Wednesday, 18 November 1987 Madam SPEAKER (Hon. Joan Child) took the chair at 10 a.m., and read prayers. Consideration resumed from 5 November. Consideration of Senate's request. Senate's request- Page 2, clause 4, lines 3 and 4, leave out ``and for all subsequent financial years'', insert ``, the financial year that commenced on 1 July 1987 and, until the Parliament otherwise provides, the financial year commencing on 1 July 1988''. Mr HUMPHREYS(Griffith-Minister for Veterans' Affairs)(10.02) —I move: That the requested amendment be made. The Senate has requested that the Income Tax Amendment Bill (No. 2) 1987 be amended to remove the words that would make the imposition of income tax a standing measure. A similar request has been received from the Senate in relation to the Bill that would impose the Medicare levy. While the Government holds to the view that there are sound reasons for making income tax and the Medicare levy standing measures, it does not wish to further delay passage of these Bills and the issue of income tax assessments which are dependent upon their passage. Accordingly, I move that the amendment requested by the Senate be made without modification. Mr PEACOCK(Kooyong)(10.03) —This is just another example of this Government either not thinking through the consequences of its actions and/or just treating this Parliament as a rubber stamp of its actions. The lifeblood of this Government is the taxation it receives. It has been the highest taxing government in the history of this nation. When this legislation, the Income Tax Amendment Bill (No. 2), came before the House of Representatives, we said that we were not going to allow an attempt to deny the annual review of tax scales by the Parliament. The Government sought to put down legislation which would not require it to come back and account to the Parliament in regard to the rates. Mr Steele Hall —Sneaky. Mr PEACOCK —Absolutely sneaky. Because income tax represents well over 60 per cent of the total receipts of the Commonwealth Government and a large proportion of that was embodied in the legislation before the House, we demanded at the time-and moved an amendment-that those rates be dealt with annually. Those wiser heads in another place have determined that our argument was correct in not being prepared to allow the Executive arm of government to ride roughshod over the Parliament. The Senate accepted our argument and, as a consequence, this amendment was carried in the Senate. It might be another lesson to the Government not only to think through the consequences of its actions, but to consider the high rates of tax that it is dumping on the Australian people and to recognise that in this Parliament the Opposition will not permit it to allow those high rates of tax to run sine die without any reference to the Parliament. I am very glad that the Government has accepted the wisdom of our initial argument and that of the Senate. Question resolved in the affirmative. Resolution reported; report adopted. Consideration resumed from 5 November. Consideration of Senate's request. Senate's request- Page 2, Schedule, proposed amendment of sub-section 11 (1) of the Principal Act, leave out ``and for all subsequent financial years'', insert ``, the financial year that commenced on 1 July 1987 and, until the Parliament otherwise provides, the financial year commencing on 1 July 1988''. Mr HUMPHREYS(Griffith-Minister for Veterans' Affairs)(10.06) —I move: That the requested amendment be made. The Senate has requested that the Medicare Levy Amendment Bill be amended along the lines of the amendment to the Income Tax Amendment Bill (No. 2) 1987; that is, that the words that would make the imposition of the Medicare levy a standing measure be omitted and that words be inserted that would impose the Medicare levy for only the 1987-88 financial year and, until Parliament otherwise provides, the 1988-89 financial year. I have already foreshadowed the Government's acceptance of the Senate's request for this amendment during the committee stage of the debate on the Income Tax Amendment Bill (No. 2) 1987. Mr PEACOCK(Kooyong)(10.07) —The remarks I passed in relation to the Income Tax Amendment Bill (No. 2) apply to the Medicare Levy Amendment Bill. We proposed this amendment in this House, but the Government rejected it. However, the wiser counsel of the Senate prevailed and recognised that this Government would not ride roughshod over the Parliament; that it had a duty to account to this Parliament in regard to rates, levies and taxes, not simply to legislate to apply these measures sine die so that at any time it could change them at its whim rather than at the determination of the Parliament. This morning we have seen the spectacle where not only the legislation itself but also the running of the Parliament is out of control. I will not dwell on that. In the past we have been critical enough of the leadership of this Government. Not only has the Government now sought, through its legislation, to deny Parliament the opportunity of reviewing rates of taxation and of reviewing the levy referred to in the Medicare legislation to which the Minister for Veterans' Affairs (Mr Humphreys) just referred but also it has paid no regard to the proper chairmanship of this committee. I simply say that if the Government had listened to the clarity of thought and the strength of argument of those on this side of the chamber in regard to arguments on taxation we would have a damned sight better Government. However, at least we have been able to force it to come back and account to the Parliament in regard to the rates of taxation which have made it the highest taxing government in the history of this nation. The Government will be called to account annually for that. Question resolved in the affirmative. Resolution reported; report adopted. [COGNATE BILLS: BASS STRAIT FREIGHT ADJUSTMENT LEVY COLLECTION AMENDMENT BILL 1987 BASS STRAIT FREIGHT ADJUSTMENT TRUST FUND AMENDMENT BILL 1987] Debate resumed from 29 October, on motion by Mr Kerin: That the Bill be now read a second time. Mr DEPUTY SPEAKER(Mr Leo McLeay) —I understand that it is the wish of the House to debate the Bass Strait Freight Adjustment Levy Amendment Bill concurrently with the Bass Strait Freight Adjustment Levy Collection Amendment Bill and the Bass Strait Freight Adjustment Trust Fund Amendment Bill. There being no objection, I will allow that course to be followed. Mr SMITH(Bass)(10.10) —These three Bills-the Bass Strait Freight Adjustment Levy Amendment Bill, the Bass Strait Freight Adjustment Levy Collection Amendment Bill and the Bass Strait Freight Adjustment Trust Fund Amendment Bill-come before the House with the support of the Opposition. Many people probably will think that these Bills deal with the freight compensation scheme between the mainland and Tasmania, but they do not. They are concerned with oil legislation and relate to a scheme which I shall describe. Primarily it is compensation for freight disadvantages that are borne by refiners who do not have the good fortune to draw their oil stocks from Bass Strait into refineries in the Western Port area and have to carry them to their refineries in other parts of Australia. The Bills comprise a package of measures which are proposed as a consequence of the Government's decision to deregulate parts of the crude oil market from 1 January 1988-a move supported by the coalition and a move which will bring about major changes in the oil industry in this country. The main purpose of the Bills is to ease the transition from a regulated to a free market and to ensure equity among refiners. The crude oil marketing arrangements as they exist at present fall into three main categories. The first is the crude oil allocation system-a scheme introduced back in 1965 to provide producers with a guaranteed market for their oil and to give each refiner-marketer a share of indigenous production. The existing provisions date from 1 January 1985. All production from small ventures-that is, up to 50,000 barrels a day, other than Bass Strait producers-and the first 350,000 barrels a day of Bass Strait output are allocated to refiner-marketers in proportion to their market shares of major refined products. Condensate, which is a product similar to oil, and Jabiru crude, from the North West Shelf area, are not covered by this scheme. The latter, because of its remoteness, is available both for export and domestic sale. Production in surplus to that required by the allocation scheme may be exported. As people will know, last year we exported somewhere in the vicinity of $300m worth of oil from this country. The Customs Tariff (Stand By Duty) Act 1985 enforces the refiners' obligations to use the allocated domestic crude by providing penalty import duties on light crude and products. The second category is the import parity pricing mechanism, which we have all heard about and of which I suppose few of us know the detail. It works something like this: sales of allocated crude oil are based on the import parity price which is calculated by the Government from a formula which determines the price which Australian refiners would have to pay overseas for oil of similar quality. An import parity price is determined for each producing area. The formula takes into account the price for Arab light or its equivalent, the costs of shipping such crude from the Arabian Gulf to the refinery, an allowance for the quality differential of the oil, the exchange rate of the Australian dollar against the United States dollar and domestic freight allowances. I turn to the third category. The Bills we are debating this morning-the Bass Strait coastal freight adjustment Bills for want of a better way to describe them-partially reimburse refiners remote from Bass Strait for the higher costs of shipping the oil to those refineries. The allocation sales of Bass Strait oil since January 1987 have been subject to a surcharge of 29c a barrel, which is determined at 65 per cent of the coastal freight allowance component of the import parity price. The proceeds are redistributed from a trust fund to refiners in proportion to movements of allocated Bass Strait crude, freight costs for shipping and actual pipeline costs. So the moneys collected from the industry, which are redistributed back to the industry, are not taxpayers funds. The transitional arrangements imposed by the Bills are interesting. The Bass Strait Freight Adjustment Levy Amendment Bill provides for the collection of the Bass Strait coastal freight adjustment levy at December 1987 rates into 1988 from those refiners who have not met their allocated obligations by January 1988. Some of them have not taken up their full allocation and will not have taken it up by the end of December. The Bass Strait Freight Adjustment Levy Collection Amendment Bill removes the liability on Bass Strait producers to pay the Bass Strait freight adjustment levy on exports and free market sales of crude oil made on and after 1 January 1988. Finally, the Bass Strait Freight Adjustment Trust Fund Amendment Bill will allow disbursements from the freight adjustment trust fund to be made at the end of January 1988 to producers and refiners. The Bills are intended to be repealed in 1988 following the finalisation of all outstanding payments and disbursements. As I said, the coalition supports the Government in the move that it has taken because this is a necessary step to give effect to the deregulation of the oil industry up to the refining stage. Many of us are wondering about the effect of deregulation. Deregulation will have the effect of placing crude oil in the same category as any other commodity-one which the seller will need to package, promote, establish a price for, and develop a market for. Australian oil producers, who currently provide over 80 per cent of our domestic oil needs, will be able to sell their crude oil at freely negotiated prices and volumes. Australian oil refiners will be able to buy their crude oil and other refinery feedstocks from producers here or overseas who offer the best deal in terms of quality, price and delivery. This will mean some interesting scenarios for Australia in the new year. It is interesting to see an article in today's Australian. Those who are interested in oil should look at that article because it says, `Prices sinking in a sea of oil'. It is anticipated that there will be an oversupply of oil next year and that the Organisation of Petroleum Exporting Countries (OPEC) is looking to increase production and the article deals with how that will affect price. It says: Forecasters are reworking their 1988 estimates. It should be remembered that oil remains the main fuel in most industrial countries and accounts for some 40 per cent of all energy consumed, but there has been a downturn in international economies and less travel. The article contains interesting figures of the number of Americans who are expected to buy motor cars, and so on. This will probably mean that demand will not grow as rapidly as was thought, with the oversupply, overpumping and the buildup in stocks of Organisation for Economic Co-operation and Development countries which has taken place in the last eight to nine months because of the threat of interrupted supplies due to the strife in the Middle East. Prices could fall and crudes become available to Australian refiners at far cheaper prices. It will be interesting to see whether that eventuates and what benefits might flow to consumers in this country. All of us, regardless of where we stand in this Parliament, will be concerned about the high price of petroleum products, and I shall comment on the extent to which governments of both political persuasions have seen the oil industry as a mechanism for raising revenue. If one looks at the components that make up the consumer price index, one sees that the area of the index that has moved the fastest in adding to the increase in the CPI is transport costs. A not insignificant role in that movement in CPI transport costs has been played by increases by Federal and State governments in taxes on the oil industry. It is interesting to look at industry reaction to deregulation. The oil industry, with some minor exceptions, is clearly divided into three broad camps. There are those in favour of deregulation, including the refiners-BP, Shell, Mobil and Esso-and the Bass Strait producers, Esso and BHP. It is interesting to know who might be the beneficiaries of this change. I looked recently at the Review of Business Regulations on the Indigenous Crude Oil Marketing Arrangements of the Business Regulation Review Unit dated April 1987. Its concluding comment was: On existing forecast production levels, the balance of relative advantage is likely to shift towards producers over the next five years. I can see why domestic producers would favour deregulation and the refiners-primarily BP, Shell, Mobil and Esso, which are closer to the primary source of domestic production in Bass Strait-would also favour it. As I have said, the refiners argue that deregulation will enable the Australian oil industry to respond more quickly to changing circumstances. It will allow Australian refiners access to more competitively priced crude oil and feedstocks and will increase their efficiency and make them even more competitive internationally. Shell and Petroleum Refiners Australia, which is the Mobil-Esso concern with refineries at Geelong and Altona in Victoria, will continue to take the bulk of their feedstocks from Bass Strait because they are both connected by pipeline. The producers argue that deregulation will benefit industry and the community through increased economic efficiency and investment incentive. The deregulation group maintains that oil exploration will be virtually unaffected by deregulation. I certainly hope that that is the case. When this House debated the cash bidding legislation and also the resource rental tax legislation, much comment was made by Opposition members as to our worries about the declining amount of exploration taking place in off-shore areas in Australia. We hope that that turn-around will speed up the level of exploration that will take place, because with a declining self-sufficiency, regardless of the fact that demand in Australia for petroleum products may be lessening slightly, there will still be a large use of oil in this country. With a drop in domestic reserves in Bass Strait there will be a window of crisis in the near future. If we want to continue to use oil products, they will have to be supplemented by imports. The cost of imports needed to maintain existing levels of usage is estimated to be in the vicinity of $3 billion to $4 billion. That cost will have to be added to our balance of trade at a time when it is not in a healthy state, to say the least. When the figures released yesterday indicate that all is not well, all of us want to see greater exploration in this country. It is partly because oil exploration is governed by a variety of factors, such as the tax regime, as I have mentioned, oil prices, prospectivity and access to acreage, that Australian refiners, it is argued, have a strong incentive to seek secure sources of supply at home. I certainly hope that is the case. Interestingly, the Broken Hill Proprietary Co. Ltd argues that a free market is likely to attract exploration from substantial overseas groups. BHP has been leading the charge in the utilisation of dollars to develop exploration capacity overseas. One hopes that perhaps if BHP sees some benefit in others coming here to explore for oil it will be prepared to invest its shareholders' funds in the development of exploration potential in Australian off-shore areas. I sometimes wonder whether BHP is having a bob each way. In any event, the smaller to medium producer-explorers, such as Santos Ltd, disagree. Santos claims that the free market will transfer funds from small producers to large refiners which, in turn, will reduce funds available to small producers for investments, including exploration ventures. This will lead to the rationalisation of shipping and fewer calls at inland producers' ports. It will force small producers to make additional investments in infrastructure such as storage at delivery points and marketing teams to operate on the world market. In contrast to the large refiners, the small producer-explorers do not have marketing experience and expertise on the world stage. It will also remove the security, that is the allocation system, which small companies need to explore in otherwise uneconomic areas. The coalition went to the last election with an oil policy which in part reflected the concern that we had about the small producers. Our policy was to phase out the crude oil allocation system which, as I have said, has been in place for some considerable time except for the small producers. One of the detailed papers given at the Australian Financial Review's energy seminar recently was delivered by a Mr Nicholls from Hartogen Energy Ltd. It was particularly pertinent. He made the point that the small producers in this country have a role to play because small producers, given the right incentive and encouragement, can become large producers. We want to ensure that, whatever mechanisms and tax regimes we put into place, we provide the incentive for smaller producers to become larger producers. If they are domestic Australian companies, then the community, taxpayers and investors will be far the richer. We should not discount the importance of the small producers. If the deregulation system is put into place we must keep an eye on small producers to make sure that their role in the market-place is assured. I note with some interest that the Government has not formally stated how it will ensure that the small producer's product will be uplifted and refined. It seems to be operating on wishful thinking. I am aware of no formal arrangements between the Government and the major refiners to ensure that the product of small producers will be taken up. It is reported in the Australian today that the International Energy Agency forecasters are reworking all their estimates because there will be large over-supplies of oil in the new year. There will be the temptation for refiners to get the product at the best possible price. One does not blame them for that. This could well mean that smaller producers in Australia, having no given way in which to sell their product in Australia, miss out altogether. All of us will be watching that with interest. The Go-vernment has not said anything at all about small producers. There are no formal arrangements that I am aware of for the product of the small producers to be taken up. I will be interested to see whether the Minister, when he responds, can throw some light on that particular point, because I think it is important. The discussions I have had with the smaller producers, and indeed the larger producers, indicate that they also are wondering how it will work. It may all sort itself out, but I think that point needs to be kept in mind. The third group comprises refiners such as Ampol Ltd and Caltex Australia Ltd which, with refineries further from Bass Strait, favour the present freight equalisation scheme, but realise, I suppose, that it must go in a deregulated environment. Indeed, the primary beneficiary of the freight compensation scheme that we are debating would be Caltex, and its view is that it has to work out a system whereby it can deal with the added freight costs. It is an interesting coincidence that an article appeared today on the Ampol annual general meeting which was held yesterday. There was also another article in the Australian newspaper. Mr Goodluck —A very interesting article. Mr SMITH —I note that the honourable member for Franklin is in the chamber-a man who is well known for his views on and interest in the oil industry. Mr Beale —And the honourable member for Deakin. Mr SMITH —Look, we have another one. The honourable member for Deakin is well known for his long association with, and investment in, domestic oil production in this country, a man who was there-- Mr Martin —He has already done that. Mr SMITH —I notice that the honourable member for Macarthur is giving him a wave and applauding his efforts. It is good that we have in the Parliament such people who are concerned about these issues. It is interesting that very few people are on the speakers list for this debate. Yet governments rely to a large degree on the massive amounts of tax they draw out of the oil industry. All of us in this chamber receive many representations from consumers about the costs of fuel. Yet very few people in this chamber seem to want to take the time to try to understand it all. I come back to this article in the Australian in which the comments of Sir Tristan Antico, the Chairman of Ampol, were reported. It says: The argument emerging between the refiners about how the maximum wholesale price is derived comes down to whether the non-Melbourne based refiners will be compensated for the costs of freighting Bass Strait crude to their refineries when the refiners in Melbourne have cheap access to Bass Strait crude via the Bass Strait-Melbourne pipeline. It was that argument that led in earlier days to the establishment of this legislative mechanism to compensate for the freight disadvantages that had been suffered. Interestingly, the article goes on to discuss the arrangements under the new deregulated system that will start on 1 January. It quotes what Ampol, Shell and Caltex believe. It is quite interesting that there are variations in the stands that all of them are taking. There is not time now to go into any detail about that, but I commend that article to people who are interested in the matter. I wrote to the Prices Surveillance Authority (PSA) because I have been somewhat critical of the fact that it has not yet stated how it will determine the maximum wholesale price. Today, I got a letter back from the Chairman of the Prices Surveillance Authority. I will read that into the Hansard record: . . . I advise that the Authority has not determined how it will approach its tasks in relation to petroleum product pricing after indigenous crude oil prices have been deregulated. Submissions from and consultations with refiners and other interested parties are presently under consideration. It seems unlikely that our methodologies will be determined until some time in December; any such determination is likely to be of an interim nature, to have regard to the development of trading in indigenous crude oil. So no decision has yet been made. If one looks at this article in the Australian one can see that the industry is putting contrary submission to the PSA. All I can say is that we have deregulated up to the refining stage but we are still highly regulated in the marketing stage. We would like to hear from the Government how it believes the whole system will work. It is going half way with deregulation but not the whole way and we are all left up in the air. The Prices Surveillance Authority obviously does not know exactly what will happen. Of course, we are dealing with a product which is subject to the vagaries of world supply and international conflict, so there are many aspects that have to be considered. I do not know whether the Government has fully considered all of them yet. The Prices Surveillance Authority does set a maximum wholesale price for petrol, which is adjusted to compensate for changes in crude oil prices, the United States exchange rate, freight costs, wages and so on. It allows the oil refiner and wholesaler a reasonable mark-up. The wholesale price is uniform in all capital cities. For example, if the wholesale price is 51c, on top of that must be added the State government franchise fee, which in Victoria is 4.24c a litre, and a gross margin for the seller of, say, 4c a litre. This would give a normal price in Melbourne of between 59c and 60c a litre. Of that 59c or 60c, the Federal and State governments together pocket 33c while the crude oil producer takes 8c. When the retail price is discounted by 10c to 49c, the governments and producers still take their combined 41c. This leaves the refiner with about 5c and the reseller with 3c. The refiner has forgone 9c and the reseller 1c. The situation where a service station franchiser has paid the usual contracted price for a load of petrol and an independent station down the road has bought a surplus stock of petrol from the same company on the same day for several cents per litre less is not likely to change for the better in 1988. With deregulation, prices are likely to fluctuate by even wider margins, and more frequently. Companies will be free to buy their crude oil wherever they want and pay the lowest price they can find in the market. Australian crude will have to be priced competitively and the price will have to be adjusted frequently to follow movements in the world market. The change may reduce the consumer price of petrol slightly, by 1.3c per litre estimated by the Minister for Resources back in June, but deregulation will make it very difficult for the Prices Surveillance Authority to check supply costs of crude oil, a major component of the final price, so a major killing on the spot market may not result in lower consumer prices. I issue that warning. In future, fluctuations in consumer prices are likely to be much sharper because supplies will vary more in origin, price and cargo size, causing changes in actual cost of the refined products. Speculative behaviour in the supply of petrol may further exacerbate price movements. Indeed, the Australian Consumers Association (ACA) notes that deregulation should be good for the consumer, if it does really give us cheaper petrol. The ACA has called on the Prices Surveillance Authority to assess the performance of each oil company on a yearly or half-yearly basis to ensure that the maximum wholesale price has been calculated correctly, and to reduce the maximum wholesale price closer to the average retail market price in the area. Of course, the oil industry goes further. It claims that greater stability and competitiveness would occur if the wholesale marker price were removed. Indeed, I have some sympathy with that position. The industry claims that this would allow the Prices Surveillance Authority to exercise the same degree of security over petrol prices as it does over other consumer sensitive products-indeed, why is it that we must treat oil so differently from other products?