bring forward this amending legislation at least 12 months afterwards is, I believe, a disgrace. Madam SPEAKER —Order! The honourable member's time has expired. Mr ANDREW(Wakefield)(10.22) —I am very conscious of the hour and conscious of the fact that some of my colleagues wish to participate in the adjournment debate, so I will be brief. I am forced into this chamber and into participation in this debate by comments made by honourable members opposite that reveal the motives of the Government in persisting with the philosophy of the Taxation Laws Amendment Bill (No. 4) currently before the House. Ever since biblical times there has been a certain resentment levelled at people who were tax gatherers or tax collectors-a resentment that is akin to the resentment currently levelled at those of us who are politicians. I was absolutely astounded to be sitting in my office this afternoon hearing members opposite-particularly the honourable member for Scullin (Mr Jenkins)-take particular pride in the tax collection regime that has been the hallmark of this Government. The honourable member for Scullin went on to say, as indeed the Treasurer (Mr Keating) has said, that thanks to the fringe benefits tax provision what was calculated to have been a $325m income to the Government has become a $535m income in the last financial year. The honourable member for Scullin said that that $535m would otherwise have been squandered-mark that word `squandered'-if the Government had not got its hands on it. Whose resource was this $535m? Of course, it was the resource of the taxpayers and the electors who put us into this place. Even when we, under the present tax provisions in the name of the fringe benefits tax, have acquired this resource, we ought not to claim it as ours. It is merely something that we hold in trust. The task that we have in this chamber-no matter which side we may sit-is not to maximise the tax take, but to minimise the demand we put on taxpayers. The honourable member for Scullin has said, as have other members-I think the honourable member for Canning (Mr Gear) was one of them-that the high tax story peddled by the Opposition was nothing more than a myth. I would like to hear either of them selling that in my electorate or, may I suggest, theirs. As the honourable member for Mayo (Mr Downer) has pointed out, under the stewardship of the present Treasurer the tax take has gone up by $34,000m per annum. Let us ignore that figure if we wish and say that there has been a general growth in the money supply anyway, yet the proportion of gross domestic product, which is surely a fair measure to use for tax take at any time, has gone from 24.5 per cent, when Mr Keating became the Treasurer, to 31.2 per cent today. There is no doubt that Australian taxpayers now pay more than they have ever paid before in terms of the proportion of their income made available to the Government. All that the honourable member for Canning and the honourable member for Scullin said about our being part of a low tax regime is nonsense. When the honourable member for Canning comes in here and peddles the Swedish model as something that we ought to admire and that ought to be the bench mark of future government action, anyone who hears him should react nervously. Quite frankly, while the honourable member for Scullin claims in the thrust of his remarks that the underlying motive of what the Government would want to achieve through fringe benefits tax is fairness and equity, all the evidence before the House tonight is that that argument is nothing more than nonsense. As the honourable member for Curtin (Mr Rocher) has so eloquently said, the confusion and complication currently surrounding the fringe benefits tax legislation make the argument of fairness and equity nothing more than rubbish. The fringe benefits tax legislation is now as the Opposition predicted it would be 12 months ago. Tonight we have before us, as an illustration of the confusion and the unpredictability of the fringe benefits tax legislation, 146 pages of amendments. As the honourable member for Moreton (Mr Donald Cameron) said earlier in the debate, it took us 85 years to get 1,100 pages to the tax Act and in three years we have added 600 pages. Honourable members might well ask, as the honourable member for Curtin did, whether the confusion currently surrounding the fringe benefits tax is in fact intentional. I want to turn briefly to the impact of this fringe benefits tax and the legislation before the House on the people who principally make up the constituency of Wakefield-the farmers. I remind the House that when the fringe benefits tax came into being the National Farmer of June 1986 contained an article which read: Treasurer Keating's full tax package is boobytrapped with a host of nasty shocks for farmers in both the short and long term. If you're not too good at keeping receipts and records, you're likely to pay far more tax than you owe. If you're a farmer on the average income of $6,700 paying income tax of $526 you could find your tax liability quadrupled if you have an employee on fringe benefits. You'll be paying tax on shearers' or