-and would be more consistent with the deregulation of the crude oil market and with the widely accepted policy of making the Australian economy more responsive to and integrated with the world economy. The industry rejects any suggestion that it will be in a position to exploit the public. Factors restraining such exploitation are: strong competition among refiners and among resellers for their share of a market which is growing by one per cent per year, competition from product imports, and the very effective-although there are some question marks over this-trade practices legislation in Australia. It will ensure that deregulation will create far stronger competition at the refining level. One hopes that the consumers will get the benefit. The big losers if all of this discounting continues are the service stations. What will happen in Australia is that there will need to be a greater volume throughput in service stations around this country. I believe we have in the vicinity of 10,760 service stations. The number of service stations will decrease over time and we will need to see greater volumes going through service stations. But this new change will create greater pressure for that rationalisation to take place. The Victorian Automobile Chamber of Commerce says that the service stations and the public would not benefit by a simple removal of the wholesale marker price. It says that wholesale prices offered by oil companies must be available to every retailer, not just some of them. If the present price discounting continues, there is every likelihood that service stations will go out of business. The coalition parties welcome the drive towards deregulation of the oil industry. It is necessary, but it does have risks. However, the issues which have arisen as a consequence of deregulation are exceedingly complex ones. As I have said, we have witnessed the different positions which the oil companies are taking about how the wholesale maximum price should be set by the Prices Surveillance Authority. The main beneficiaries would appear to be the large well-established companies which already have the infrastructure and expertise to compete on the world stage. The effects on smaller companies, especially oil producers and retailers, as well as the consumer, will need close monitoring if no one is to suffer unduly. The coalition parties believe that perhaps the crude oil allocation system should be retained for small producers. I would like to hear in the Minister's response what arrangements will be made-if there are to be formal arrangements-to ensure that the product of small producers is taken up and refined. Another important point is that State governments should be encouraged not to intervene in the pricing system. If we have a national pricing system, which I think should be reviewed in any event, and substitute that with all the States getting in and having their bit as well, we will end up in a bigger mess than the one we are already in in terms of oil pricing. State governments ought to keep out of it and not get involved. There is nothing worse than seeing a product as essential as this to Australia's economy become subject to the interfering hands of the States as they try to get their cut. It makes it very difficult for those who want to sink capital into developing refinery capacity and so on. I think that in the longer term it would be a retrograde step for the States to move wholesale into the setting of prices in the oil industry. The role of the PSA in the oil pricing area requires examination and probable abolition. Perhaps there should be an examination of some mechanism whereby the Federal Government can maintain a monitoring role in the oil industry. Of course, that has yet to be determined on this side of the House. At present, we do not believe that the current system is working well. Oil exploration is governed by a variety of factors such as the taxation regime. Earlier, I referred to cash bonus bidding and the resources rent tax. A whole range of issues affect the investment of companies in the oil industry in Australia. Many honourable members - the legislation will be passed with the support of this side of the chamber - are looking very closely at the deregulation of the oil industry up to the refinery stage to see what happens. As I have said, the oil industry is not a national industry; it is an international industry. We are affected by what happens in the OPEC area. It can be seen that OPEC, in its next round of price setting in early December, may maintain the price but seek to increase volumes. As I understand it, the result could be to place more crude on to the spot market. As I have said earlier today, the deregulation that will be part of the Australian oil system after 1 January could mean that refiners here may be able to pick up cheaper oil on the spot market, but that will not mean necessarily that those prices will flow through to the petrol pump. That is partly because of the massive take by governments in this country. In the couple of minutes remaining to me, I draw the attention of honourable members to an interesting little graph that gives a breakdown of the price of petrol in this country. The wholesale maximum price as set by the Prices Surveillance Authority is 54c. The graph shows that 35c of that is taken up by government taxes and charges. As I have said so often, if we are to continue to tax petrol as we do now, we ought to be looking far more carefully at its consequent economic impact on the CPI. This country is suffering an inflation rate which is three times higher than that of some of our major competitors. We have seen in the past that there are some benefits in taxing petrol, because of conservation aspects, but, at the same time, we must weigh that against the economic impact and the flow through to the CPI and the inflationary impact that that has. I seek leave to table the graph. Leave granted. Mr SMITH —I thank the House. We support the legislation. It is a necessary consequence of deregulation. This legislation is not about the Bass Strait compensation scheme, which will be a debate for another day. I thank the House. I hope that those who have listened and who will continue to listen to this debate will take some interest in the oil industry. We can be certain that in the next six months the oil industry in this country will become the subject of intense speculation and public discussion. All of us in this chamber ought to be aware of what is going on. Madam SPEAKER —Order! The honourable member's time has expired. Mr MARTIN(Macarthur)(10.40) —I feel somewhat of an infidel entering the debate this morning. When one looks at the speakers list one sees that it is one New South Welshman versus three Taswegians. On those numbers alone I think I am guaranteed to win. The Bass Strait Freight Adjustment Levy Amendment Bill, the Bass Strait Freight Adjustment Levy Collection Amendment Bill and the Bass Strait Freight Adjustment Trust Fund Amendment Bill are a package of measures to enable the implementation of arrangements for the transition of marketing of Australian produced crude oil from a regulated to a deregulated or free market. The honourable member for Bass (Mr Smith), who spoke immediately before me in this debate, went to some length to point out some of the perceived benefits that will flow into the Australian economy from this decision. I support him in those comments. The Government obviously welcomes the Opposition's support for these particular measures. The transitional arrangements will be known as the Bass Strait freight adjustment scheme. This scheme provides partial compensation to refiners for the cost of transport by sea or pipeline of allocated crude oil-that is to say, Bass Strait crude oil purchased at Western Port in those volumes and at the import parity price determined by the Government-to their refineries for processing. The amount of compensation is based on the actual transport cost incurred by refiners in transporting their allocated oil from Western Port to the refineries. So there are no hidden charges, no hidden taxes; it is all up front and everybody knows where he is going. As the House will be aware, the present crude oil allocation scheme will terminate on 31 December this year and be replaced by deregulated marketing arrangements from 1 January 1988. Notwithstanding the comments that have been made by the honourable member for Bass about the position of the Prices Surveillance Authority in trying to establish the correct procedures that will operate for the future, the Government is of the view that the necessity for implementing these sorts of proposals have been demonstrated. The support from the major oil companies in Australia is there. As I have indicated, I believe that this legislation will lead to benefits to Australian consumers. Under the existing marketing arrangements, refiners are subject to the requirements of the crude oil allocation scheme, under which they are obliged to lift over a calendar year an average of 350,000 barrels of crude oil a day from Bass Strait and the total production of crude oil from other producing areas, excluding, of course, Jabiru. Each refiner is required to purchase a share of the total allocation obligations, with the share determined according to its market share of sales of specified petroleum products. Crude oil purchases are made at the prevailing import parity price for the relevant producing area. I would like to make one or two observations about the import parity pricing (IPP) system that operates in Australia at present because, again, the honourable member for Bass made some comments about this matter. We should never lose sight of the fact that this particular system was put in place by a previous conservative government and this Government has chosen to maintain that system in operation. Continually to come into this place, as a number of speakers do, and claim that this particular mechanism is the cause of all the problems in the oil industry and is keeping consumer prices extremely high is not, I believe, a true reflection of the position. I ask honourable members to take that point into consideration when making their contribution to the debate on the question of pricing petrol products. Refiners who are underlifted against their Bass Strait allocation obligations as of 1 January 1988 will need to clear their underlift in 1988 before being permitted to purchase Bass Strait crude oil on the free market. This has come about because it is possible that a number of refiners may not have lifted their share of the 350,000 barrels per day by the end of this year. Therefore, there is this need to implement some transition arrangements to ensure equity between all refiners. Obviously the Government is not in a position to try to facilitate one refiner's advantage over another. The amendments proposed in the three Bills provide for four major things: firstly, that the levy on liftings by refiners that have not met their allocated obligations continue to be collected into 1988 until those obligations are met; secondly, that when all refiners have met their lifting obligations the Minister will set a nil rate of levy and thus effectively terminate the scheme; thirdly, for removal of the liability from the producers to pay the levy on exports and free market sales after 1 January 1988; and, finally, for the disbursement of the funds in the freight adjustment trust fund that have been collected under these arrangements. The Government envisages that the three proposed Acts will be repealed in 1988 following finalisation of all outstanding payments. Something has to be said as to why the Government is moving from the allocation to a deregulated marketing arrangement necessitating the Bass Strait freight adjustment scheme. The Government is pursuing this because in its view, and I believe that in view of the fact that the Opposition supports the legislation it must be a view supported on that side of the chamber, this scheme will generate a number of benefits for this country. This first and major benefit, of course, is that it will produce a greater efficiency in the use of the nation's oil resources. I think that is of paramount concern in an area where quite clearly the supply of Australian oil is fast dwindling from a number of sites. I support the comments that the honourable member for Bass has made about the need to try to stimulate further exploration. However, unlike him-and I think I argued this point when I followed him in a previous debate on oil matters in this place-I believe that the scenario is in place through the resource rent tax regime to encourage rather than discourage the explor- ation for further oil supplies in this country. As honourable members would be aware, the oil in Bass Strait, because of that very point I am making, is of a comparatively high quality. It is low in sulphur and high in gasolene content, and by exporting this high quality oil and importing greater quantities of lower quality oil for use in our refineries, we are stretching our oil resources further. I believe that is an appropriate way to go in approaching a conservation policy for Australia's oil reserves. There is also the possibility of a trade benefit in this arrangement being put in place. Finally, another possible benefit from deregulation is a reduction in the price of petrol, perhaps by 1c or 2c a litre. Our friend on the other side the honourable member for Franklin (Mr Goodluck) is going to contribute to the debate shortly. I am sure that is something which is near and dear not only to his heart but also to the hearts of all honourable members of this place and to all consumers of oil products in Australia. A further telling argument for the move to deregulated marketing arrangements is that quite simply, as I have indicated, we are running out of Bass Strait oil. Production is slowing every year, and when the end of production looks imminent, obviously there will be a push from overseas for Australia to move to a free market. It would appear therefore that this is inevitable. If it is inevitable, perhaps the Government should make arrangements to ease into that position so that the consumers are not kicked in the teeth all in one go. I believe this is what the Government is endeavouring to do. The Government believes it is best that we deregulate as early as possible and thus gain any benefits as soon as we can. In this way we will be able to prepare our industry structure for that inevitable day when our Bass Strait oil resources are exhausted and we must resort to an open market. This argument is being advanced when we look at the whole concept of the import parity pricing system. No doubt members of this place have received from time to time over a long period letters, telephone calls and inquiries from consumers asking why petrol prices are going up, why we have all these fluctuations and what this import parity pricing system is. I think it has to be said, and this needs to be recorded yet again, that if that system was not in operation the effect of simply taking and using all Australia's oil resources without a conservation policy, and perhaps selling them at a much lower price-obviously we could do that in this country-would be fine for that time while the oil reserves lasted. But when we came to that crunch time, that inevitable day when those reserves no longer existed and we had to swing to a greater reliance on imported oil products, the price of which is likely to be much higher, then the shock that would go throughout the economy would obviously be far more sustained. Its effect, flowing through to the consumer price index increase and a range of products, needs to be addressed and the consideration therefore of the Government is that we cushion those effects by having an IPP policy, by taking a very strong approach to conservation in terms of Bass Strait crude oil and also by encouraging further exploration. I conclude on a couple of points in response to issues raised by the honourable member for Bass in his contribution. Firstly, let me say that I also support him wholeheartedly in his call for the Broken Hill Proprietary Co. Ltd to look to Australia in which to invest in exploration for oil resources. We have seen the Big Australian, as it was once known, going overseas in a number of areas. I suggest that that company should play a leading role in its own country by leading the charge for further exploration and that it should endeavour to conserve Australia's oil reserves. Secondly, with regard to the taxing question associated with oil products, I have to say to the honourable member for Bass that clearly all governments would, if at all possible, like to see the lowest taxation regimes put in place if they could sustain their outlays and responsibilities in government in providing a range of services. Of course, through some of the taxes and even through the 1c a litre levy for the bicentennial road development program and so on, the Government is benefiting all Australians by having extra resources available to put back into service provision. I am talking about roads, the national highway program and a variety of other things that exist within both the electorate of the honourable member for Bass and my electorate as well as throughout Australia. We have to weigh up a disincentive that some people might perceive of a levy or additional tax regimes against the greater community benefit that comes though improvements in transportation systems, in networking and so on around Australia. As I said at the outset, I believe it is appropriate that all members of this House are as one in support for these Bills. I think they will provide, as a transitional arrangement, a very strong working arrangement in the Bass Strait. We certainly look forward to the announcements of the Prices Surveillance Authority as to how the changed arrangements will operate after 1 January. We also look forward to continued exploration for additional resources in oil for all Australians. Mr GOODLUCK(Franklin)(10.53) —The honourable member for Macarthur (Mr Martin) said there were three Taswegians following in the debate, the reason being that we were conned. We were not conned -- Mr Smith —There are only two good ones. Mr GOODLUCK —Two good ones, yes; I beg your pardon, and a third one. No, I had better say three Tasmanians, and the reason being that we thought this debate was on the freight equalisation scheme. The honourable member for Denison (Mr Kerr) did too. He can smile but he thought so too. He thought it was about freight between Tasmania and this other island, Australia, and that is the reason he got involved. I am sorry that I am speaking before the honourable member for Denison, because I cannot come back at him and at what he says about me and about petrol pricing in Tasmania. The honourable member for Denison had the audacity to say, `The honourable member for Franklin has been talking about the price of petrol for 12 years, and what has he done?'. What a horrible, nasty thing to say. Never mind, I will come back at him later on that. It is interesting to see the Minister for Resources (Mr Peter Morris) at the table, because I think he issued a Press release during the week and said that we should use liquefied petroleum gas (LPG) more than we have been, and I agree with that. But the Minister also made a few caustic remarks, such as, `I have heard that speech from the honourable member for Franklin about 15 times'. I always say that it is a shame we have not used LPG as much as we should have. I was in a taxi earlier this week and I said to the driver-I tell the honourable member for Bass that he should always talk to taxi drivers -- Mr McGauran —They support you. Mr GOODLUCK —They all support me, as do the pensioners and other people in Australia, because I tell the truth. I said to the taxi proprietor, `What do you use-LPG or petrol?'. He said, `Bruce, if I didn't use LPG I would be out of business'. That is in Tasmania where the price of LPG is about 10c a litre more than it is in Victoria and New South Wales. The problem is always the freight component and the fact that we do not have the storage capacity, et cetera. However, I agree with the Minister: we should introduce legislation in this country to make it absolutely necessary for a certain proportion of motor vehicles registered on the roads in Australia to use LPG. Many people get confused with the oil industry and that is probably the reason why there are not many speakers in this debate. It is a confusing issue; it is confusing to consumers; it is confusing to politicians, and it is confusing to everybody in Australia. I forget the amount of LPG that we export to Japan. The Japanese are laughing all the way to the cookers because they cook with it and use it in their motor vehicles. And they are saying, `What are those silly Australians doing with it?'. LPG can be used in a motor vehicle. It is efficient and non-polluting, although it reduces power a little. One does not need to change spark plugs so often or to change the oil, and LPG is efficient. One of the manufacturers-I think it was Toyota; forgive me if I am wrong-introduced an LPG-driven vehicle and regrettably it was a failure. There are options on differentials, options on gear boxes, options on the types of seats in motor vehicles; we have all the options except the option of having an LPG-driven vehicle or a petrol driven vehicle. Toyota introduced such a vehicle with just the option of LPG. People started to read that it was dangerous and that LPG could not be bought, et cetera. As a consequence, the motor vehicle was a failure. Would it not be a sensible idea for the manufacturers of motor vehicles in this country, with the push and power of governments, to say, `All manufacturers in Australia should make, say, 25 per cent of their vehicles LPG driven or have the alternative of petrol driven vehicles.'