fruit-pickers' accommodation and meals-and an average of $2,000 a year per full-time employee, according to farm spokesmen. If you are one of the 8,500 farms set up as a company you may have to pay tax on your own home, meals and car, and those of your retired parents living with you. The original legislation calls for it, though the Treasurer has hinted this may be changed. The Opposition, having echoed the sentiments of the National Farmers Federation, is now not only prepared but also pleased to note that the Government has heeded some of the very pitfalls that we warned would be a part of this fringe benefits tax legislation. It has brought into the House some of the amendments to avoid those pitfalls so clearly pointed out by both the National Farmers Federation and the Opposition 12 months ago. But the very legislation designed to get over some of those pitfalls in itself merely adds to the confusion that already exists in the tax paying community and particularly in rural communities. In fact, much of what we have before us tonight only further muddies the waters of the total tax Act. I shall of necessity, and as promised, be brief, but I cannot conclude without referring to the impact that the fringe benefits tax legislation still continues to have on both State and local authorities. Local authorities, particularly in rural councils in remote areas, have difficulty in attracting qualified staff to man council gangs and to be part of their senior administration. It has been their practice to provide subsidised housing to attract these qualified people. Mr Rocher —They are not rorters. Mr ANDREW —They are not rorters. It is an absurdity to ask these councils to pay fringe benefits tax on the house provided. All the Government is doing is ensuring that every ratepayer in a remote rural council area pay a tax on the rates he has already paid. If that is not double dipping, I do not know what is. I conclude by referring to the oft-stated criticism from honourable members opposite levelled at those of us on the Opposition benches. They ask, `In what direction would you take Australia, and what are you proposing to do?' I know where the Opposition would take Australia. It would do all it could to encourage export incomes. I would have thought that that sentiment would be echoed by honourable members opposite, whose Prime Minister (Mr Hawke) last week was so proud to present national export awards and to refer to our key exporters as national heroes akin to the finest of our sportsmen. But in this debate we continue to look at amendments which, instead of addressing the basic flaws in the fringe benefits tax, merely continue it as a penalty on the innovative, on employers and on exporters. Tonight I welcome the recognition that Opposition criticism of the tax has been well founded, but I cannot endure a philosophy that suggests that tax collection is an end in itself. Mr HOLDING(Melbourne Ports-Minister for Employment Services and Youth Affairs and Minister Assisting the Treasurer)(10.32) —in reply-I wish to thank honourable members for their contributions to this debate. There are a number of matters I would like to bring to the notice of honourable members in respect of the amendments proposed by the Taxation Laws Amendment Bill (No. 4). Clauses 16, 42, 44 and 45 deal with proposals announced by the Government on 29 June 1987 to permit a newly incorporated company, referred to as a shelf company, to satisfy the 100 per cent common ownership test that is applied in various company grouping provisions of the income tax law. Since the introduction of the amending legislation the Government has received representations on two aspects of the proposed amendments. The amendments are drafted to apply in respect of 1986-87 and subsequent years. Two representations have been received that the amendments should apply from the dates on which each of the relevant grouping provisions were first made available. The Government has decided to agree to these representations. For example, the amendments dealing with the company loss transfer provisions will be back-dated to apply from the 1984-85 income year. Another representation has pointed out that the amending provisions do not take account of the fact that a shelf company may be acquired, not only by the act of acquiring the subscriber shares from the shelf company packager, but also by receiving an issue of shares from the shelf company associated with the redemption of the subscriber shares. The Government accepts that the amending legislation should take account of this circumstance. Because of the need to ensure passage of the Bill this sitting, it has been decided not to move amendments at this time. Instead, the Government proposes to incorporate the necessary amendments to give effect to these decisions in another taxation Bill, which is programmed for introduction later in this sitting. I now wish to turn to some of the points raised by Opposition members during this debate. The substance of Opposition arguments is first that the amendments are too large and complex and that employers will not be able to cope with them. The Opposition's response is to move an amendment declining to give a second reading to the Bill on the basis that it would prefer a tax on benefits not related to what it describes as legitimate business activities. The difficulty involved in that is that no one on the other side of the House, or indeed anybody generally, can draw an accurate line or an accurate definition of what constitutes legitimate business activities. How does the Opposition propose to define these? Is a motor car that an executive receives a legitimate business benefit if it is only used in a minimal way in respect of the business? Have the benefits become traditional expectations? Is the free lunch provided to members of one family and put on the company expense account a legitimate business activity? It is all very well for Opposition members to say that the Government should have taken their advice. If we had taken the Opposition's advice there would have been no fringe benefits tax and no capital gains tax, and the rorts which permeated our tax system under the former Government would have continued. The fact is that during the period of the coalition government those who had the greatest capacity to pay tax in this society and the greatest legal obligation to do so by a series of taxation evasion devices had a real option as to whether they paid tax or not. That was a situation that had to be corrected. In the arguments that have taken place in this Parliament in respect of the merits of the fringe benefits tax and the capital gains tax, which were primarily aimed at closing off those loopholes and producing equity in the tax system, the Opposition's position has been to advise the Government that we should not proceed. The Opposition predicated a strong electoral backlash. We were told that we would be defeated. The people of Australia were given an opportunity to pass judgment on those taxation measures and they voted to return the Government which had implemented them. There has been an electoral judgment on the efficacy of the principles involved in this legislation. Those principles and the fact that this legislation was passed enabled equity and some measure of justice to be brought into the tax system. In addition, if it had not been for the implementation of these concepts some of the quite considerable taxation concessions which were given in the last Budget could not have taken place. It was as a result of collecting tax from those who had a long-standing legal obligation to pay and who had evaded that responsibility that that took place. I believe that that answers the substance of many of the arguments put in various ways by honourable members opposite. We have also heard arguments about the length of the amending Bill. No one, least of all this Government, believed when we introduced and adopted the far-ranging principles that were involved in the legislation there would not be a need to modify it, and to introduce further amendments, because the application of the tax and the way in which it was implemented would, given the nature of Australian society, show up problems that would need to be rectified. The Government has responded to that. Indeed, the length of the proposed amendments shows the consideration and time given by the Government to this matter. Many Opposition members have recognised that, although they still want to maintain their hostility to the whole concept of a fringe benefits tax, the very substance and number of the proposed amendments represent a legitimate Government response to some of the difficulties that were being experienced in the community. That is the heart of the matter. I believe that the honourable member for Kooyong (Mr Peacock) is correct in not calling for a division on his proposed amendment. We would all be embarrassed if, by some miracle, it were passed and the Government's measures could not come into law. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Holding) read a third time. Debate resumed from 29 October, on motion by Mr Holding: That the Bill be now read a second time. Mr PEACOCK(Kooyong)(10.40) —I move: That all words after `That' be omitted with a view to substituting the following words: `the House declines to give the Bill a second reading as it totally rejects legislation pertaining to the Labor Government's iniquitous fringe benefits tax while at the same time noting that a more efficient and equitable revenue collection system requires that obvious tax avoidance procedures, where benefits are not related to legitimate business activities, must be adequately dealt with'. I will refrain from addressing this amendment as the thrust of the remarks made in my speech during the second reading debate relate to the amendment. Madam SPEAKER —Is the amendment seconded? Mr Ian Cameron —I second the amendment. Amendment negatived. Original question resolved in the affirmative. Bill read a second time. The Bill. Mr HOLDING(Melbourne Ports-Minister for Employment Services and Youth Affairs and Minister Assisting the Treasurer)(10.42) —by leave-I move: (1) Clause 17, page 21, lines 11 to 13, omit `referred to in whichever of subparagraphs (b) (i) and (ii) is applicable', substitute `of the providers