? If this were to happen we would conserve our petrol and we would also be able to utilise our LPG. That is just a suggestion about which the Minister talked during the week and I think it is one that could be looked at very seriously. It would greatly assist consumers in Australia. We are deregulating the industry up to the oil refiner. Again I compliment the honourable member for Bass (Mr Smith) on the work he has put into his shadow portfolio. He has detailed this matter and has spoken about what will happen if we do not conserve, if we do not get our refiners to refine or if we do not continue oil production in this country. We will be in strife. I only hope that this move will be successful. We have talked about consumers and the Prices Justification Tribunal or the Prices Surveillance Authority. The letter from the Chairman is interesting in relation to what will happen to oil pricing after 1 January. Consumers will benefit, but the poor old service station proprietors, the suckers in the game-if honourable members do not mind my saying that-the pawns in the game, the people whom consumers blame for the price of petrol, are innocent bystanders. I have been critical in the past of the oil industry and oil companies. I am the first to agree that we need oil refining in this country. We need a vibrant continuing oil industry and we need oil companies which provide employment opportunities. And governments need their taxation. This Hawke Government needs its taxation. The Treasurer (Mr Keating) said that it was stealth at the petrol pumps when the Fraser Government was in power, but the Hawke Government has not been able to stop the stealth at the petrol pumps. Mr Beale —They have got worse. Mr GOODLUCK —Prices have got worse. Instead of the price of petrol going down, it has gone up. Mr Beale —It has gone down in the rest of the world. Mr GOODLUCK —The price has gone down in the rest of the world, but up in Australia. The Government cannot look at the Opposition and say, `When you were in government, the Fraser Government introduced import parity pricing and the price of petrol went up'. It went up as a result of world shortages at that time. We needed to conserve petrol and to explore. I did not like the price of petrol going up, because it affected the consumers of Australia, transportation and a lot of things. Regrettably, it had to be that way and that is what happened. However, the Government has not been able to stop using it as a mechanism for raising taxation to support some of its schemes. Many people suffered as a result. We need a very vibrant industry. The honourable member for Bass said that he hoped that deregulation would assist. He said, I repeat, that it would help the consumers. That is the important part. It we can reduce the price of petrol in Australia in a fair way it will be advantageous to the city of Hobart and the State of Tasmania. The honourable member for Denison is yawning. Fancy yawning when I am making a speech! That is typical. Mr McGauran —Hodgman never would have. Mr GOODLUCK —The former honourable member for Denison would not be yawning; he would be supporting me and saying that we need cheaper petrol for the people of Tasmania, including the people of Hobart. Mr McGauran —He was a fighter for his people. Mr GOODLUCK —Yes, he would not be yawning. Never mind. I found an article in today's Australian most interesting, especially what each general manager of the oil companies had to say about the future pricing mechanism for oil. What they all say is different; none of them agree. The article stated: An Esso Australia Ltd spokesman said the company would prefer not to have a maximum wholesale petrol price. `We never reach maximum price anyway, and we're usually at a discount of about 4c to 5c a litre,' he said. The Prices Surveillance Authority fixes a maximum wholesale price for petrol in every capital city. Each State government then adds its charge and that is the wholesale price to the service station proprietor. He pays for the petrol, which is, say, 54c a litre, and he puts on his margin and then sells it. My argument has been that the price varies in every capital city. We talk about all Australians supporting the oil industry. We need a vibrant industry; we need the taxation revenue from it; we need to make certain that we will be self-sufficient in the long term and that we will not be dependent on Arab countries or other people who could torture us and have us over a barrel at any given time. We need to be self-sufficient in this country. But then all the little devious actions start to occur. Oil companies find that there might be a glut of petrol in one of the heavy volume areas in Melbourne, so the price dips below the wholesale price. That is exactly what the man from Esso said happens-`Regrettably, we are always selling petrol between 4c and 5c a litre below the wholesale price'. But the country areas of Australia, including Tasmania, always pay the full maximum price. There is no discounting for them. That is where all the problems occur and that is something which we should look at. When we get back into government let us bring back some fairness into the oil industry, particularly at the retail level. All Australians should get a fair opportunity to buy petrol at a fair price if they are to pay a high price for the good of this country. I support the legislation. I could say a lot about it, but I will not. I hope that after 1 January the legislation will be in the best interests of the refiners, the consumers and those poor old service station proprietors who lease their service stations and all of a sudden are attacked left, right and centre. People say that there are far too many service stations and that there are roster systems, et cetera. All the poor devils are trying to do is survive in a market-place that has been created by oil companies. Once upon a time a service station was built on every street corner. The oil companies knew what they were about. They were buying cheap real estate and setting up service stations left, right and centre. All of a sudden, it was necessary to rationalise. Now it is necessary to have big multi-service stations and cut out all of the small people. I do not know what we will do with them and their employees. I do not believe that to cut them out altogether would be the only way we could get cheaper petrol. I do not believe that in its entirety. It is something that should be looked at very seriously and debated in this Parliament with the good will of all members. Mr KERR(Denison)(11.05) —The history of the measures to which the Bass Strait Freight Adjustment Levy Amendment Bill, the Bass Strait Freight Adjustment Levy Collection Amendment Bill and the Bass Strait Freight Adjustment Trust Fund Amendment Bill relate is important to understand. The oil import parity pricing scheme was introduced by the former Fraser Government for a number of very appropriate reasons. At that time there had been a rapid surge in the cost of imported crude oil and as a consequence there was a huge price differential between the prices being obtained for imported crude and oil being produced domestically through Bass Strait. In fact, at some stages the price differential was extreme. Local crude would be produced at around $2.80 a barrel and the price for imported crude was around $40. As a natural consequence of that, domestic demand for local crude soared and there was a real prospect of a too rapid depletion of local resources and the threat of circumstances arising in which Australia would be totally dependent on overseas sources for oil imports. So the former Government acted to introduce a system of import price parity for local oil to ensure that that circumstance did not arise. Times have changed. It is now seen as appropriate-and the Government believes it is appropriate-to change our policy settings. What has been occurring is a gradual decline in the amount of the available Bass Strait resource, so that different policy responses are required. In response to this necessity the Government has decided to deregulate the Australian crude oil market. This will have a number of effects which have been discussed by previous speakers in this debate. I note that both sides of the House are of the view that the benefits of this move will exceed the possible detriments. Certainly it seems that the benefits will include two things. First, the move will permit the most efficient use of the available resource, including potentially the export of some component of Bass Strait crude, which is of a very high quality. Secondly, it will impact in a slightly reduced price of petrol at the pump, which is something that everyone will welcome. We now have a number of pieces of legislation which are necessary to operate as complementary measures until the ending of the scheme. The crude oil import price parity scheme operated in such a way that all refiners were required to take a proportion of oil from the Bass Strait oil fields. Naturally that meant that those refiners closest to the Western Port site would have a clear cost advantage. Oil refiners in Melbourne would be able to obtain their crude from the Bass Strait field at much lesser prices than those in Sydney and, of course, particularly those in Western Australia. A scheme was evolved in which a trust fund was established whereby the cheaper refiners-those able to access cheap crude-were required to pay into the fund to subsidise the costs of refiners who were more distant from the Bass Strait oil fields. With the end of the import parity pricing scheme, there is no longer a need to maintain that price mechanism because now all refiners, wherever they may be in Australia-Perth, Sydney, Melbourne or wherever-can draw from whatever sources they see fit. They no longer have an obligation to import any percentage of Bass Strait crude or, indeed, crude from any other source at all. So we have a situation where there is no necessity for a scheme to exist to even up the transport costs of that crude. The three Bills before the House, in effect, end the oil freight equalisation scheme but provide for transitional arrangements so that those refiners who have not yet discharged their current obligations can do so. From next year there will be a completely free market in crude oil. The pricing effects-and I suppose this is the area where the ordinary consumer is most concerned-will be such that the average consumer will get a small but significant benefit in the reduced cost of petrol. It has been estimated that the pricing effects of the introduction of a free market in crude will represent between 1c and 1.5c a litre to consumers. The Minister for Resources (Mr Peter Morris) has estimated that amount to be 1.3c. For the purpose of this debate I will use that as an estimate. The actual effect of the end of the transport levy scheme-the trust fund arrangements which I have just described-will have an average impact across Australia of no discernible amount at all. Naturally, one would expect that because, the trust scheme was completely funded by the industry. With the removal of the scheme, there will be some advantages to those areas which have access to Bass Strait crude more cheaply, particularly Melbourne. There will be slight rises in some other places where refineries have previously been subsidised for such part of the crude oil trade that they will still be obtaining from Bass Strait crude. An estimate has been made of the effect of this. For example, the Sydney market will bear a one-sixteenth of a cent increase in the cost of petrol. That is because the local refiners in Sydney who were previously using Bass Strait crude and were subsidised for receiving it will no longer be subsidised. To the extent that they draw on that Bass Strait crude, they will have to pick up a small additional cost. But it is only one-sixteenth of a cent compared with an estimated 1.3c a litre benefit. I come from Tasmania and I am most concerned about the Tasmanian impact. Of course, Tasmania has no local refinery and was thus not linked into the levy scheme. Therefore, the effect of the removal of the scheme will have no significant impact at all in Hobart. It may mean that petrol imported from Melbourne will be marginally cheaper and that petrol imported from Sydney will be up to 0.05c a litre more expensive. But, on average, Tasmanians will get a benefit of approximately 1.3c a litre at the petrol pump in cost reductions, and that is something which we should all be pleased about. I cannot leave this debate without some comment and a smile, I suppose, at the expense of my colleague the honourable member for Bass (Mr Smith). He expressed in a most delightful way what many members of the House on this side feel about petrol pricing, particularly in Tasmania. In Tasmania we make the greatest State contribution to the cost of petrol anywhere in Australia. There is a 7c a litre surcharge imposed by the State Liberal Government. The honourable member for Bass said that State governments should not interfere in the oil pricing situation. In a product so essential, he said, the interfering hands of the States should not add to the problem, as they want to get their cut. The shadow spokesman was speaking in the context of the States not being involved in trying to double up on the response of the pricing authorities. It is appropriate to note that in Tasmania the State Government has had its hands in the till, adding to the cost of petrol in the State. When perpetual complaints are raised by the honourable member for Franklin about petrol prices, it is strange that his criticisms are never directed where they should most appropriately be directed, because the only element of the petrol pricing scheme that exists at the moment which is not uniform throughout Australia is State charges. It is in that area where the Gray Liberal Government has imposed taxes on the ordinary consumers of petrol and they are much higher than those imposed by any other State administration throughout Australia. It is a pleasing aspect of this debate that both sides agree that these Bills are appropriate and a correct response to the difficulties we are facing in the rundown of the Bass Strait oil fields. I commend the Bills to the House. Mr PETER MORRIS(Shortland-Minister for Resources)(11.16) —I thank the honourable member for Bass (Mr Smith), the honourable member for Denison (Mr Kerr), the honourable member for Macarthur (Mr Martin) and the honourable member for Franklin (Mr Goodluck) for participating in this debate. The Government welcomes the Opposition's support for this package of Bills dealing with the Bass Strait freight adjustment levy. The honourable member for Bass expressed some concern about the future role for small oil producers and small oil producers being disadvantaged following deregulation. It was clear during the Government's review that it would not be possible to maintain a system for on-shore marketing which sets prices artificially higher than those prevailing elsewhere in the market. It was decided that the best way to provide support for these producers was for the Government to seek assurances from refiners that oil producers producing less than 5,000 barrels per day would continue to have their output lifted in a timely manner and at fair market related prices. From the number and nature of assurances received, the Government is confident that these producers will not be unfairly disadvantaged. However, under the free market small producers will have other options available apart from selling to refiners. These options will include the opportunity to sell to larger producers and pipeline owners or having them act as marketing agents; secondly, using the services of commodity brokers or trading companies; thirdly, forming selling co-operatives or consortia; and, fourthly, by exporting their own oil. Small producers and others may well find opportunities in a free market which were not available or considered in a regulated market. The Government will be seeking to ensure that formal commercial arrangements for the sale of crude oil produced by small producers will be entered into prior to the introduction of the free market on 1 January next. The terms of these arrangements, naturally, are a matter for commercial negotiation. In the course of these commercial negotiations the Government expects small producers to explore the full range of possibilities available to them for disposal of their output. Some discussion has also taken place on the role of the Prices Surveillance Authority as the appropriate body to set maximum wholesale prices for petrol to ensure that consumers get a fair go. That is the Government's view and it is committed to that objective. However, it is not for the Government to impose on the Prices Surveillance Authority a mechanism for determining prices in the deregulated crude oil market after 1 January. The Prices Surveillance Authority is studying the matter, as was mentioned by the honourable member for Bass and as is provided for under its charter. It is acknowledged that the Authority is taking into account the content of submissions from refiners, State governments and other interested parties. I turn to the question of petrol discounting. From time to time in this place we hear many suggestions that government should intervene to stop discounting. I suppose in a way discounting of petrol has become very much like supermarket specials. The discounted price of petrol long term could not be maintained without affecting the viability of service stations-I am sure all honourable members are aware of that-or, alternatively, without reducing the level of service available to customers. We also know that the brand loyalty of petrol purchasers is highly responsive to quite marginal changes in price. In that sense it is a highly priced sensitive market in respect of brand loyalty. The old saying in business that the most fickle kind of loyalty is price loyalty is clearly evidenced in the sale of petrol. People will do all sorts of things to move to other brands or other outlets for relatively minor changes in the retail price. To put it in perspective, the indicative international retail price of petrol in Australia is 55c a litre-the price varies in some parts of Australia-in Canada, 49c; in the United States, 41c; compared with Japan at 123c; Italy, 138c; Norway, 103c; and the United Kingdom, 88c a litre. Much of that information is already known to honourable members and generally to those involved in the industry. I want to take a little further the point made by the honourable member for Denison in respect of the State take from petrol sales in Tasmania. The differences in petrol price between capital cities are attributable mainly to the influence of price discounting and to State government business franchise fees. The franchise fees are levied on wholesale petrol sales throughout Australia, except in Queensland and the Australian Capital Territory. For the record, the franchise fees for leaded premium grade petrol at 1 September 1987 Sydney, 3.53c; Melbourne, 4.35c; Adelaide, 2.51c; Perth, 4.17c; and Hobart 7.15c a litre. In Darwin the figure is 3.5c a litre and in Canberra 3.53c a litre. With the exception of Western Australia, the State franchise fee in cents per litre in Tasmania is more than twice the fee in any other State. So there is some relevance in the point made by the honourable member for Denison. There is one other matter on which I shall conclude my remarks. Those of us who have been here a little longer know full well the zeal with which the Secretary to the Treasury at the time, now a member of another place, pushed through the bureaucracy and Cabinet, with the support of the Government at that time, the introduction of import parity pricing. We all know that the effect of that during the life of the Fraser Government was to quadruple the Federal fuel take. The Federal fuel related revenue quadrupled in that period and the price of petrol trebled. Any comment that comes from the Opposition in respect of Federal revenue from fuel has to be seen in that context and placed in that perspective. Although I listened to the words of support expressed by the honourable member for Bass for this legislation, which is welcomed by the Government, I have to tell him that the Opposition has a problem. If the Government were to adopt the kind of proposals put forward by the Opposition-the abolition of a range of taxes and the suggestion of a considerable reduction in the Federal revenue take from fuel-then at the same time the honourable member has to suggest where other alternative revenue will be produced or what specific government services will be abolished. The effect would be to increase considerably the deficit, but it is not in my view an argument that will stand examination. I thank honourable members for their support for the legislation and commend the Bills to the House. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Peter Morris) read a third time. Consideration resumed from 29 October, on motion by Mr Kerin: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Peter Morris) read a third time. Consideration resumed from 29 October, on motion by Mr Kerin: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Peter Morris) read a third time. [COGNATE BILL: HEALTH LEGISLATION AMENDMENT BILL (No. 2) 1987] Debate resumed from 4 November, on motion by Mr Howe: That the Bill be now read a second time. Mr DEPUTY SPEAKER(Mr Mildren) —I understand that it is the wish of the House to debate this Bill with the Health Legislation Amendment Bill (No. 2) 1987. There being no objection, the Chair will allow that course to be followed. Mr CONNOLLY(Bradfield)(11.26) —This legislation and its associated Act, introduced in the dying days of the last Parliament, contain the most significant range of amendments introduced into the social security legislation of this country for many years. It has been the role of the Opposition over the last five Budgets of the Hawke Government to emphasise on every occasion the fact that social security and the costs contained therein must be one element of the total budgetary process which requires the most close and detailed examination. From time to time we hear members of the Australian Labor Party complaining that the Opposition is without heart and without sympathy for those in need. Nothing could be further from the truth. But at times such as these, when the people of Australia, as a nation, have absolutely no alternative but to look most carefully at all aspects of government expenditure, it goes without saying that social expenditure must be examined in detail to ensure that those most in need get first priority. The Opposition will be supporting this legislation because it contains some very necessary and far-reaching reforms, in the context of not only access to benefits but also some worthwhile changes such as the family allowance supplement. Honourable members will be aware that for many years we have had in place the family income supplement. That has now been replaced by the family allowance supplement, better known as the FAS. The objective of this new supplement will be to increase the benefits for low income families. All families with incomes of less than $300 a week will be entitled to receive the FAS. The effect will be that children under the age of 13, for example, will have their allowances increased from $17 to $22 a week. Children between the ages of 13 and 15 will receive $28 a week-increased from $17-and dependent children over 16 not receiving an educational allowance will receive the same rate, $17 a week. The problems, however, of maintaining children have not been adequately addressed. The Australian Institute of Family Studies has estimated the cost to be about $36 a week for a five-year-old and as high as $89 a week for a teenager as of March 1987. Assuming that those figures are correct-they have certainly been produced by an organisation which is respected on both sides of the House-one would have to say that the current increases in the FAS are nothing to get carried away about. But under difficult circumstances, such as those we are facing, any improvement must be supported. The wider issue which must be examined by the House in the context of this legislation is precisely what we are trying to achieve. What should the objectives of family income support be? The Social Security Review issues paper No. 1, entitled `Income Support for Families with Children' made four observations which are worth noting. It said that the objectives of family income support should be, firstly, horizontal equity to provide a fair share for all families; secondly, vertical equity to provide adequate support to low income families; thirdly, intra-family equity to provide resources to the parent primarily responsible for the children's care; and fourthly, incentives to provide family assistance which does not discourage parents from work force participation and income earning. Most people would support those four principles or objectives of family income support policy. It is in that context, therefore, that we must examine the proposals contained in this legislation and, as I said, in the associated legislation introduced a few months ago. The effects of these two Bills will be to change profoundly not only the social but also the economic impact which low income Australian families can make upon our society. The point is not made often enough that future generations-nay, the very survival of this nation-will always depend on our capacity to create, to build and to maintain our family structure. It is a matter of grave sadness that in the last decade or so we have seen a steady but determined breakdown of the structure of family life in our society. We have seen a significant increase in the divorce rate. One of the reasons people get divorced is economic pressure. They simply cannot cope. Others get divorced because they probably expected more out of marriage than the institution is able to offer. The sad reflection of all this, irrespective of people's reasons for divorce, is that it leaves hundreds of thousands of children often in a state of poverty or near poverty. This Parliament must relate to the problems which have been created in debating this legislation today. Whilst we have always had the tendency to try to solve the problems, I wonder to what extent we are prepared to examine their creation. Surely if we are to have a long term approach to the solutions we must also examine the causes in detail. The causes of family breakdown today and the causes of growing proverty, especially over the last five years of the Hawke Labor Government, should be a matter of the gravest concern to every Government member, coming as they do from a party which claims that compassion and concern are the hallmarks of its social policy. Yet the sad facts are that more people and, in particular, more children are living in poverty today than ever before in Australia's history. Some 25 per cent of the children of pensioners and social welfare beneficiaries