portion'. (2) Clause 17, page 21, lines 38 to 40, omit `referred to in whichever of subparagraphs (b) (i) and (ii) is applicable', substitute `of the providers portion'. (3) Clause 17, page 22, lines 18 to 20, omit `referred to in whichever of subparagraphs (b) (i) and (ii) is applicable', substitute `of the providers portion'. (4) Clause 48, page 102, after the proposed definition of `personal services', insert the following definition: `` `providers portion', in relation to an expense payment fringe benefit, means whichever of the following amounts is applicable: (a) the amount of the payment referred to in paragraph 20 (a) reduced by the amount of the recipients contribution; (b) the amount of the reimbursement referred to in paragraph 20 (b);''. The amendments to the Bill moved on behalf of the Government are of a purely technical kind. They correct a drafting error in clause 17 which modifies the operation of section 24 of the Fringe Benefits Tax Assessment Act 1986. Section 24 applies to reduce the taxable value of an expense payment fringe benefit to the extent to which the expenditure incurred by the employee would have been deductible to the employee for income tax purposes if it had not been paid or reimbursed by the employer. The amendments will ensure that section 24 as proposed to be modified by the Bill will apply in the manner described in the explanatory memorandum. Amendments agreed to. Bill, as amended, agreed to. Bill reported with amendments; report-by leave-adopted. Bill (on motion by Mr Holding)-by leave-read a third time. Motion (by Mr Holding) proposed: That the House do now adjourn. Mr HICKS(Riverina-Darling)(10.44) —Tonight I draw the attention of the House to an invention presently being developed in the Hillston district of my electorate by Mr Wilfred Murrell and his assistant, Mr Dennis Taylor. I raise the matter not because I have a share in the business but because I believe that this invention will revolutionise the process of purifying water for domestic and industrial use and will save countless lives in developing countries. It will also provide a light engineering manufacturing process that will create hundreds of jobs in rural centres in New South Wales and provide much needed export earnings for our nation. As with most inventions of genius, the process is very simple, and basically provides a means of purifying most types of water that contain colloids, bacteria and algae in mixture by passing a very low voltage charge through aluminium electrodes immersed in the water. Water that can be treated includes that from fresh water creeks, rivers, swamps, irrigation channels or dams. As yet, bore water containing salt as a compound cannot be treated, but this may be overcome in the future. The process produces hydrogen and oxygen gas bubbles and the small bubbles floating to the surface gather the oppositely charged colloids, bacteria and algae to themselves, to form a scum on the surface of the water. This can be very simply removed leaving crystal clear potable water, free of colloids, bacteria and algae. As a demonstration, Wilfred Murrell filled a 600-litre tank with water from the Lachlan River at Hillston, which at the moment is far from clear. Within an hour I was able to drink clear, bacteria-free water. Present water purification systems require the use of a bubble process, but also rely on the addition of chemicals such as copper sulphate, alum sulphate and chlorine, all of which are not beneficial to health. The beauty of the Murrell system is that no chemicals at all are used and no filtration systems are required. There are no moving parts to the system. The unit can be worked from a 240-volt power supply or from batteries which in remote areas can be recharged from solar energy. The cost is very low at about 3c or 4c per 500 litres of processed clear water. Can honourable members imagine how many lives could be saved in the developing countries of Africa alone where many diseases, such as diarrhoea, are transmitted through the water supply? In earthquake or hurricane situations people could be provided with safe drinking water within a few hours of the units being delivered. The armed forces would find the system a boon in setting up water points and would be able to do away with the present cumbersome operation now in use where chemical processes have to be used. It is my belief that in the not too distant future, towns and even cities will benefit from the invention. For example, Adelaide, which has a great problem with river Murray water, particularly when the Darling River water with its colloid content is added, will be able to use this process or an adaptation of it. This process opens up potential for salvaging water from some industrial wastes. Many waste products can be separated from effluent waters, contributing benefit to the environment, reducing the contamination of rivers and other water sources while at the same time conserving a national resource by recycling water for industry and reducing costs. However, further research is needed in this field. The ability to clean up cooling tower waters could make a big contribution to reducing