are living in poverty. As we were told by the Minister for Social Security (Mr Howe) when he introduced this legislation, as we were told by the Treasurer (Mr Keating) last May when he introduced the May economic statement and as we were told by the Prime Minister (Mr Hawke) during the election campaign, after 1990 no children in Australia will be living in poverty. I found it more than amusing to note that only last Friday in Sydney's western suburbs, when the Prime Minister went there to release his new policy to the people of that area-many of whom are living in an environment of poverty-he said that it is not now a case of no children in 1990 living in poverty but that no children need live in poverty. Without arguing the semantics of the case, I would simply say that there is more than a small difference between making an absolute statement during an election campaign that there will be no children living in poverty by 1990 and the present situation where he has now resiled in the face of reality and said that, as he sees it, no children will need to live in poverty. It is also interesting that the Minister for Immigration, Local Government and Ethnic Affairs (Mr Young), during the election campaign, some days after this grand statement by the Prime Minister, was required to back off. He realised, as did everybody else, that the realities of life are such that no government, irrespective of its commitment, can ever guarantee that no children will be living in poverty by 1990. Nevertheless that commitment was made by the Prime Minister on behalf of his Government, and the Opposition will make sure that he lives up to it. The sad fact in relation to the family assistance package in this legislation is that, despite the obvious improvement in the level of funding, some half a million children will remain in poverty after the Federal Government's family assistance package comes into effect. That conclusion is the result of research carried out by Mr Peter White and Dr Peter Saunders at the University of New South Wales. Honourable members who wish to read this research in detail will find it in the September issue of Australian Society. The report said: . . . the attempt to eradicate poverty was significant, ``even if it only succeeds in making the financial circumstances of the worst-off groups in society slightly less indecent than they currently are''. The Opposition supports that proposition. Nevertheless, the report also said: . . . between 135,000 and 180,000 children dependent on social security would be lifted above the poverty line because of the package, but that 450,000 to 500,000 would remain in poverty. In this House I have emphasised the fact that with the introduction of these arrangements the Government has once again ignored the significant number of poverty traps which have been created and the disincentives to work. May I again remind the House of the fourth point emphasised in the Review of Social Security; namely, that incentives must be there and that family assistance should not discourage parents' work force participation and income earning. Members of this Government and all people need to understand that, although the social welfare system may keep people alive in poverty, it is almost impossible for the system as it is currently constituted to raise those people out of poverty to the extent that they can have pride in self-achievement and be able to join the work force. One of the problems that we face with this particular package is that in so many respects it flies in the face of the fundamental fact that the objective of policy is not just to keep people alive, important though that is; the objective of a social welfare policy must always be to enable individuals and families to achieve an economic environment where they can do their best to look after themselves. That, regrettably, is not what has been achieved. For example, part of this legislation provides for a rental assistance package, which again is part of the family support provisions. The Bill provides for rental assistance of up to $15 per week to be extended to low income working families. Again, I suppose $15 is better than nothing. But let us look at the impact of the policies of this Government over the last four to five years on housing in Australia. We have a lower level of commencements now than we have had since the year 1982-83-in the midst of the greatest drought that has faced this nation since the 1940s. These are the problems the poor are facing. It is extremely difficult for a poor person today living in Sydney or Melbourne to meet the requirements for loans and rents in those cities. In June 1979, for example, median housing prices in Sydney were $51,900. They have doubled and risen substantially since then in every capital city of Australia. But incomes for people in those disadvantaged categories have not gone up to the same extent. We also find that there is now a crisis in the availability of public housing. Why is there this crisis? It is because the Federal Government's investment in housing has actually fallen over the last financial year-at the very time when hundreds of thousands of young married couples in particular who are living mainly in our capital cities are desperate to find adequate accommodation for their children. Last Friday I visited the crisis centre in Sydney of the St Vincent de Paul Society. I met young families with two and three children. Some of these children are farmed out to relatives-to grandparents and to brothers and sisters. The husbands in many cases have had difficulty finding employment; they have come from country areas. They have applied time after time to the State Government for crisis accommodation, and they have been rejected. They are given support for up to three months in institutions such as the St Vincent de Paul Society which, incidentally, is getting no Federal support whatsoever to provide crisis accommodation for families. Yet we hear so much from the Australian Labor Party about the need for crisis accommodation for single women, for people coming from broken marriages and for children-all of which is important; I do not dispute that. But fundamental to the philosophical problem which the Government claims to be addressing with this legislation is the fact that what the Government is doing to hold family units together is simply not enough. It is not good enough simply to look to the effect and to try band-aid policies while ignoring year after year the causes of the problems. In so many cases the problem is that poor Australian families simply do not have the wherewithal to make a reasonable go of it and to maintain even a standard of living which is acceptable as the lowest common denominator for our society. Yet we have a Prime Minister who does his best to hobnob with the rich and powerful of our land while at the very same time over 700,000 Australians are living below the poverty line. So much for this Government of compassion and concern. So much for the Government that claims that the basis of its philosophy is to look after those most in need. We saw another example of this attitude when the Treasurer talked to the Fabian Society in Melbourne. Some newspapers made the point that Labor Party members now wear black ties-but what has happened to the culture of the Labor Party? What has happened to its genuine concern for the ordinary people? It is now the task of the Liberal Party of Australia once again to go back to the fundamental ethic of the Menzies years when we were the party that represented all Australians, irrespective of where they were or what their condition in life. I remind Government members that if they examine the income tax legislation during the 1950s, 1960s and 1970s they will see that the mechanisms built into the income tax arrangements to support families by giving a greater degree of horizontal equity have now been cast aside, ripped out, by a socialist government that claims to be concerned with the ordinary people and claims to be interested in the affairs of Australian families. The issues before us are of profound importance. As I said earlier, these issues will determine not only the quality of Australian life but also the very existence of this nation in the future. If we cannot look after our families and encourage family formation in the face of a declining birth rate there will simply be too few to pay the taxes to maintain the benefits, support facilities and so forth for the older generations of Australians. There are many aspects of this legislation with which we concur. For example, there is the proposal to establish a double orphans' pension to assist pensioners whose only surviving parent may be indefinitely residing in a nursing home or similar institution. We support the proposal for unemployment and sickness benefit so that there will be an equal rate for those who are unemployed and those who are sick. The concept of a new rate for an ill spouse, especially in the case of broken families or where the wife is living separately from the husband, is of course a sensible approach. People in those circumstances should get equal benefits. I now go on to other issues such as the assets test on unemployment and sickness benefits. I notice that there is no proposal for tapering or hardship provisions. Perhaps the Government could look at that in detail because there are so many cases at the margin where people cannot support themselves even on the basis of what resources they may already have. While the family home is excluded from this very rigorous test as it applies to unemployment and sickness benefits, where there is a need to introduce provisions such as this, people who are precluded should be able to `borrow' pensions from the Department of Social Security on the understanding that the amount will be repaid when they go back into the work force. I want to widen the scope of this proposal to some extent. In the legislation introduced before the last election, and again in this Bill, we have the question of the approach to widows, in particular whether B class widows should be required to register for unemployment and thus be seen as an unemployment statistic rather than as the beneficiary of a B class widows' pension, as has been the position in the past. Of course, the Government's objective in this was to reduce overall costs. As I have said, under the difficult circumstances such as we face, that is a principle which naturally the Opposition supports. But at the same time there is a need for a little more compassion in the way in which these proposals are applied. For example, there is not the slightest doubt that people over the age of 45 have significantly less opportunity of finding gainful employment than people who are younger. It is equally a fact that many people who are beneficiaries of what was the B class widows' pension are precisely in this age group. What is worse, many of those women grew up at a time when they were not expected to be trained; they were not expected to go out into the work force. They were expected to become mothers and to look after their children. Whether that attitude is acceptable to the people in the Australian Labor Party is entirely another issue. But that is a fact of history. That is the environment in which those people grew up. The question has to be asked: to what extent under current circumstances is it fair or reasonable to force these people back into the work force under current circumstances which are so difficult? For example, 21 per cent of people in the age group 45 to 54 years are out of employment for over 36 months. In the age group 55 to 59 years it grows to 24.8 per cent. In the age group 60 to 64 years 28.1 per cent of people are out of employment for a significant period. All I am suggesting to the Government is that it should consider whether it is possible to apply a test which will take those factors into account. For example, I put it to the House that to require widows and people who previously were beneficiaries under this arrangement to present themselves every fortnight to the local Commonwealth Employment Service office, to the local Department of Social Security office, and to go through the work test provisions when they may well live in areas where there is simply no prospect of employment, is simply demeaning. It is something that needs to be looked at very carefully indeed. There are other worthwhile changes in the legislation such as the young homeless allowance, and the job search allowance which will remove the capacity of school leavers to claim the unemployment benefit. But, again, there may well be an argument that poor families will have great difficulties in the three-month period for which unemployment benefit cannot be obtained after their children leave school. In the present Act and the regulations pertaining to it officers of the Department of Social Security had the opportunity to apply their judgment as to whether the personal circumstances of a beneficiary required the absolute interpretation of the Act or whether specific requirements should be taken into account. The Opposition finds it regrettable that in a whole range of areas this will no longer be the situation. There is also the question of pension deprivation relating to a recent decision of the Federal Court of Australia. It is now expected that certain loopholes of some significance will be closed. I now turn to the question of the hardship provisions which I referred to briefly earlier. I would like to point out to the House that the Opposition will be moving an amendment to the second reading motion to the effect 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 is of the opinion that the Government's imposition of 2.5% deemed income on disregarded property in all cases under the hardship provisions of the assets test should not be proceeded with, and that the discretion of Departmental officers to apply this provision under the regulations should be maintained to prevent unfair and discriminatory treatment of pensioners, especially farmers'. Mr Tim Fischer —I will be happy to second that. Mr CONNOLLY —I appreciate that. The hardship provisions in this legislation are very onerous indeed. Under the previous arrangements the regulations stated that, in cases where a pensioner had property such as a farm from which he was not obtaining sufficient income not to disqualify for the pension, officers of the Department could classify that person as being not required to pay a deemed income on that land of some 2.5 per cent. There were instances in which a person was unable to rearrange his or her personal financial affairs or could not reasonably be expected to rearrange them because of particular circumstances. Consequently, the special provisions were included so that people were not placed in severe financial hardship due to the normal application of the assets test. As the new arrangements will apply, the option is no longer in the hands of officers of the Department. The 2.5 per cent deeming provision is now to be built into the legislation. It will be applied in all cases irrespective of whether there is a case of hardship or not. What is worse, because of the intermeshing of the income test with the assets test, there may well be cases where existing pensioners will lose their pension entirely because of the effect of the implementation of this 2.5 per cent deeming provision. It is a matter of the gravest concern to many people, and one which the Government is earnestly asked by the Opposition to review. The explanatory memorandum attached to this Bill emphasises the fact that the overall saving from this particular provision will be minuscule. Surely, if the issue is as important as we believe it is, it is very difficult to understand why it is necessary to put in place a provision which will gain so little in revenue but which could have such a major impact on people under those circumstances. In fact the estimated savings in 1987-88 will be a miserable $1.2m and in 1988-89 will be $2.3m. I warn the Government that across Australia, especially in country areas, this will be an issue which will inflame the passions of many because they will believe, and rightly so, that they are being unfairly discriminated against for no worthwhile financial benefit to the Government. Mr Tim Fischer —It destroys the Williamson case. Mr CONNOLLY —As my colleague rightly points out, it destroys the Williamson case. I now refer to the question of investment income. There have been some changes which were necessary, although again one must make the point that pensioners, especially in Victoria, may feel that they have been somewhat discriminated against. The Opposition supports this amendment principally because the time has definitely come when it is necessary for friendly societies to be treated on the same basis as life insurance and superannuation companies in terms of their capacity to offer investments to pensioners. Under the existing arrangements, while the bonuses declared were meant to be built into the total capital amount and taken benefit of only at the time the final payment was made, the reality has been that many friendly societies have allowed the bonuses to be paid on an annual basis. In fact, therefore, those payments have been a form of supplementary income which has not been taken into account by the Department in the income test, with the result that people who put their funds into friendly societies have had a clear advantage over people who have taken our insurance policies, invested in a superannuation scheme and so on. Clearly, therefore, there is a need to have commonality. It is worth noting that the estimated savings from this proposal in a full financial year will be some $9.02m. Another change of some relevance which is worth noting concerns pensioner earnings credit. Under this arrangement, pensioners will be allowed to have a gross income of up to $40 a week, if they are single, and up to $70 a week in the case of a couple. It has been best described by the Minister and others as the Santa Claus arrangement by which a person, theoretically, can work for a few weeks at Christmas, earn a reasonable income and not lose benefits. However, I am assured by the Australian Council of Social Service that there is a real problem in this proposal. That relates to the fact that it falls unfairly on people who may seek to obtain a relatively small income throughout the year on a part time employment basis, as distinct from a person who gains a relatively significant income for only a few short weeks. Therefore, whereas a person who goes fruit picking will be advantaged under this arrangement, it will not be so for somebody living in a metropolitan area who may have a part time job for most of the year. I draw that matter to the Minister's attention. It may well be something that he should consider amending in the future. I emphasise that the family package as a concept is valid and is supported by the Opposition. However, we continue to be very critical of the Government for the fact that in a whole range of its policy approaches it is still not putting in place sufficient encouragement for the formation and development of families in Australian society. I cannot emphasise enough the great importance of family formation in our community. It is the only way that Australia will be able to survive in the future. I move: 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 is of the opinion that the Government's imposition of 2.5% deemed income on disregarded property in all cases under the hardship provisions of the assets test should not be proceeded with, and that the discretion of Departmental officers to apply this provision under the regulations should be maintained to prevent unfair and discriminatory treatment of pensioners, especially farmers'. Mr DEPUTY SPEAKER(Mr Mildren) —Is the amendment seconded? Mr Tim Fischer —I second the amendment and reserve my right to speak. Ms McHUGH(Phillip)(11.57) —We have just heard a wonderful speech from the Opposition! It is a shame that today's proceedings are not being broadcast so that people in the community could hear the fine words, the rhetoric and the absolute irrelevance of the Opposition's comments. The Opposition is so out of touch with reality that its talk of the glories of the Menzies years must go down well out there. I am glad that at least one member of the public who is in the gallery today, that is, my father, a pensioner, would very much like to say what it was like to be a wage earner in the Menzies years and how society was or was not equal for all people under the glorious Menzies philosophy. That is all the Opposition can offer at the moment, yet it scoffs at our commitment. Let me tell those opposite that we dare to make a commitment and that we will fulfil our commitments. I remind the Opposition of its record. The honourable member for Bradfield (Mr Connolly) said constantly that the real need was for families. During the coalition years payments for children fell by 35 per cent in real terms. The number of children in pensioner and beneficiary families has more than doubled-from 330,000 to 790,000. That is great for commitment, is it not? That is great for reality and for what happens when the Opposition is in government. The Opposition's policy for families at the last election was to increase the dependent spouse rebate. The coalition always thinks in terms of rebates, of tax. It forgets the number of people who are not even in a position to pay tax, who do not have sufficient income to get into a tax bracket. However, the coalition intended to increase the dependent spouse rebate from $830 to $900 a year for families without children and reduce it from $1,030 to $1,000 a year for families with children. In other words, its proposal would have financed gains to those without children from losses to families with the additional costs of children. That is the coalition's record in terms of promises. The amendments in the Social Security and Veterans' Entitlements Amendment Bill (No. 2) to the Social Security Act and the Veterans' Entitlements Act are very comprehensive and, I am glad to say, have in large part received the support of the Opposition. These amendments will benefit a great many people. Without doubt, the most significant is the measure to introduce a $500m families package, which means real increases in the standard of living of more than one million children. There is the action, the commitment and the implementation for the children of Australia. Like many other speakers on our side, I will spend some time emphasising the family allowance supplement because it is absolutely central to the Government's determination to get all Australian children out of poverty. It is a necessary beginning to our implementation of a social justice strategy for all Australians. Other speakers will give details of the benefits, but I bring a challenge to the Opposition. The fact is that the measures to be implemented in the family package will bring such improvement-in terms of untaxed cash-in the financial situation of low income earners, those who need it most, that perhaps the only real difficulty we face is making sure that those eligible know about it and apply for the benefits to which they are now entitled. The family allowance supplement replaces the former family income supplement (FIS) which was often not taken up by those working families which were, in fact, eligible. This supplement is a much better payment because it pays more and it lets parents earn more and still qualify for child payments. Those on benefits already will get their increases automatically. The Department of Social Security is already aware of those on benefits. Child payments for people on social security will go up automatically in December. They do not have to apply for their increases. But those who will qualify for the family allowance supplement do have to apply. There was a problem with the former FIS in that it was not sufficiently taken up by those who were eligible. It is up to all of us, to Government and Opposition members-here is my challenge to the Opposition-to spread the good word of this legislation. We in Government certainly will. We plan, as backbenchers, to get the message through every sector of the community-trade unions, employers, community groups, ethnic groups and the Aboriginal community. I invite Opposition members too to do just that. So often in the past the public has been misled by some of the Opposition's scare tactics about our legislation. Some pensioners must be astonished to find that they still have gold fillings in their teeth. If the Opposition really cares, if it holds dear to the ideals of the wonderful Menzies years, why does it not go out and sell the family package just as we will sell it? Why is this package so important? Why has the Government taken this historic step? It is not for some political advantage. That is why I invite Opposition members to join us in letting people know the entitlements for which they are eligible. This Government has undertaken research to find out where the need is. The honourable member opposite talked about the need to understand and quoted figures. We in Government have undertaken the research. It was we who instituted the Review of Social Security, which is the first review of the social security system for 30 or 40 years. We found that low income families with children are most in need. I will quote some other figures. The National Institute of Economic and Industry Research has estimated the extent of poverty in both 1981-82 and 1985-86. The Institute's figures show that while the prevalence of poverty among single parent income units appears to have declined marginally over the four-year period, it is still very high and that poverty among sole parents is much higher than among other income units. The figures also show that the prevalence of poverty among married couple income units with dependants has actually increased over the four-year period for families of all sizes. A particularly striking feature of the figures is that this prevalence increases significantly as the number of dependants in the income unit increases. Thus in 1985-86 it was only just over 8 per cent, both before and after housing costs, for income units with one dependant but rose to 40.7 and 31 per cent on a before and after housing costs basis respectively for units with four or more dependants. That is why we, understanding the need, have made the commitment and are targeting, with the amendments to the social security legislation, those most in need-the people we understand and the people who are in our electorates. It is all part of our social justice strategy. Social justice crosses areas such as housing, education, welfare and health. Every possible facet of life is covered by social justice. Part of our social justice strategy emphasises the need for Labor in government to develop a more strategic approach to the implementation of its policies and programs and to the process of government decision-making in order to achieve greater social justice. Some of our objectives are to create greater fairness in the access to economic resources and power; to protect, extend and ensure the effective exercise of equal legal, industrial and political rights; to ensure greater equality of access to essential goods and services-it does not sound like the Menzies years-and to ensure expanded opportunities for genuine participation in decisions which govern their lives. Typically economic disadvantage is linked with disadvantages in many other areas that out society considers essential for a satisfactory quality of life. That is why economic disadvantage is one of the greatest injustices in our society. This legislation targets those with the greatest economic disadvantage and those are families with children. The first injustice is the lack of means. The Opposition's attempt to improve the lot of the community seems always to be related to tax concessions, to rebates, for those who already have an income at least able to be taxed. So much of this legislation, particularly the family allowance supplement which goes to working families, is for those whose income is too low even to attract tax at all. Many of my colleagues will discuss many other aspects of this legislation which is before us today but there are a couple of points I want to mention. First I refer to the child disability allowance. It will be brought in at a uniform rate of $112 a month free of income test for all disabled children covered under the current categories. Another point I am sure my colleagues will speak more about is the pensioners' earnings credit scheme which will allow eligible pensioners to earn up to $1,000 each from casual jobs without losing their fringe benefits or having their pensions reduced. This new scheme will mean a fair go for pensioners who do not have regular part time work. Another area I would like to touch on is the carer's pension. As the House knows, the carer's pension was introduced by this Government in 1985. With this legislation the eligibility will be extended although the requirements will be tightened. It will extend eligibility beyond the closest relatives. One aspect of modern living which has highlighted the need for this particular carer's pension is that of people with acquired immune deficiency syndrome (AIDS). So often people with AIDS are unable to be cared for at home by a relative close enough to attract a carer's pension. Under this more generous eligibility, people caring for people with AIDS will be able to receive a carer's pension. It is just one of the many improvements to the quality of life of Australians dependent on government help which is in this legislation. Mr TIM FISCHER(Farrer)(12.09) —I second the amendment moved so ably by my colleague the honourable member for Bradfield (Mr Connolly). In response to the comments made by the honourable member for Phillip (Ms McHugh), I will deal with the Menzies years for a moment. I remind the House and the nation that it was in the Menzies years that there was a rising standard of living. It was in the Menzies years that there was full employment and economic growth. We did not have falling standards of living as we have had in the last 4 1/2 years under this Hawke Labor Government. We did not have record levels of unemployment. I know there are international economic reasons associated with some aspects of this decline but the clear message is that if our house had been in order the collapse on the stock exchanges, the economic crisis of most recent times, would not have impacted so heavily on Australia or on the standard of living of Australians, including veterans, ex-service personnel and war widows. If the honourable member for Phillip dares to criticise the Menzies era, if she brings this aspect into the debate, let her be balanced in her approach-she normally is a thoughtful contributor to debates-let her be reminded of the high standard of living that existed and was recorded over many of the Menzies years. In addressing the Social Security and Veterans' Entitlements Amendment Bill (No. 2) I point out to the honourable member for Phillip and others that there is growing anger among veterans, among ex-service personnel generally, among war widows, over the range of cutbacks and changes which have been imposed by this Hawke Labor Government contrary to the original commitment given by none other than Ben Chifley when he told the Parliament that the right thing should be done by the veterans. Here we are looking at further budgetary measures. I remind the House that it was in May 1985 under the then Hawke Labor Government mini-Budget that travel allowances were reduced by half, that subsistence allowances were sharply reduced, that there was a $300 limit imposed on the dental scheme for many categories of veterans and eligibility for certain categories of service pensioners to obtain assistance under the repatriation pharmaceutical benefits scheme was eliminated entirely. On top of that we have had the impact of the assets test. Thousands of veterans have had there service pensions eliminated or reduced. The Veterans' Entitlements Act was introduced which sharply tightened up the criteria associated with the totally and permanently incapacitated (TPI) pension. I will return to the TPI in more detail in a moment. To be fair, some improvements have been introduced under the Veterans' Entitlements Act but there have been a series of cutbacks and changes culminating in the Federal Budget of 1986 which saw the access to the repatriation pharmaceutical benefits scheme by war widows eliminated. The social security component of the war widows' pension package associated with both social security and veterans affairs was frozen at $60.05 per week. Let us be fair when looking at this whole area and let us consider both the good and the bad which has been brought forward by this Government including the 2 per cent permanent cutback on the defence force retirement benefits scheme recipients which I know rankles very strongly in the electorate of Phillip and many other electorates including the electorate of Fairfax. I know the honourable member for Fairfax (Mr Adermann) will expand on aspects particularly relating to the TPI later in the debate. In addressing this measure which embraces the provisions relating to verterans affairs I want to draw the attention of the House to the fact that there has been both good and bad brought forward by this Government. I warn the House and the new Minister for Veterans' Affairs (Mr Humphreys) that there is a great deal of concern across the veteran community. I do not seek to add to that concern unduly. I am very careful not to do that given the age of many of the veterans and how easily they become very upset. I am pleased that this measure, as its centre-piece, provides for the continuation of the payment of the TPI beyond the age of 65 years. That provision is welcomed. It is supported on a bipartisan basis. In looking at the detailed provisions relating to this aspect of the legislation I draw the Minister's attention to a change in wording which exists between clause 65 of the Social Security and Veterans' Entitlements Amendment Bill (No. 2) and section 24 of the parent Veterans' Entitlements Act which has caused some last minute concern in the veteran community. I know that the Minister has been apprised of this concern. I invite the Minister in his summing up-or to arrange for it to happen in the Senate-to provide some assurance in the Hansard record that this alteration of wording between the amending Bill and the principal Act is not some surreptitious move-and I do not believe it is-to wind back further on the TPI pensioner. The particular words in question relate to the top of page 29 of the Act. Section 24 says, on lines 3, 4 and 5: . . . to render the veteran incapable of undertaking remunerative work for periods aggregating more than 8 hours per week; and . . . On page 45, line 9, of the amending Bill, proposed new section 24a (c) states: In the case of a veteran to whom section 24 applies-the veteran is undertaking or is capable of undertaking remunerative work for periods aggregating more than 8 hours per week.''. On the one hand in the parent Act we have the word `incapable', and on the other hand in the amending Bill we have the word `capable'. I believe that change is due entirely to the thrust of the introductory phrases associated with the drafting of the Bill, and it was necessary to make that change. But in the scheme of things the Returned Services League and many other organisations have expressed concern about that, and also about why there was a need to introduce the application date as the relevant date in the assessment of the TPI. I understand that, in a sense, the reason is to eliminate that portion of the Federal Court ruling which determines that there should be a continuing test for the TPI pension. If the Minister could clarify both those aspects, I think that would be welcomed by the veterans' community. On an overall basis the TPI pension represents compensation for war effort on behalf of this country. It is something that has been understood to have been awarded for life, unless there is a fraudulent or other aspect involved, and this is what this measure provides for and this is why I am happy to say that the Liberal and National parties strongly support these provisions to put to rest the concern that existed with the Australian Federation of Totally and Permanently Incapacitated Ex-Servicemen and Women and so many other organisations in the veterans field about where they stood in terms of the TPI pension. I add that the TPI ground rules have been tightened up dramatically by the Veterans' Entitlements Act. There are other concerns, such as the guide to assessment of rates and pensions. All of these are being addressed by the independent monitoring committee, which is still in session, and we look to that committee to produce a worthwhile report which will address some of the very real concerns of veterans on these aspects. There are three areas of omission from this measure which I should address. Firstly, the Budget decision to impose a statutory patient contribution on nursing home veteran patients is a bitter pill for many veterans, and some 750 will be affected by this measure. It is not addressed in this legislation. The honourable member for Dundas (Mr Ruddock), the honourable member for Higgins (Mr Shipton), the honourable member for Richmond (Mr Blunt) and others have large nursing home facilities in their electorates and have highlighted the fact that these veterans are now being hit with this statutory patient contribution ranging to over 80 per cent of their pension income. In effect, this amount is being confiscated for their well-being in those facilities. As I said, it is not addressed in this legislation. I wish to advise the House, the veterans and the nation that it is going to be introduced administratively. It is a matter of concern and it represents a further cutback on the veterans, and that is why I have raised it in the context of this legislation. In addition, I should mention to the House that the defence service home loans situation is another key omission. I know that in addressing this measure, Mr Deputy Speaker, you would wish me to stick to what is in the legislation, but I wish to make passing reference to these omissions because I want to highlight to the Minister that it was this Minister, in one of his most honest moments, who told the House and the nation that he would have, by 1 January 1988, an announcement of new provisions relating to the defence service home loans scheme. This Minister and the Minister for Defence Science and Personnel (Mrs Kelly) said to the nation at large that they were pushing on with a revision of the Budget announcement to introduce a non-taxable, non-repayable grant as an alternative to the defence service home loans scheme. Yet here, with just nine full sitting days to go for the lower House this year, we have not yet had such a statement in this historic chamber. The Minister might like to assure us again that he will produce such a statement between now and the December recess of the Parliament. Because if he does not there is going to be continuing concern amongst veterans, amongst ex-service personnel, and amongst serving personnel, whose morale has been shattered over recent years as further concern has been created for them and their families by the continuing saga over defence service home loans. God alone knows it was in May 1985 that the Treasurer (Mr Keating) announced the transfer of the Defence Service Home Loans Corporation to the private sector. But here we are, 2 1/2 years later, after a further Budget announcement, and the thing is still a great mess and causing resignations amongst our Air Force, Navy and Army personnel. I highlight that omission but equally, to be fair, I welcome the inclusion, as recommended, of provisions for medical treatment for World War II service women as this represents a great victory for some very valiant women, including Trish Kennedy and others, in veterans' organisations. But the 150 women-a minuscule number-who served in Korea, Malaya and Vietnam will not be picked up by this one long overdue and welcome gesture by the Government. To put it in perspective, it is true that those service women who served in Korea, Malaya and Vietnam were on a fundamentally better basis than their predecessors from World War II. They had better conditions, allowances and schemes applying to them. Nevertheless, in going through this very important exercise of finally picking up these World War II service women who have been discriminated against, surely this Parliament should go a further step and comprehensively embrace those still outstanding-the women who served in Korea, Malaya and Vietnam. I put that to the Minister so he can provide further clarification to the House when he speaks to this measure. There are many other budgetary measures implemented by the Social Security and Veterans' Entitlements Amendment Bill (No. 2). It is a matter of continuing concern that veterans' affairs on this occasion have been lumped in, once again, with social security concerns. The fear is that ultimately the Department of Veterans' Affairs and the Department of Social Security will be merged, and that is a very genuine fear and one which should not be allowed to come true during this decade and beyond, given the large numbers of veterans reaching critical ages and who need the support of a departmental structure. One of the measures includes alterations to the deferred interest investment schemes to provide new provisions from 1 January 1988. That has particular reference to Victoria and Queensland, where there are friendly societies and other deferred interest investment bodies, but I am satisfied that they do provide a more consistent approach than that which has existed. The assets test has been covered in part by my colleague the honourable member for Bradfield and will be addressed in more detail by the honourable member for Fairfax. The remote area allowance has been altered, but not to pick up Norfolk Island. It does pick up Christmas Island and the Cocos (Keeling) Islands. As such, that is in accord with the general pattern of provisions in the relevant area of social security. Nevertheless, it is an area of some concern to veterans' organisations. In addition, there are provisions for the recovery of overpayment of pensions, which I think is a very satisfactory tightening up of the situation of payments associated with the death of a veteran or pensioner. Once again, these are in part mirror provisions of the social security legislation. All in all this veterans' affairs section of the Social Security and Veterans' Entitlements Amendment Bill implements the majority of decisions flowing from this year's Budget. By and large they are welcomed. The centrepiece, once and for all confirming the payment of the TPI pension to veterans beyond the age of 65, is also welcomed. But I sound this note of concern to the Minister, to the Government, to the Parliament and to the nation: we have an obligation to look after those who served their country in time of war, and that just because more than four decades have passed since World War II and well over a decade has passed since the most recent conflict, Vietnam, and because the veterans numbers are dwindling, especially World War I veterans, that does not absolve this Parliament of its obligation to take proper care of the veterans, of the ex-service personnel generally and of our war widows. The Minister ought to be aware, as I am sure he is, of the very real concern that exists in many veterans organisations over the general thrust and direction of change-some confusing changes and some very complex changes-that has taken place in recent years. I appeal to the Minister to look very long and hard particularly at the defence service home loans scheme to ensure that before Christmas we get a comprehensive, definitive statement covering that scheme. Finally I should also mention regarding the repatriation area that during the most recent recess week there was a carefully stage-managed leak of the Hogg report. The previous week I put out a release calling for its publication. It has now been published not in the Parliament but by the media. The Hogg report is a report on the report of the Royal Commission on the Use and Effects of Chemical Agents on Australian Personnel in Vietnam. There is a report on a report but that was necessary given all the circumstances. However, it is now well over two years since the Royal Commission report was presented to the Parliament. We are again looking for an action program and an attitude declaration by this Federal Government, preferably before Christmas, as a consequence of the release of the Hogg report. I realise it is a very difficult area and, to be fair, that many aspects proved too difficult for the previous Government and are proving very difficult for this Government. Equally, in accordance with our obligation to look after the veteran, the Royal Commission on the Use and Effects of Chemical Agents on Australian Personnel in Vietnam and the Hogg inquiry have now been around for some time. The whole of the veterans' community looks to the new Minister for Veterans' Affairs and the Government to make a definitive statement to the Parliament before much longer so that we will know exactly what is the attitude of the Government and what will be provided for the veteran arising out of the agent orange issue. I support the amendment moved by the honourable member for Bradfield to the Social Security and Veterans' Entitlements Amendment Bill (No. 2). Mr DEPUTY SPEAKER(Hon. J. D. M. Dobie) —I call the honourable member for Moore. Mr BLANCHARD(Moore)(12.27) —Mr Deputy Speaker, I preface my remarks by congratulating you on your elevation to the rank of Deputy Speaker and Deputy Chairman of Committees. The purpose of this debate is to look at the Social Security and Veterans' Entitlements Amendment Bill (No. 2) and it gives me very great pleasure to support this Bill. It is quite clear from the comments of the honourable member for Bradfield (Mr Connolly) and the honourable member for Farrer (Mr Tim Fischer) that generally speaking the Opposition supports and welcomes the Bill. I too welcome that support. Of course there are many good and positive reasons why the Opposition should support it. I am sure that it would have found it very difficult to oppose it. The honourable member for Bradfield raised the issue of those widows whose children have turned 16 years of age who, under the legislation, would lose their entitlement to the widows' pension. It is important for the House to pay some attention to that issue. The honourable member accused the Government of forcing these women back into the work force. Certainly it is the policy of this Government to encourage women to enter the work force and I emphasise the words `encourage women to enter the work force'. However, they are not being forced into the work force. It is a very sensitive area and I was conscious of the sensitivity of this area to the extent that some six or seven weeks ago I arranged a seminar for women in my electorate who would be likely to be affected by the proposed legislation. I asked the Department of Social Security (DSS) to send one or two officers to the seminar so that we could deal with the understandable concern of these women. The concerns were there; there is no doubt about that. I feel that the concerns were based on a misunderstanding of the issue that these women would be forced into the work force. However, it is quite clear that the DSS officers had been told to treat sympathetically those widows who are in their early forties and lacking any training or experience to fit them for entering the work force. It is clear that these women will be allowed to receive a widows' pension. Several of the women said in the seminars that they would like to return to the work force but that they needed training or re-training and this is what the issue is all about. We are trying to encourage those women who need to enter the work force to do so. The Government's proposals in respect of training certainly cover this area. I refer to my parliamentary colleague the honourable member for Phillip (Ms McHugh) who made the point that this package of measures is very much part of the social justice strategy of the Government. There is no doubt that it is a step towards achieving a social justice strategy for people in this country. My support for this Bill arises from the fact that it is a serious attempt to tackle the problem of child poverty in Australia. No government and no political party can ignore the fact that child poverty is a problem which, if not tackled now, will lead to even bigger social problems in future years. It will lead to a widening of the gap between the haves and the have nots, greater expenditure on health and increased social security payments. The measures contained in this Bill are being introduced at a time when there is a need for financial restraint. That point must be emphasised because I am sure the Government would have liked to have gone much further than it has at this stage. However, it was constrained by the circumstances about which every honourable member is aware. In that light it is a courageous measure but a very necessary one, as I will attempt to explain to the House. The disadvantaged members of our community are already suffering more than anyone else from our national economic difficulties. In the submission of the Economic Planning Advisory Council to the Government in April 1987 the Australian Council of Social Service (ACOSS) made it clear that it considered increasing financial support for families, especially low income families, a high priority. In that report ACOSS pointed out that over three-quarters of a million Australian children, or one child in every five, were living in poverty. More importantly, the number has doubled over the past decade. Levels of poverty are especially serious among single parent families, large families and families in private rental accommodation. These facts have been known for some time but it is important for an organisation such as ACOSS to emphasise the facts and also to put pressure on the Government to meet the needs of the people that it represents. These groups have been targeted by this Government-I will explain this later-in this Bill. If children are Australia's most valuable resource, to allow so many children to be raised in poverty is to squander that resource. This Bill is an attack on child poverty. The family package is an historic commitment for two reasons. Firstly, it substantially increases the value of child payments available to families on low incomes. Secondly, it promises for the first time to increase child payments in line with pension indexation. The family income supplement is being replaced by the family allowance supplement. By any measurement, the latter is a much better scheme. It pays more money for each child, and it allows parents to earn more money and still qualify for child payment. Let me compare the old system with the new. The family income supplement paid $17 a week to each child and one was unable to get full payment unless one's average weekly income was $257 or less. Under the family allowance supplement, a parent or guardian is paid $22 a week for each child, but the payment for the 13-, 14- and 15-year-olds, the teenagers, is $28 each per week. Families on a gross wage of $300 a week or