environmental hazards, as experienced in Wollongong recently. Like many honourable members, I have a number of inventors come to my office asking if there is any way the Government can assist with their invention. Until now I have found the Government agencies to be tardy in trying to promote these important Australians and their genius. However, this time, because I realise how important this invention is, not only for improving the quality of life of many Australians, but also in the saving of life in developing countries, I will be leaving no stone unturned in helping this invention get where it should be, and that is on world markets. I will be helping the inventors wherever possible, and it is my intention to test the bureaucratic system to see whether Australian inventive genius presently has a chance to succeed. It is my intention periodically to report the invention's progress to the Parliament. This is one development we cannot let slip through our fingers and I am asking for the support of individual Ministers as well as Governments, both State and Federal, to ensure the project's success. For those who may be interested, Mr Murrell has units ready for operation which can be inspected at Wilga Farm, via Hillston in New South Wales. Mr CAMPBELL(Kalgoorlie)(10.49) —A. A. Milne, in his book Winnie-the-Pooh, wrote about a bear for whom honey had an attraction and who used to wander up and down hives saying, `Isn't it funny how a bear likes honey?'. It is probably not funny at all. The honey industry in Australia is worth $20m a year. Bees are susceptible to a large range of infections. One of the worst is American foulbrood, a bacterial disease which is absolutely devastating to hives and which is the scourge of beekeepers. It affects all States, but not the Northern Territory where bees are not kept at all. Prior to 1983, if American foulbrood disease broke out, all the hives were incinerated at an enormous cost to the beekeeper. But in 1983, the New South Wales veterinary laboratory and the Australian Atomic Energy Commission experimented with gamma radiation of hives using cobalt 60. It was very successful. It was so successful that 1,400 hives were irradiated in 1985 and now, in New South Wales alone, 250,000 hives have been treated in this way. This has resulted in a considerable saving to the industry, estimated to be in excess of $500,000 at this stage. This saving does not take into account the cost of the labour in producing new hives or the cost of lost production, which would be considerable. Unfortunately only two commercial cobalt 60 gamma radiation plants exist in Australia; one in Dandenong in Victoria and the other at Wetherill Park in New South Wales. Irradiation is still a cost-effective measure of treating the outbreak of this disease and it is worth transporting hives long distances in Australia rather than destroying them. One megarad of radiation gives a complete and absolute cure for American foulbrood disease. It also has a side benefit because it has been found that where hives are irradiated honey production is raised, on average, by 10 per cent due to the control of the less dangerous nasties that also affect bee hives. I mention this because in my time in Parliament I cannot think of one other occasion when so much misinformation and hysteria have been raised about the irradiation process used in preserving food. It is often said, `There is no demand for this process. What is the benefit? Who would be the beneficiary of it?'. Some figures taken out recently show that the treatment of sprout inhibition in potatoes in this way would result in a considerable saving. It is estimated that $5m per annum is lost by storing potatoes in the ground in Tasmania. I should have thought there would be considerable savings and benefit to Tasmanian potato growers. This treatment is also an alternative to chemical treatment of sprout inhibition in onions. Honourable members know only too well that the time is coming when, no matter what level of chemical residue is present, overseas countries will be very reluctant to take our produce. If Australians are to protect their agricultural exports, they should seek alternatives to chemicals. For example, irradiation is the only method of killing seed weevils in mangoes. Most other fruits can be treated in this way. It is an alternative to using ethylene dibromide, which is used substantially at the moment. It is quite a nasty chemical and, in certain concentrations, is carcinogenic. Delayed ripening of fruit will enable Australians to get into markets that they are not normally able to get into except through air-freight. Again this process is an alternative to ethylene dibromide in the treatment of dried fruit. It not only increases the shelf life of strawberries but also appears to improve the quality. Recently in France a trial shipment of strawberries which was put on sale and which was heavily advertised as being irradiated sold out quickly at a 25 per cent cost premium. That indicates that the French, who are very fussy in the purchase of their vegetable produce, prefer irradiated produce. I propose to go on at length in this place about