less can receive full payment if they have one child. The bigger the family, the more money that family can earn and still receive some payment. It must be emphasised-and this is important-that the family allowance supplement is tax free. In other words, it is better than a pay rise. I will take the example of a family on an income of $400 a week with two teenagers, and paying rent. That family will receive $27 a week. Because the payment is tax free, that family allowance is equal to a pay rise of $45 a week. This is a great and necessary social advance. I am sure that honourable members on both sides of the House are very supportive of it. There is another section of the Bill to which I want to refer briefly. This relates to the child disability allowance. As honourable members know, previously the handicapped child allowance was split into two categories-the severely disabled and the marginally disabled. Those two categories will now be dispensed with and there will be a uniform rate which amounts to $112 a month, free of income test, for all disabled children covered under the current categories. As a person who has worked with disabled children and has met many parents of disabled children, I am sure that this will be received very gratefully by all those persons. Time has run out on me, but I wish to re-emphasise that this is a measure which is largely supported by both sides of the House. I strongly support the Bill. Mr TUCKEY(O'Connor)(12.39) —We are dealing with a cognate matter today relating to legislative amendments in two areas-namely, the Social Security and Veterans' Entitlements Amendment Bill (No. 2) and the Health Legislation Amendment Bill (No. 2). Although I wish to make some comments in both areas, I have a shadow ministerial responsibility to the Health Legislation Amendment Bill (No. 2). This legislation brings some welcome changes to the pharmaceutical benefits arrangements that the Government has in certain areas. In fact, it is consequential on other legislation that has come forward because of changes that have been mentioned in other legislation and changes to the status of certain welfare beneficiaries. For a change, here we find that there is some government expenditure involved in terms of the delivery of health care to ordinary Australians and, of course, in particular in this case to disadvantaged Australians. We have been advised by the Minister for Community Services and Health (Dr Blewett) that the total cost of the Health Legislation Amendment Bill (No. 2) would be about $200,000, all of which would go to persons previously categorised as A class widows. As I said, this is something of a difference because in all the legislation with which I have dealt recently in this place, the Government has been pulling back on its expenditure in the area of health delivery. More importantly, the other day we dealt with legislation relating to the Pharmaceutical Benefits Advisory Committee when the Minister pointed out that the Government had managed to achieve savings of $100m. Although the Opposition always applauds a government cutting its expenditure in appropriate areas, we expressed our concern during that debate because we found that the newly structured Pharmaceutical Benefits Advisory Committee would be obliged to take alternatives into account when looking at the benefits that it would list. One of the alternatives listed was surgery. I am not really sure what that means, but apparently it could be considered that, where a certain treatment by drugs was considered too expensive compared with, say, an amputation, one might wonder which course to take. More importantly, in recent times we have seen an attack on the Medicare schedule in a similar way, with items being removed because the computers have identified too much money being spent in a particular area. It is very significant, this being skin cancer week in New South Wales, that the Government has just removed certain items from the medicare schedule which related to the treatment of warts and keratosis. Keratosis is a form of wart which is well known as a precursor to skin cancer. Other warts that have also been removed from that schedule are venereal warts which the Government has more recently declared a notifiable disease. They are the precursor to cancer of the cervix-one of the more serious killers of women. This has been done for cost saving reasons. When we see this more sensible legislation coming forward today, in which the Government has chosen to spend some additional money to rectify problems that have occurred as a result of other decisions it has taken, some of which the Opposition has supported, we might wonder why the Government has chosen to make cutbacks in an area as sensitive as skin cancer for the pure reason of saving money. We might wonder how much the Government will save in the long run when it looks at an issue such as keratosis, which now has to be dealt with in a general practitioner's surgery. I am not for a moment criticising the skills of general practitioners but if a GP decides that he has some doubts about whether the keratosis is a skin cancer and decides to refer that patient to a specialist, the patient must gain the next treatment at his own cost. Of course, that will deter some people from going for further treatment. It is interesting that articles published this week supporting skin cancer week have pointed out-and I have not yet been able to confirm these figures-that 125,000 Australians have skin cancer and do not know it, and that 1,000 a year are dying from it. We presently have great concern about acquired immune deficiency syndrome, but skin cancer is a greater killer than AIDS. It is with us and we are trying to educate people about it, but in the meantime I think it is very poor economy to cut down on treatment in that area, and especially that of specialist diagnosis. In the town of Geraldton in my own electorate, a voluntary survey has been conducted of 5,000 people. Of the first 3,000 who were screened, 300-10 per cent-were identified as having skin cancer or other skin diseases necessitating treatment. Mr DEPUTY SPEAKER(Hon. J. D. M. Dobie) —It now being 12.45 p.m., in accordance with sessional order 101a, the debate is interrupted. The debate will be resumed at a later hour and the honourable member will have leave to continue his speech when the debate is resumed. Sitting suspended from 12.45 to 2 p.m. Mr HAWKE(Wills-Prime Minister) —I inform the House that the Minister for Consumer Affairs, Mr Staples, will be absent from Question Time today and tomorrow. He is attending a conference of consumer affairs Ministers in New Zealand on behalf of the Government. In his absence questions normally addressed to Mr Staples should be addressed to the portfolio Minister, Mr Bowen. Mr SPENDER —My question is addressed to the Prime Minister. The Prime Minister will be aware that his Ambassador to the United Nations has declared that in future his Government will not condemn resort to force and violence by those struggling in South Africa against apartheid. Does this policy apply to force and violence by blacks against blacks? Does it apply to force and violence against so-called soft targets such as children, women and other civilians? Does it apply to murder? Does it apply to the practice of necklacing, when a rubber tyre filled with gasolene is placed around the neck of a bound victim, who is then burnt to death? Mr HAWKE —I say at the outset that the apartheid system in South Africa is the root cause of the violence in South Africa. There is no informed person on the tragic situation in South Africa who disputes that fundamental point. I make it clear that the Australian Government does not condone the use of violence, whether by the South African authorities or by their black opponents. It may be recalled that I made this point on 1 April 1987 in answer to a question without notice concerning the visit of the African National Council (ANC) President, Oliver Tambo, and the statement by Ambassador Woolcott was consistent with my statement. Despite our opposition to the use of violence-an unqualified opposition which embraces all the sorts of situations that have been referred to-we understand that the South African Government's persistent refusal to dismantle apartheid and negotiate fundamental reforms with the majority black community has led to a situation in which black frustration is expressed in increasingly violent ways. I note a statement by the Leader of the Opposition that Ambassador Woolcott's remarks to the United Nations indicated my Government's moral bankruptcy. If there is any organisation in Australia which is morally bankrupt on the issue of South Africa, it is the Liberal Party under the leadership of the honourable member for Bennelong. His statement this morning equates the violence of the oppressed people of South Africa with that of the Irish Republican Army (IRA). He is apparently unable to distinguish between the democratic societies within which the IRA perpetrates its terrible acts and the violent, racist nature of the apartheid regime which denies elementary rights to its black majority and maintains its supremacy by force. The statement by the Leader of the Opposition hypocritically reiterates the coalition's purported abhorrence of apartheid and calls for its dismantling. However, whenever this Government has taken action aimed at promoting the dismantling of apartheid by adopting sanctions or by urging Australian sports men and women to stay away from South Africa, the Leader of the Opposition has found some pretext to oppose us. The Leader of the Opposition is in favour of anything against apartheid, except action. What has he ever done other than wring his hands about it in a mealy-mouthed and hypocritical manner? As I have had reason to say before, the hypocritical, mealy-mouthed attitude of the Leader of the Opposition stands in stark contrast to the high moral principles and position of positive action embraced by his predecessor, Mr Fraser. As I had cause to say, by comparison with Mr Fraser the present Leader of the Opposition is a moral pygmy. Let me make it quite clear that this Government, as I have said in this place, is opposed to the use of violence. We abhor violence by whoever it is used. Not only have I said that in this place but also I have said it to Mr Tambo as representative of the ANC. I have said that what this Government is about is to try to remove from South Africa the cause of violence, and that is apartheid. That is the fundamental reason why there is violence in South Africa. Everything that this Government has been about is to try to bring the parties together, to bring the South African regime to the negotiating table with representatives of the blacks so that the greater tragedy that faces not only South Africa but also the rest of the world will be averted. Let there be no doubt that the apartheid regime in South Africa will go; it will not last. Those who are committed to it will not be able to withstand the tide of history. The only question is: how will that regime go? It can go in one of two ways. It can go as a result of peaceful, meaningful negotiation entered into between the South African Government and the representatives of the non-white population, which will lead to a situation in which the resources of the Europeans-the capital, the investment, the people-will be able to be used and be part of a democratic, non-discriminatory South Africa. Change can come in that way. Alternatively, as Mr Fraser said as a member of the Eminent Persons Group, if it does not come in that way-the way that we want it to come-it will inevitably come by way of violence. Nobody's interests will be served if the change comes in that way. The best interests of the blacks, and certainly the best interests of the whites, will not be served. We on this side of the Parliament will not be dissuaded from doing everything that we possibly can to get to peaceful negotiation and to see the elimination of violence on all sides. That is what we have been about since we have been in office from day one. In pursuing that course, I am pleased to say that we have pursued the course and principles espoused by Mr Malcolm Fraser, the honourable predecessor of the current Leader of the Opposition. As I have said, Malcolm Fraser stands high not merely in physical stature compared to the present Leader of the Opposition. Every time that this Leader of the Opposition opens his mouth on South Africa, he reveals himself by comparison with his predecessor as a total pygmy. Madam SPEAKER —Order! I said to the House yesterday that I expected a better standard of behaviour today. I hope that the House will take note. I am speaking to the House generally. I expect a better standard of behaviour. Honourable members interjecting- Madam SPEAKER —Order! I suggest that the honourable member for Mackellar not do that again. Mr SCIACCA —Has the attention of the Minister for Land Transport and Infrastructure Support been drawn to reports in this morning's Brisbane Press indicating that the so-called low tax National Party State Government intends to impose a 4c to 5c per litre fuel tax on Queensland motorists? Further, is the Minister aware of the feeble and grossly misleading attempt by the Queensland main roads Minister, Mr Hinze, to lay the blame for this National Party initiative at the feet of the Federal Government instead of the National Party's own economic mismanagement? Will the Minister inform the House of the facts relating to the question of general road funding to the States, and in particular to Queensland? Mr DUNCAN —I have seen the report in this morning's Brisbane Press indicating that the Minister for roads, Mr Hinze, that well-known Queenslander, had hinted at the idea of a fuel tax. The context in which it was raised was particularly interesting. He seemed to be hinting that as soon as the Government got rid of Joh in August it would put a fuel tax into its budgetary structure. He went a little further than that and suggested that the reason the Government was going to have a fuel tax was something to do with the way Queensland had been treated by the Federal Government in regard to road funding. Queenslanders have nothing to complain about in terms of the amount of Federal fuel taxes that has been expended on roads in Queensland. I see a couple of Queensland members nodding their heads. Everybody knows that that is the case. For the Queensland Minister to suggest that in any way Queensland is not getting its fair share of road taxes is a complete and utter fabrication of the worst type. If the Queensland National Party Government had spent a fair and appropriate amount on road funding for the past 20-odd years Queensland would have a much better road system than it has now and would not need to receive more than its per capita share of Federal road funds or need to apply a fuel tax. Everybody in this nation knows that the Bruce Highway and other roads in Queensland are not up to the standard of the rest of the nation. That has been the case historically. Mr Braithwaite —Have you ever been on the Queensland roads? Mr DUNCAN —I have. I am going to Queensland again in December. I am looking forward to my visit. Since Federal Government funds have been expended on Queensland roads one can see some significant improvements. Those improvements will continue as a result of moneys expended under the bicentennial road program and other Federal programs. But we will not cop any of the blame for the Queensland Government choosing to introduce a road petrol tax in Queensland. Queensland is the only State that does not have one. All the other States have long had petrol taxes. It is not the responsibility of the Federal Government that Queensland now has to impose a road tax. Queensland motorists should ask Mr Hinze for a concrete guarantee that any road taxes imposed in that State be spent entirely on roads. If the Queensland Government wants to introduce a tax to assist its financial position generally it ought to have the guts to say so. If it wants to impose taxes on motorists for expenditure on roads, likewise it ought to say so. The Federal Government makes it clear that a portion of the fuel taxes it raises goes to general revenue. The Queensland Government ought to have the guts to say likewise. It should not try to push the blame for the tax raising measure it is proposing on to the Federal Government. None of the blame is ours. It is entirely a matter for the Queensland Government. Mr HOWARD —I ask the Prime Minister: Are the Parliament and the nation to assume from the previous answer he gave to the honourable member for North Sydney that in future his Government will remain totally silent in the face of acts of violence by groups opposed to the South African Government in South Africa, no matter what the ferocity of violence, the nature of the act perpetrated or the innocence or otherwise of people against whom that violence is practised or targeted? Mr HAWKE —The answer to the question is no. It follows from not only all that I have said in my previous answer but also all that I have said before in this House and outside it that neither I nor the Government condone violence. We deplore it. That was made quite clear to everyone in this House who wished to listen to what I had to say. I deplore violence. I said that I did. I have consistently said it in this House, and I have consistently said it outside the House. So it is a deliberate perversion on the part of the Leader of the Opposition to try to imply otherwise. All this has arisen from the reported comments of the Ambassador to the United Nations. My friend and colleague Mr Hayden has put in front of me his exact words which, he reminds me, were also used last year. Mr Woolcott said: In the face of this continuing oppression and massive disregard for human rights it is important both to note and to pay tribute to the efforts by South Africans of all races to challenge their Government's policies and to call for fundamental change. In the face of the violence meted out to them some of them have felt compelled to resort to violence. My Government does not condone resort to force and violence as a matter of principle but it will not condemn them for doing so. Mr Sinclair —Precisely. Mr HAWKE —At least get what he said into the whole of its context. He said: We understand the frustration and bitterness that they must feel in South Africa's repressive and unyielding political, social and economic climate. Indeed, it would be surprising if those who were being repressed failed to take a determined stand against their misguided rulers. I ask the Leader of the Opposition not to giggle and laugh but to listen to the question I put to him. If he were a black person in South Africa and his child had been shot in the back or had been beaten up in gaol by South African police and the Government which had practised these policies and produced that situation had consistently refused to sit down at the table and negotiate, does he say in all honesty that the thought of the exercise of violence would not occur to him? Dr THEOPHANOUS —I ask the Minister for Foreign Affairs and Trade: What are the latest developments in the continuing crisis in Kampuchea? Does the Foreign Minister envisage a further initiative by Australia to bring the various parties together? Mr HAYDEN —I am glad that at least the Government will direct questions on foreign affairs to the Minister for Foreign Affairs and Trade. It gives me a chance to answer questions on these matters, although I must say that the way in which the Prime Minister answered the last couple of questions demolished some of the misunderstanding, if not misrepresentation, which has taken place on the matter. I commend the honourable member's continuing interest in Kampuchea. He has compiled a rather compendious document on the situation in Kampuchea which includes a number of suggestions for possible initiatives in the future. What we need in the West, where we share a concern about the need for a resolution of the problems in Kampuchea, is creative thought which will respond to some of the hitherto intractable difficulties which have arisen. What is encouraging in recent times, however, is the degree to which dialogue is taking place or is about to take place. For instance, Hun Sen, the Prime Minister of Kampuchea, according to quite reliable reports, is about to engage in dialogue in Paris with Prince Sihanouk. This will be a major breakthrough. On top of that we have the initiatives which have been undertaken by Foreign Minister Mochtar of Indonesia. These have been aimed at trying to get together the representatives of the various groups from the Kampuchean factions-Democratic Kampuchea and the other members of the coalition forces or whatever-for the purpose of trying to sort out whether there is the prospect of putting together a set of principles which can lead to a resolution of this problem. There has been talk about so-called cocktail parties, unofficial meetings and so on. The Australian Government, for its part, has made its contribution. We have made contact with various groups from time to time. We have sought to encourage dialogue to take place across differences, whether on the side of Indo-China and its supporters or on the other side. I recall that at the first post-Association of South East Asian Nations (ASEAN) conference I attended, in Bangkok in 1983, I pointed out that, militarily, time was on the side of the Vietnamese and that the fires of hell would freeze over before they withdrew as a result of military pressure. I pointed out that there would have to be a political solution. Three post-ASEAN conferences back in Kuala Lumpur I listened with fascination as Foreign Minister Siddhi of Thailand said exactly the same thing-that time was running out for those of us in the West who were concerned to see a resolution of this problem if we believed that resolution could depend on military measures alone; that it had to be a political solution. This loosening up, in a relative sense, which is now taking place is encouraging, because it indicates that a political solution may be established and may be pursued-I trust successfully. The honourable member may rest assured that the Australian Government will continue to play an active and constructive role in this area. Earlier we were subjected to a range of criticisms, including some from people on the Opposition side, for the initiatives we have taken in this matter. In 1985 there was some misunderstanding in the media about contact I made with Prime Minister Hun Sen of Kampuchea when I met him in Ho Chi Minh City. I then engaged in extensive discussions with him about the prospects of political processes being put in place. I think it was worth persevering with those things. I think it was worth putting up with the discomfiture which took place in the wake of some of them-in particular the last one which I mentioned. I think they were important contributors-with many other sources of contribution-to the evolution of developments which we are now seeing. I repeat: I sincerely trust that what we are now seeing will result in formulas being brought together which can bring about the essential and sustainable ingredients to bring about, in turn, a peaceful settlement of the situation in Kampuchea. But it must be understood that a peaceful settlement must involve as a sine qua non the withdrawal of Vietnamese forces, the setting up of a freely and independently selected system of government by the people of Kampuchea, and guarantees for the security of countries of the region. Mr PEACOCK —I refer the Treasurer to recent Press reports that the Western Australian State Government Insurance Commission-- Mr Hand —Who wrote it-John Elliott? Mr PEACOCK —Do you want him to give you some more money, or what? In what way does the Minister want to use the funds-- Madam SPEAKER —Order! The Deputy Leader of the Opposition will ignore the interjections. The honourable member for Melbourne will cease interjecting. Mr PEACOCK —I refer the Treasurer to recent Press reports that the Western Australian State Government Insurance Commission has purchased seven properties plus a parcel of Broken Hill Proprietary Co. Ltd (BHP) shares for a total of nearly $500m from the Bell Group. I also refer the Treasurer to a report in the Sydney Morning Herald of 12 November concerning the exposure of some Australian banks to the Bell Group. I ask whether the Treasurer was informed of these purchases and whether he was informed of any borrowing by the Commission to finance the transactions. Furthermore, without reflecting on the financial position of any corporation, commission or bank, I ask the Treasurer whether the Reserve Bank of Australia, under its procedures for the prudential supervision of the banking system, was informed of these transactions, and also whether it has taken any action recently to monitor the risk exposure of banks. Mr KEATING —I think it has been the policy of the Government from the outset of the dramatic fall in stock market prices to keep the Australian financial system liquid. We have seen that occur in these last three weeks; particularly when the exchange rate moved down a week or so ago, the Government chose not to tighten up monetary policy unduly to defend the rate against that market change for the purpose of keeping the system liquid. The Reserve Bank, in doing that, also has, I think, undertaken to talk to the individual banks in Australia about their exposure. Certainly it has been the Governor's view and the Board's view that the banking system ought to be kept liquid so that lines of credit are not withdrawn with companies being put into difficulties as a result of that. Also, I think arrangements are in place for the major trading banks to let the Reserve