food irradiation because I am sick of the nonsense and hyperbole on this subject. I thank the House for its time. Mr REITH(Flinders)(10.54) —About 12 months ago I was able to inform the House, as a result of extracting some material under the Freedom of Information Act, of some of the generous provisions provided to members of the Constitutional Commission and members of some of the advisory committees. Tonight I am able to reveal to the House, as a result of a further application under the Freedom of Information Act, that these generous provisions have, if nothing else, been extended and continue to be provided to members of the Commission. I can reveal that members of the commission and advisory committees continue to do very well out of the proposed reform exercise. When I first raised this matter, one of the members of one of the advisory committees wrote to me and sought from me an apology on the basis that I had attributed to him statements which were out of context and which implied that he was a member of one of the advisory committees for the sole reason of personal gain. The reality is that since that member raised his concerns with me it has been revealed that that member has obtained personal benefit as a result of his membership of an advisory committee by having made available to his publishers the mailing list of the Constitutional Commission to promote a book with which he has been associated. It is unbelievable that, according to the figures obtained under the Freedom of Information Act, the remuneration for the five commissions totals $324,700 for this year. If that is not enough $80,000 was spent on travel, to give a total of $404,700. It cost $2,500 for an overnight stay in Sydney for a meeting. It is outrageous that these sorts of funds are being paid for these people to be involved in this process. Those who know the Chairman know that he is a decent bloke, but if he sits on the Commission for two days in a week he receives $1,500. That is much too much for a part time job out of total pay-out of $404,000 for five people over 12 months. That is not the only example of extravagance by the Constitutional Commission. Last year the Commission held a party in Centennial Park in Sydney to launch one of the advisory committee reports. This intrigued me so I telephoned to ascertain details of how much taxpayers' money was spent on this party, which attracted some publicity. I was told that about $1,000 was spent. After reading the fine print of the document supplied to me, I found that the $1,000 was putting me off the scent because a list of consultants was also supplied. Lo and behold, one consultant received $9,477 for organising the shindig in Centennial Park. That was throwing taxpayers' money away and treating money as if it grows on trees. The list of consultants is long-$218,000 went to Hill and Knowlton Pty Ltd. The members of the Constitutional Commission and the advisory committees were appointed on the basis of being able to sell the reform proposals. They are eminent in Australian society. Why did $218,000 need to be spent on consultants when these people were appointed because of their access to the media and their pre-eminent positions in Australian society. As I said, a long list of consultants has been supplied to me. It is outrageous that the Government has spent well over $5m on this futile attempt to satisfy a few ideologues in the Australian Labor Party who want to maintain their rage. The figures reveal the extravagant lengths to which the Labor Party is prepared to go and it ought to be brought to a stop. Mr JENKINS(Scullin)(10.59) —In the minute available to me, I wish to add to a speech that I made when the House was last assembled. I refer honourable members in the House and avid readers of Hansard to the adjournment debate of 4 November, when I commented on constitutional reform, especially the need for reform as a result of the Tasmanian Government failing to appoint a senator to replace Senator Grimes, who had resigned. With due deference to members of the legal fraternity in the House, I make the following comments in conclusion. Not wishing to be flippant, I can only agree with the conclusion of the article from Cassius, a commentator in the Daily Commercial News of Tuesday, 12 May 1987, who said: The lesson to be learned from the relative storm in a tea cup is that lawyers should never be trusted to draw up simple statements of intent. There was nothing simpler than that 1977 amendment to the Constitution. Now even the lawyers confess that it is not clear and they will be the only ones to gain from this dubiety. The constitutional hiatus must be rectified by strengthening section 15 of the Constitution before some future Robin Gray so openly flaunts the will of the Australian people as displayed in the 1977 referendum. Madam SPEAKER —Order! It being 11 p.m., the debate is interrupted. The House stands adjourned until 10 a.m. tomorrow. House adjourned at 11 p.m. The following notices were given: Mr Dawkins to present a Bill for an Act to amend the Student Assistance Act 1973, the Seamen's War Pensions and Allowances Act 1940, the Social Security Act 1947 and the Veterans' Entitlements Act 1986, and for related purposes. Mrs Kelly to present a Bill for an Act to make provision for certain employees of Williamstown Dockyard. Mr Spender to move- That this House- (1) having regard to- (a) the desire of all people to live in peace and freedom and to enjoy basic human rights, including the right to self-determination; (b) Australia's membership of the United Nations and regard for the principles of its Charter, the Universal Declaration of Human Rights, the United Nations Declaration on the Granting of Independence to Colonial Countries and Peoples adopted by its General Assembly on 14 December 1960 by Resolution 1514 (XV), and the Final Act of the Helsinki Agreement, and (c) the fact that, whilst the Australian people have acquired these rights and freedoms other peoples are deprived of them. (2) taking note- (a) of the Resolution of the European Parliament on the Situation in the Baltic States (Estonia, Latvia and Lithuania) adopted on 13 January 1983; (b) of the fact that the 3 Baltic States were independent sovereign republics and members of the League of Nations during the years 1918 to 1940, when they were occupied by the Soviet Union in consequence of an agreement between the then German Government under Hitler and the Soviet Government under Stalin (the so-called Molotov-Ribbentrop Pact); (c) of the fact that the occupation of these states by the Soviet Union still continues, but that in accord with other democratic governments the Australian Government has not recognised de jure their incorporation into the Soviet union; (d) that the peoples of Estonia, Latvia and Lithuania are being denied many basic human rights but that they have not given up their struggle for self-determination and freedom, and (e) that an intensive process of Russificaton is taking place in these occupied countries aimed at elimination of the indigenous languages and culture. (3) resolves that- (a) Australia, as a member of the United Nations, should fulfil its obligations to promote and encourage respect for human rights and fundamental freedoms, and should support the European Parliament's Resolution in respect of the Baltic States; (b) in order to do so the Australian Government should, on its own initiative, and by seeking the support of like-minded governments, bring the question of human rights and self-determination for the Baltic States before all appropriate forums of the United Nations, and especially before the United Nations Human Rights Commission, and (c) the Department of Foreign Affairs and Trade should be directed to take all necessary steps in order to implement this Resolution. The following papers were deemed to have been presented on 17 November 1987: Australian Wine and Brandy Corporation Act-Regulations-Statutory Rules 1987, No. 264. Christmas Island Act- Ordinances-1987- No. 6-Interpretation (Amendment). No. 7-Administration (Amendment). Regulations-1987-No. 1 (Christmas Island Assembly Ordinance). Cocos (Keeling) Islands Act-Ordinances-1987- No. 3-Interpretation (Amendment). No. 4-Administration (Amendment). Conciliation and Arbitration Act-Regulation-Statutory Rules 1987, No. 256. Customs Act-Notice-1987-No. 8. Dairy Produce Act-Regulation-Statutory Rules 1987, No. 263. Defence Act-Determinations-1987- No. 73-Overseas Rental and Utilities Allowance and Education Assistance Overseas. No. 74-Education Assistance Overseas. No. 75-Temporary Rental Allowance. No. 76-Travelling Allowance and other allowances. Customs Act-Notice-1987-No. 8. Fisheries Act-Regulations-Statutory Rules 1987, No. 259. Lands Acquisition Act-Statement of lands acquired by agreement authorised under subsection 7 (1). Lighthouses Act-Regulation-Statutory Rules 1987, No. 257. National Health Act- Notice for the purpose of section 45d, dated 10 November 1987. Regulations-Statutory Rules 1987, No. 262. National Parks and Wildlife Conservation Act-Regulation-Statutory Rules 1987, No. 254. Nuclear Non-Proliferation (Safeguards) Act-Regulations-Statutory Rules 1987, Nos. 258, 260. Public Service Act-Determinations-1987-Nos. 75, 103, 104. Racial Discrimination Act-Regulations-Statutory Rules 1987, No. 265. Radiocommunications Act-Standard-Statutory Rules 1987, No. 266. Seat of Government (Administration) Act- Determination listing fees and charges for purposes of the Health Authority Ordinance, dated 6 November 1987. Ordinances-1987- No. 57-Medical Practitioners Registration (Amendment). No. 58-Business Franchise (Tobacco and Petroleum Products) (Amendment) (No. 2). No. 59-Games, Wages and Betting-houses (Amendment). No. 60-Games and Betting (Amendment). No. 61-Gaming and Betting Laws Amendment. No. 62-Health Authority (Amendment) (No. 2). No. 63-Motor Traffic (Amendment) (No. 2). No. 64-Roads and Public Places (Amendment). Regulations-1987- No. 14 (Magistrates Court (Civil Jurisdiction) Ordinance). No. 15 (Business Franchise (Tobacco and Petroleum Products) Ordinance). No. 16 (Magistrates Court (Civil Jurisdiction) Ordinance). No. 17 (Motor Traffic Ordinance). Superannuation Act-Regulations-Statutory Rules 1987, No. 255. Therapeutic Goods Act-Regulations-Statutory Rules 1987, No. 261.