Bank know if any particular client of any bank is in difficulties. So far that has not happened. As far as the State Government Insurance Commission in Western Australia is concerned, I did notice a Press report today that it has purchased 2 1/2 per cent of BHP stock. I do not know whether this would be a normal or an abnormal transaction for an insurance corporation of this dimension. Its purchase of property in the last week or so was, as I understand it, one of a strategic holding within the city of Perth-which, again, is a commercial matter for the State Government Insurance Commission. Certainly as far as the Commonwealth is concerned, this purchase neither implies nor begs any addition to the borrowing authorities to be exercised by Western Australia under the Loan Council arrangements. I might say that even if such requests were made or needed to be made they would not be granted. Mr JENKINS —My question is directed to the Minister for Employment, Education and Training. Is it a fact, as reported in the Australian newspaper of last week, that the Minister ordered changes to the naming of some approved Australian research grants projects for 1988 in order to avoid political embarrassment from the outlandish nature of some of the projects? Mr DAWKINS —It is true that in recent times I have had the recommendations from a number of research granting bodies, particularly the Australian Research Grants Committee, before me and, in approving all of the recommendations which were made to me for research grants, I did take the opportunity to discuss with the Committee the short titles that some of the projects had been given. These short titles are not so much the creation of the individual applicants, but rather the creation of the Committee itself. I took up with the Chairman the suggestion that he might review some of those short titles in order to avoid any possible misrepresentation. I did this because last year and earlier this year the Opposition tried to make some very cheap capital out of some of the descriptions which were given to these research grants. The Opposition has not been prepared to tackle the merit of these research grants or the proposals which they support. Rather it has tried to make some cheap political capital-very irresponsibly, I think-out of some titles which were apparently, at least to it, quite amusing. I thought that under those circumstances, in order to avoid the possibility for that kind of irresponsible political behaviour, I would take up the matter with Professor Aitkin, Chairman of the Research Grants Committee. He has agreed with me that it is a relatively simple matter for the Committee to review some of the short titles in order to avoid what he sees as the opportunity for beat-up merchants, as he mentioned on an Australian Broadcasting Corporation program the other day. So he is proposing that a proposal for research into the mating habits of the red kangaroo should be entitled `The reproductive behaviour of the Macropus rufus'. Maybe the Opposition is able to make something out of that. I dare it to try. I would make the point that in considering these recommendations I have not made any attempt, as was suggested in some quarters, to interfere with the actual recommendations of the Committee. All the recommendations have, in the normal course of events, been approved. Mr N.A. Brown —My question is directed to the Minister for the Arts, Sport, the Environment, Tourism and Territories. Does the Minister still maintain that no contract was ever made between the Australian Government and Mr Bob Rogers's company for its work on the theatre in the Australian pavilion at World Expo 88? If so, will he tell the House why Mr Rogers's company is entitled to compensation if no such contract was ever made? Thirdly, will he also explain why several Australian companies which responded to his invitation to make proposals for this project, and which have also made claims based on the same expectations as Mr Rogers, have all had their claims rejected? Finally, is it a fact that at a meeting with Mr Rogers the Minister, without any authority to do so, committed the Australian Government to give this contract to Mr Roger's company and that this, and only this, is the real explanation for these obvious conflicts? Mr JOHN BROWN —I will answer the fourth part of the question first. At the meeting on 7 December I was given a unanimous recommendation by my advisory committee that Mr Rogers should be given the contract for the theatre at Brisbane's World Expo. The nature of that agreement was that he would be a sub-contractor to AAV Australia as the chief exhibitory contractor. Mr Moore —So there was a contract. Mr JOHN BROWN —No contract was ever formally entered into or signed. Mr Rogers is seeking reimbursement of expenses incurred between that date, 7 December, when he was given permission to proceed with preliminary work, and the date in February when a decision was made not to proceed with a contract. Mr Hawke —There is no inconsistency. Mr JOHN BROWN —No, I do not think there is anything inconsistent in what I said. No contract was entered into. Mr Rogers is seeking reimbursement of expenses incurred in that period in anticipation of a contract that was never consummated, never formed and never signed. Mr Howard —So it is an act of grace. Mr JOHN BROWN —It is not an act of grace. Negotiations have been proceeding between the Attorney-General's Department and Mr Rogers's solicitors as to whether he does have a claim and, if he does have a claim, what the amount should be. I do not think I should comment further on that matter because it may in some way prejudice the position of either the Commonwealth or Mr Rogers. Mr N.A. Brown —I take a point of order, Madam Speaker. You will recall that I asked the Minister, in addition to the matters he has covered, whether Australian companies had made similar claims and had them rejected. Madam Speaker, I ask you to direct the Minister to answer that part of the question. Madam SPEAKER —I do not think the Chair can do that. Mr JOHN BROWN —Madam Speaker, I cannot recall any Australian company making any specific claim, but I will check that and provide the honourable member with the information. Mr BRUMBY —I direct my question to the Treasurer. Has the Treasurer noted comments by the Federal President of the Liberal Party of Australia that Australia's exchange rate should be held at US61c or US62c? What would be the impact of holding the exchange rate at that level? What is the Government's position about those calls? Mr KEATING —I am quite sure that the Federal President of the Liberal Party of Australia is directing a bit of gratuitous advice to the Government on where he thinks the exchange rate ought to be. In fact, he is in a practical sense directing such gratuitous advice to the market because, in case he has forgotten, the Australian dollar was floated in 1983. It is the market that makes the judgment about where the exchange rate ought to be from time to time. It is interesting to note that in just the last two days we have had proclamations-they are indeed proclamations-by the Federal President of the Liberal Party in respect of budgetary policy. He has urged precisely-he is quite precise about these things-a $3 billion Budget surplus, in the face of the Liberal Party's policy of an outcome which would have been basically near a deficit of $3 billion. Now on the issue of the exchange rate we have had another proclamation about where policy ought to be directed. It leads one to the obvious conclusion that, while he is entitled to speak as the chief executive of Elders IXL Ltd, bearing in mind his recently assumed responsibilities, he has decided blithely to ignore his chastisement more recently at the hands of the Leader of the Opposition and the Deputy Leader of the Opposition about his prerogatives in respect of policy and pronouncements about policy. He has decided that he can best speak for business and the Liberal Party's interests. Therefore one can only assume that these references by him to major areas and tenets of policy are his view of how the Liberal Party ought to be conducting economic policy if it were in government, and where the Liberal Party's or commercial Australia's-he obviously sees them intertwined-interests ought to be. That just renders further the impotency of the Leader of the Opposition in having an impact upon Liberal Party policy. I notice that in his Press conference this morning the Leader of the Opposition said very quickly, referring to the dollar: . . . I don't make it a practice, nor does the Liberal Party, of nominating at a particular level. He may not do so. In a general sense, that is good sense. But Mr Elliott has decided that he now speaks with authority for the Liberal Party. He is the one who will be making any statements. He has flicked off very quickly the so-called rap over the knuckles that he received and has got back to the main business that he thinks he is good at, which is telling others, including the Liberal Party, how to run their affairs. The only room one can provide him for this exercise in indulgence in speaking on his part is that, given that he is organisational President of the Party, he has to suffer the current leadership of the Opposition and I suppose he thinks, `Why shouldn't I?'. Mr HOWARD —My question is addressed to the Minister for the Arts, Sport, the Environment, Tourism and Territories. Is it not a fact that despite his claim in answer to an earlier question that `no contract was formally entered into or signed'-those were the exact words used by the Minister-he has in fact been advised by the Attorney-General's Department, despite that claim of his, that the whole of his conduct in this matter has created a legal obligation on the part of the Government to the Rogers company and that it is on the basis of that legal obligation that the negotiations to which he referred in his answer are now proceeding? Mr McVeigh —Stand aside, Brownie. Mr JOHN BROWN —The honourable member stood aside; he is up on the back bench where he belongs. In answer to the Leader of the Opposition's question, that is not the advice that has been offered by the Attorney-General, as I understand it. There was preliminary advice offered last August by a Government solicitor that Rogers could make a case. The solicitor thought that he might be entitled to reimbursement of expenses incurred-- Mr Howard —On the basis of the contract. Mr JOHN BROWN —No, not on the basis of a contract. He might be entitled to reimbursement for expenses incurred in planning for the World Expo. There is no contract. There was never any contract. Negotiations are proceeding between Mr Rogers's solicitors and the Commonwealth's solicitors as to whether he has a claim for the expenses incurred and, if he has, of what amount. Mr Tim Fischer —I take a point of order, Madam Speaker. The Minister has just quoted from preliminary advice from the Crown Solicitor. Presumably it is in the papers that he had in his hand. I ask that he table that in the House. Madam SPEAKER —Was the Minister reading from a confidential document? Mr JOHN BROWN —I was reading from nothing except some written notes of mine. Mr RONALD EDWARDS —I direct my question to the Minister for Land Transport and Infrastructure Support. Has the Minister seen reports in today's Press of the financial outcome of Qantas Airways Ltd's activity for 1986-87? Can the Minister provide the House with details of that? Further, in light of the fact that there is a current crisis concerning seating capacity on flights into Australia provided by Qantas, in particular into my home State of Western Australia, can the Minister outline the activity that Qantas may take to try to overcome that difficulty? Mr DUNCAN —I thank the honourable member for his question. I am sure that honourable members know of the keen interest he has shown over the years in increasing the number of international seats into Perth. It is certainly the case that Qantas performed very strongly in 1986-87, with a record profit of $104.3m-the highest figure ever recorded by the company and an increase of over 133 per cent over the previous year. Its revenue earnings were $2.6 billion-an increase of 27 per cent. It earned 65 per cent of that amount overseas. A very creditable $1,672m was earned by Qantas and that was a direct contribution to our balance of payments. The dividend that Qantas has paid to the Government is $20.2m and that reflects the initiatives that the Government has taken to place Qantas on a firm, sound commercial footing. I am very pleased to advise the House that during the past year Qantas, for the very first time, carried over three million passengers, which was a very good effort. As to the current international airline capacity situation, October of this year saw a large increase in Australians wishing to return home, plus increases in foreign visitors, to which the Minister for the Arts, Sport, the Environment, Tourism and Territories has referred on previous occasions. That caused a very heavy demand for seats, particularly into Australia but also out of Australia. To meet that, Qantas has arranged to operate 162 supplementary flights between now and February. Also, some 80 supplementary flights will be provided by foreign airlines into and out of Australia. I note in passing that Qantas has only 42 per cent of the normal capacity into and out of Australia. Those figures-it will operate 162 supplementary flights and all of the other 32 operators into or out of Australia will operate only some 80 flights-are a clear demonstration not only that the current arrangements are flexible enough to meet the needs but also that Qantas is operating in the nation's interests and is undertaking the sorts of responsibilities that all honourable members would want it to undertake as a great Australian national asset. As to the longer term, the Government intends taking steps to ensure that capacity is available for the longer term demand. I can tell the House that negotiations are currently under way with Singapore, Hong Kong, Malaysia, the United States of America, Canada, Yugoslavia and Austria. Since the 1983 election, an additional 800,000 international seats have been introduced. By the middle of 1988, the bicentennial year, the figure will have risen to 1.25 million. This represents a permanent increase of over 36 per cent in inbound capacity over a quite short period. I think that the story Qantas has to tell clearly demonstrates the fact that not only Qantas but also the Government has been responsive to the needs of the nation. We have been concerned to ensure that proper and effective steps are taken to ensure that adequate seating is available for tourists and others wanting to come to this country. We will continue to do so. In closing I mention that Qantas is planning major aircraft acquisitions over the next few years, amounting to $4 billion over the next five years, to ensure that anybody wanting to come to this country will have the opportunity to do so. Mr HOWARD —I refer the Attorney-General to the undertaking he gave yesterday to get a report on the matter involving the Rogers company and the Minister for the Arts, Sport, the Environment, Tourism and Territories. Has the Attorney-General received that report? Will he table all legal advisings provided in the matter, including the legal advising referred to explicitly by the Minister in his last answer, and will he table those documents today? Mr LIONEL BOWEN —The answer is no, for this reason: yesterday I said that I was not aware of any advice that was given and I would make inquiries as to whether advice was, in fact, given. I can tell the House that advice was given at the request of the Minister's Department and, in accordance with negotiations that are now taking place between the Australian Government Solicitor and the solicitor representing Mr Rogers or Mr Rogers himself-- Mr Howard —Have you read the advisings? Mr LIONEL BOWEN —I have read the advice and, on that basis, it would be inappropriate at this stage to tender anything because there are negotiations. Mr MARTIN —Can the Minister for Resources inform the House of the reaction to the Government's announced coal industry assistance package? Mr PETER MORRIS —I thank the honourable member for his question. The honourable member and the House will be aware that over some considerable period the Government has been putting together a package which involves this Government, the State Government, the mining unions and the mining companies with a view to outlining a longer term strategy for the industry and to developing means of improving the efficiency of the industry, its reliability and, most of all, its competitiveness. Honourable members will be aware also that in that period there have been some pressures on the industry from abroad, with the general overcapacity that exists in the coal mining industry. That pressure has borne upon prices as well as the operations of some of the mines. In all of that process, there have been continuing negotiations. The arrangements that have been developed between this Government and the State Government provide for a contribution of some $20m by this Government over two years and $20m by the State Government over two years. That is linked to improvements in the productivity of the mines. The negotiations that are under way are linked to a commitment by the industry on the future of its operations. All of those matters are under way. I believe that the response has been positive. There has been some reaction from, for instance, the Leader of the National Party of Australia, who, I thought, would have had an interest in the continued operation of the mining industry. It surprises me that the Leader of the National Party has seen fit to decry the efforts of all involved to improve that industry's efficiency and competitiveness and, most of all, to try to improve the outlook for certainty of employment. We will continue to work towards that strategy in consultation with all the parties involved. I retain a confidence that the positive outcome for which we are looking will be achieved. Madam SPEAKER —I present the report of the Auditor-General dated 17 November 1987 upon an efficiency audit of the Australian Government Publishing Service. Motion (by Mr Young)-by leave-agreed to: (1) That this House, in accordance with the provisions of the Parliamentary Papers Act 1908, authorises the publication of the report of the Auditor-General dated 17 November 1987 upon an efficiency audit of the Australian Government Publishing Service, and (2) That the paper be printed. Mr PETER MORRIS(Shortland-Minister for Resources) —Pursuant to sub-section 30 (5) of the Rural Industries Research Act 1985, I present the annual report of the Cotton Research Council for 1986-87. Mr PETER MORRIS(Shortland-Minister for Resources) —Pursuant to section 19 of the Soil Conservation (Financial Assistance) Act 1985, I present the annual report of the Soil Conservation Advisory Committee for 1986-87. Mr DUNCAN(Makin-Minister for Land Transport and Infrastructure Support) —For the information of honourable members, I present a report by the Federal Bureau of Transport Economics entitled Assessment of the Australian Road System: 1987. Madam SPEAKER —I have received advice from the Government Whip that he has nominated the honourable member for Eden-Monaro to serve on the Standing Committee on Transport, Communications and Infrastructure for the purpose of any inquiry into proposals for modification or variation of the plan of layout of the city of Canberra and its environs. The Clerk —Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers: The Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth. We most strongly oppose the process of Food Irradiation by radioactive Cobalt 60 or any other radioactive substance. We oppose the introduction of regulations that will facilitate the food irradiation process by State Governments. We express our deep concern at this attempt to extend the use of radioactive substances and exposure of workers to radiation. We call on the Government to immediately ban the importation of radioactive Cobalt 60 or other radioactive substances and to immediately disallow the regulations that permit the irradiation of food here in Australia. by Mr Beale,Mr Halverson,Mr Jenkins,Mr Kent,Mr Milton and Mr Scott. 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 Honourable the Speaker and 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 will not tackle in the most cost-efficient and effective manner tax and social security fraud. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to reject Labor's ID card proposal to prevent a gross waste of taxpayers' money and a significant infringement of civil liberties. And your petitioners, as in duty bound, will ever pray. by Mr Ian Cameron. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The humble petition of the undersigned citizens of Dawson electorate respectfully shows that: The Hawke Labor Government has no mandate to introduce its flawed and costly ID card proposal, and that the card will not 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. by Mr Braithwaite. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The humble petition of the undersigned citizens of Peak Downs 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 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 and Mr Ruddock. 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 experiments on human embryos. And your petitioners, as in duty bound, will ever pray. by Mr Lionel Bowen and Mr Ian Cameron. To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That we oppose 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 or Representatives, in Parliament assembled, urge the Government to: instruct the management of Telecom Australia to immediately cease all action to close any Telecom Business Offices, and to re-establish the services provided by TBO's already closed, And your petitioners as in duty bound will ever pray. by Ms Crawford and Mr O'Neil. The speaker and members of the House of Representatives in Parliament assembled. We the undersigned wish to draw to the attention of the House that `Telecom plan to reduce the 24-hours-service at the telegraph office at east block in February 1988 and completely close the office in November 1988'. In view of the `hundreds of thousands' words of public telex messages transmitted for politicians and journalists at Parliament House, the hundreds of after-hours customers using this office-the large profit made at this office-we request that Telecom be asked to retain the 24-hour until July 1989, when communications will be transferred to Australia Post. by Mr Braithwaite. 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 Braithwaite. 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 business 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 assembled: The humble petition of the undersigned citizens of Australia respectfully showeth: That we strenuously object to the proposal that many Post Office Agencies are to be closed. They provide a network of offices with postal and agency services to residential areas and small communities. They serve a community need and we would be seriously inconvenienced if forced to travel further to purchase postal items or collect parcels. It would be an unnecessary expense particularly for pensioners without their own transport. We maintain that the purpose of Post Offices should be to serve the public for the variety of services they offer. They are a community centre particularly in country areas and if necessary they should be subsidised to retain them. Your petitioners therefore humbly pray that the House should take all possible steps to prevent the closure of Post Office Agencies and that the network should be extended, with the Agency services they offer expanded. And your petitioners as in duty bound will ever pray. by Mr Cadman. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: After discussing with many professional artists just how they were being employed during Expo 88 and the Bicentennial Celebration, I find that emphasis is being placed on engaging professionals from overseas rather than from our Brisbane and Queensland performers. Even the arranging of the concerts at the cultural centre has been `farmed out' to a Sydney group. Again, this attitude still persists `that locals can't be as good'. I fully support visits by famous international groups such as the Bolshoi, but surely the overseas visitor wants to see our local culture and seeing that we have to `foot the bill' eventually, at least let us make sure that our professional artists are employed, The Expo 88 authority responsible for entertainment should publicly seek the services and suggestions from the professional in all the performing arts. We the undersigned suggest that the Expo 88 authority and the Bicentennial authority make sure that local professional artists are engaged during this most important international event. Your petitioners therefore humbly pray that Expo 88 authority and the Bicentennial authority make sure that local professional artists are engaged during this most important international event. And your petitioners, as in duty bound, will ever pray. by Mr Donald Cameron. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The 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 certain citizens of Australia shows- We object to the proposal of Telecom to charge for each three minutes of a local call, as we feel this would disadvantage the elderly and people who are unable to leave their homes. The telephone is often the only contact relatives can have to check on the safety and well-being of those they care for. The inordinate time span which elapses between connection to a business premises and speaking, as the caller holds the line or is transferred between departments, would also disadvantage subscribers who can ill afford it. Your petitioners therefore pray that Telecom abandons the proposal to time charge local telephone calls as we believe that the charges Telecom makes at the moment are quite adequate. by Mrs Darling. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully shows: We are concerned that- (a) the proposed changes in legislation to Unemployment Benefit for young people adds to the already ill-conceived and over-bureaucratic welfare system (b) the abolition of CEP and the inadequacy of other training programs and (c) cuts in funding for education, public housing and other welfare areas mean that young people's needs are being neglected by the Government. Your petitioners therefore pray that the Commonwealth Government immediately takes steps to: (a) establish an anti-poverty level of income for all young people regardless of whether they are in training, retraining, education, employment or unemployment. The first step in achieving this is the full reinstatement of Unemployment Benefit for sixteen and seventeen year olds with automatic indexation linked to CPI increases. (b) increase educational opportunities for all young people. The first step in achieving this would be to create 120 000 new places in higher and further education. This would make up for the 100 000 people turned away from TAFE courses and 20 000 people from universities and CAEs this year. (c) establish a long term job creation program. The creation of 53 100 jobs for those young people who have been unemployed over 12 months is required immediately. Your petitioners in duty bound will ever pray. by Mrs Darling. 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 the House of Representatives in Parliament assembled. The humble petition of citizens of Australia shows- That the people of New Zealand and the New Zealand Government have given an example to the world in their efforts to achieve a nuclear free South Pacific, and such decision being endorsed by the people at a general election. Your petitioners therefore pray that the Australian Government support the principled stand taken by the New Zealand Government and urges it to condemn any efforts by the U.S. Government to impose economic or other sanctions on New Zealand in retaliation for their stand on nuclear vessels. We further urge the Australian Government to urgently implement its policy to promote the development of zones of peace and nuclear free zones in the Indian and Pacific Oceans. by Mr Kent. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We, the undersigned citizens, respectfully showeth: That we are totally opposed to the introduction of the Labor Government's Identity Card. We consider that this form of national and compulsory identification will be intrusive, costly for taxpayers and business and will not be effective in combating the growing problems of tax evasion, illegal immigrants or social security. We therefore ask the House to take action to prevent the implementation of this legislation. And your petitioners as in duty bound will ever pray. by Mr McVeigh. To the Honourable the Speaker and Members of 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 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 Moore. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully sheweth that: The decision by the Department of Defence to close down the Macksville Sub-section of 41 Battalion, Australian Army Reserve, is of grave concern to the unit members and citizens of the surrounding districts. The decision to direct unit members to Coffs Harbour, some 60 km distant, would impose sufficient hardship to prevent many continuing in the reserve and be a major deterrent to potential members. Your petitioners humbly pray that the House of Representatives in Parliament assembled urge the Parliament to: Intervene to stop the proposed closure and sale of land at Wallace Street, Macksville, and initiate action to have a permanent Depot built on the Army's Macksville land. And your petitioners as in duty bound will ever pray. by Mr Nehl. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully sheweth 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 respect- fully showeth 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 Speaker and members of the House of Representatives in Parliament assembled. We, the undersigned citizens, respectfully showeth: That we are totally opposed to the introduction of the Labor Government's Identity Card; That this form of national and compulsory identification will be intrusive, costly for taxpayers and business and will not be effective in combating tax evasion, illegal immigration or social security fraud; That we are deeply concerned at the Labor Government's inability to provide effective and efficient methods to combat tax evasion and social security fraud without resorting to expensive, ineffective and authoritarian measures which are alien to the Australian way of life; That we call upon the Labor Government to improve management systems within the Australian Tax Office and other Departments to crack down on tax evasion and fraudulent practices. And your petitioners, as in duty bound, will ever pray. by Mr Porter. 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 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 Nationals 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 hygienic humus all presently wasted organic garbage and sewage-sludge mixed with fine ground powder from mineral-rich gravels and rocks, to use as a natural fertilizer 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. 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 Maranoa respectfully showeth that: Any proposals to time local telephone calls gravely concerns all country people. Isolation and communication was the second biggest problems facing rural women according to the ``Survey of Rural Women'' questionnaire and any attempt at timing local calls will add to this problem, not decrease it. Your petitioners humbly pray that the House of Representatives in Parliament assembled, urge the Parliament to: Ensure that Telecom do no proceed with the timing of local telephone calls. And your petitioners as in duty bound will ever pray. by Mr Ian Cameron. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Parkes electorate respectfully showeth that: An $8 million wealth inquiry proposed by all three factions of the Labor Party and the ACTU will give the Hawke Labor Government the information it needs for a Wealth Tax and the reintroduction of Death Duties. Your petitioners humbly pray that the House of Representatives in Parliament assembled, urge the Parliament to: Reject any plans Labor has to conduct a wealth inquiry and impose two new taxes on the Australian people and businesses, already struggling under 16 new Hawke Labor Government taxes. And your petitioners as in duty bound will ever pray. by Mr Cobb. Petitions received. Mr JOHN BROWN(Parramatta-Minister for the Arts, Sport, the Environment, Tourism and Territories) —Mr Deputy Speaker, I wish to add to the answer I gave to the honourable member for Menzies (Mr N.A. Brown) in Question Time. Mr DEPUTY SPEAKER(Mr Leo McLeay) —The Minister may proceed. Mr JOHN BROWN —He inquired whether any Australian companies had been refused reimbursement of costs. I have been informed that one other company, Greg Taylor Productions, has also sought costs incurred with the preparation of the second submission-that is, the second tendering process. All tenderers were provided with $3,000 to assist in the preparation of the first tendering process. The Greg Taylor Productions claim has been referred to the Attorney-General's Department, which has advised that the payments for costs incurred in the production of the second tender were not warranted. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Madam Speaker has received a letter from the honourable member for Gilmore (Mr Sharp) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The failure of the Minister for the Arts, Sport, the Environment, Tourism and Territories to lead Australia's tourist industry to achieve its full potential, resulting in the loss of job opportunities and income for Australia's economy. 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 SHARP(Gilmore)(2.56) —`Incompetence' is a word that Australians are increasingly associating with the Australian Labor Party in Canberra in government. More than just associating that word with a Labor government in Canberra, they are associating it with the Minister for the Arts, Sport, the Environment, Tourism and Territories (Mr John Brown), who is at the table. In 4 1/2 years of Labor administration we have had a litany of examples of incompetence, maladministration, sloppy technique and poor administration, and there has been no greater champion of all of that than the Minister. We are tired as Australian citizens and as parliamentarians of seeing examples such as this being trotted out by this Minister. Not only are the people of Australia tired about that but also they are becoming increasingly tired of this Minister making statements that mislead one of the Houses of Parliament. That is what we have seen not only in the last 24 hours but over the last 4 1/2 years. Mr John Brown —I raise a point of order, Mr Deputy Speaker. If the honourable member for Gilmore wants to accuse me of misleading the House, he should do so by way of a substantive motion under the Standing Orders. If he wants to move a censure motion, that is up to him. As far as I understand it, this is not a matter that should be canvassed in a matter of public importance. Mr DEPUTY SPEAKER —The honourable member for Gilmore should be aware that if he wishes to accuse a person of misleading the House, as I had occasion to remind him the last time he proposed a matter of public importance, it can be done only by substantive motion. If the honourable member for Gilmore wishes to proceed along the lines of claiming misrepresentation he should do it in the way in which it should be done; otherwise he may continue with his contribution. Mr Peacock —Stop protecting your factional mates. Mr Howard —Stop protecting your mates. Mr John Brown —I raise a further point of order, Mr Deputy Speaker. I hope you overheard the two interjections, that you, in the chair, are protecting your factional mates. It is a direct and incredible slur on your integrity. Mr DEPUTY SPEAKER —Order! Honourable members on my left were a bit worried about the time of the honourable member for Gilmore being used up. They now seem to be interested in using his time. I did not hear the interjections. I would think that if they were made they were rather stupid because the Minister is more than able to look after himself. Mr SHARP —Yesterday the Minister was caught with his pants down. Mr Peacock —On the table? Mr SHARP —In the House. He is the Minister at the table. This has happened not just on this occasion. To substantiate that I will quote from yesterday's Hansard, from a question asked by the honourable member for Menzies (Mr N. A. Brown) and answered by the Minister. The honourable member for Menzies asked a question about Mr Bob Rogers and a $5m contract that his firm had been awarded to build facilities at Australia's pavilion at World Expo 88 next year. The Minister said, `Bob Rogers has applied for recompense, when a verbal agreement was made with him and my committee to have a contract, with me, if you like. Does that suit you? I was there; I have never denied that'. In other words, yesterday the Minister told the House, and he repeated it here today, that there was a contract between himself, as a representative of this Government, and Mr Bob Rogers, representing a United States firm, to carry out a $5m contract at World Expo on Australia's behalf. I repeat that yesterday he admitted that that was the case. It was a verbal agreement for sure, but we all know that in business practice, when a Minister of the Crown gets up and says, `You can go ahead and do it, spend the money, get the job on the way', that person has at least to expect that the word of a Minister of the Crown is worthy of what it says, that it will be carried out and that it is honourable. Unfortunately, Mr Bob Rogers has found that that was not the case. To point out where statements that I referred to earlier were correct: on 20 February of this year, in answer to a question about Bob Rogers and the contract, asked by the honourable member for McPherson (Mr White), who at the time was the shadow Minister for sport and tourism, the Minister said, `. . . there is no contract so the question falls down'. That is straight out of Hansard. That is exactly what the Minister said on 20 February; it contradicts what he said yesterday and it contradicts what he said in the House today. I would put to the House that that is a gross example, at the very least, of incompetence, because I would say that the most serious act of incompetence a Minister of the Crown can engage in is not to tell the story as it really is. As a result, the taxpayers of Australia are going to have to pay $250,000 to overcome the mistakes that this Minister has been involved in. Now $250,000 is a lot of money. Do honourable members know that it takes 2,471 average Australian wage earners, sweating, working and paying tax to this Government for a whole week in order for the Government to get $250,000? This Minister has wiped out the contribution that the 2,471 average wage earners have made to this nation in one fell swoop of incompetence. That is costing us all very dearly. It is the sort of example of the cost that this country is having to wear because of the incompetence of this Minister and, indeed, of this Government. The cost of this Minister is well known. He is well known for being the Minister for good times. In 1984 it cost $15,800 to hire two Mercedes Benz cars for a lovely jaunt across Europe. He needed two because he could not possibly travel with all his luggage and he had to have another car for that. That is an example of the sort of incompetence that is costing this country dearly, and it is costing this tourist industry, the shining light in Australia's economy at the present time. Yesterday we had that example of the sort of incompetence that the Government is engaging in and that this Minister is engaging in. The Hawke Ministry is full of lots of examples like that. We have only to think of the Amann Aviation Pty Ltd scandal, one of the grossest examples of maladministration and incompetence that this Parliament has ever seen. It was carried out by Senator Gareth Evans; the present Minister for Land Transport and Infrastructure Support (Mr Duncan); and the former Minister for Transport-incompetence on a gross scale. Do honourable members know-I am quite convinced-that this Minister could not even run an ice cream stand on a hot day, he is so incompetent. The list of incompetence goes on and on. A view that is increasingly growing in popularity around the community is that this Minister at the table is an accident waiting to happen. Everywhere he goes something goes wrong. I guess we could say that this Minister is the Sergeant Schultz of Stalag 13, and if he is the Sergeant Schultz of Stalag 13, the Prime Minister (Mr Hawke) is the Colonel Klink of Stalag 13. There is no doubt that if there is to be a Colonel Hogan in this Parliament, it has to be the Leader of the Opposition (Mr Howard), because he is the sort of person who has the right views. The Government is bumbling around the countryside, mucking things up and costing the taxpayer an incredible amount of money through its own incompetence. Of all of the Ministers in this Government who are incompetent, this Minister has to take the cake. There are lots of examples of ministerial impropriety that we could use to show just how bad this lot is. I want to draw the attention of the House to something that fell off the back of a truck and came my way recently. It is a transcript of a conversation by car telephone between John Brown and Don somebody or other, which took place at 7.20 p.m. on 6 April 1987. Mr John Brown —Mr Deputy Speaker, I raise a point or order. I knew that the Opposition could stoop to pretty low depths, but to start quoting an unauthenticated version of an alleged car phone transcript in this House is scraping the depths of depravity, to which I thought even those opposite could not approach, and I object very strongly. Mr DEPUTY SPEAKER —Order! The honourable member might be aware of statements that the Speaker has made in the past about using privilege as a mechanism to slander people. The Minister has taken a point of order and raised some objection to what he thinks the honourable member is going to say. It is not within the Chair's purview to know what the honourable member is going to say. I am sure the honourable member will bear in mind what I have said when he continues his point. Mr SHARP —Thank you, Mr Deputy Speaker. I refer to this alleged document, and I do say that it did come my way off the back of a truck. But I want to draw it to the attention of the House because I believe all honourable members of the House should have a copy of it as it is a great indication of the way in which this Government carries out its affairs. I would suggest that all honourable members read it, and if they are going to read it, they should read a comment made by somebody called Don, who refers to the fact that he had boffed-- Mr Cunningham —Mr Deputy Speaker, I raise a point of order. The honourable member is quite clearly going to talk in relation to something that fell off the back of a truck. The responsibility of an honourable member to authenticate his statements in this House, when speaking under the privilege of the Parliament, should not be abused in that way. If it fell off the back of a truck he should name his source and put it on the record. Mr DEPUTY SPEAKER —Order! It is not within my understanding to know what the member is going to say before he says it. Mr SHARP —I just want honourable members to take note of the comment of Don, who claims that he had boffed a female journalist. For those who do not know what the meaning of the word `boffed' is, an analogy can be drawn with what this Government is doing to our economy. That gives honourable members a very good idea of what the word `boffed' means in relation to a female journalist. If honourable members are going to read it, I want them to read the first page and the last couple of lines, because that will be of great interest. I just want to quote from it, if I may. It states that Don-this is the alleged Don-says, `I have boffed her, so that is all she knows'. The person purported to be Brown says, `Oh, good for you. Big tits?'. That is the sort of business that is engaged in by this Minister. What they were discussing at the time was the contract with Bob Rogers in relation to the World Expo pavilion for Australia. Mr John Brown —Mr Deputy Speaker, I raise a point of order. Quite apart from degrading his own image, if he has one, to allow this sort of unauthenticated drivel to be used in this House in a serious debate is beyond my comprehension. How the honourable member can stand here as a decent member of this House and quote from some document that has allegedly fallen off the back of a truck, is allegedly a transcript of a car telephone conversation of mine, is beyond my comprehension. He is below disgust. Mr DEPUTY SPEAKER —Order! Members are not required to authenticate documents. Mr John Brown —Mr Deputy Speaker, the honourable member for Groom is walking out of the chamber in disgust at the action of his colleague and he told me that that is what he is doing. Mr DEPUTY SPEAKER —Order! The honourable member for Gilmore has brought into the debate material which only he knows where it came from. It is not within the purview of the Chair to require him to do anything other than continue his remarks. Mr SHARP —In the time I now have available to me I will substantiate the claims of incompetence of this Minister. I will run through a list which he can call the top 40 if he likes and it goes like this. The sorts of things which the Minister has suggested and championed are measures such as the Ayers Rock monorail which he mentioned just the other day and the Christmas Island fiasco. Honourable members will remember that that was mentioned in the last couple of weeks. The Minister promised that the 300 miners who work on Christmas Island would have work for the next 2 1/2 years, but within three weeks of that promise being made it had been broken. The mine will now be closed down. A racehorse breeding syndicate was endorsed by the Minister. Mr DEPUTY SPEAKER —Order! The honourable member's time has expired. Mr JOHN BROWN(Parramatta-Minister for the Arts, Sport, the Environment, Tourism and Territories)(3.11) —I really feel that I should not dignify the speech by the `honourable' member for Gilmore (Mr Sharp) with a response or an answer. However, given the forms of this House, I will respond. Like the honourable member for Groom (Mr McVeigh), I am entirely disgusted with what the honourable member for Gilmore, who I thought had some talent, has put forward in this debate to support a matter of public importance which he supplied to Madam Speaker and which was accepted by her as being a matter of such importance that it should be debated in this forum. I am sure that any Australian who has the opportunity to read the transcript of the speech of the honourable member for Gilmore will lose what little respect he or she might have had left for this institution. This person has been put up by the Opposition as a serious shadow Minister; yet for a quarter of an hour he used such arguments to back up a matter of public importance that states: The failure of the Minister for the Arts, Sport, the Environment, Tourism and Territories to lead Australia's tourism industry to achieve its full potential, resulting in the loss of job opportunities and income for Australia's economy. All that he provided in his speech by way of employment was a couple more headlines for the Eye or Truth, a couple of dirty, filthy magazines which I have no doubt he reads if the level of his reading approaches the level of his debate. I am surprised that more honourable members on the other side of the House for whom I have great respect did not follow the honourable member for Groom out of this place today. I am quite happy to answer, in serious terms, the matter of public importance which has been placed before the House today and dignified by Madam Speaker with a place on the blue sheet. I hope Madam Speaker has listened to the contribution of the honourable member for Gilmour so that in future when he puts up a matter of public importance for debate it will be treated with the scorn, disregard and disgust with which it should be treated. This Government's record in tourism is beyond compare throughout the world. Two weeks ago I was in Melbourne and I addressed the Society of American Travel Writers, which was having a convention there. It was the largest convention it has ever undertaken outside America and it was attended by 400 very serious American travel writers, the top of their profession. In answering my welcoming remarks the President asked, `How have you done it? How have you managed to get a 30 per cent growth in international tourism in Australia when the rest of the world is labouring along with a growth of 2 per cent?'. I would have thought that every honourable member, in a bipartisan fashion, would have been pleased to support at least one line that was offered by the honourable member for Gilmore, namely, that tourism is the glowing success of the Australian economy. I hope that some honourable members opposite will have the decency to look back in honest introspection at the performance of the previous Government in tourism. The product has not altered. Australia is still the beautiful, bountiful country it was when the government changed in 1983. Its beaches are as lengthy, as beautiful and as unpolluted, the skies are as blue, the people are as friendly and there is still the same safety and security in this country under this Government as there was under the previous Government. But what was lacking under the previous Government was any form of promotion. Under the previous Government, in seven years the budget for the Australian Tourist Commission languished. It went from $7.5m to $10m in seven years. In four Budgets and in the five years of my being responsible for the tourism portfolio the budget for the Tourist Commission has now reached $40m. The reason Australia has had this stunning tourism success is simply that we have managed to properly market the great product we have. To some extent God has given it to us and we have embellished it. In 1983 Australia had 800,000 international visitors. This year we will have 1.9 million. Next year 2.25 million people will visit Australia. This is an extraordinary growth of 200 per cent in four years. If anything stands to the credit of this Government it is the effort it has made in tourism. In 1983-after the Opposition's last year of government, after seven years of inactivity-the turnover for tourism in Australia was $8 billion. This year it is $27 billion, approaching 9 per cent of gross domestic product. It is easily the biggest industry in Australia. The honourable member, in his matter of public importance, talked about Australia not achieving its full income potential. How could one possibly answer that assertion in any responsible fashion? How could he possibly put up this matter of public importance and believe in it if he did not expect it to be a vehicle to use some filthy muck to denigrate me? The honourable member spoke about the loss of job opportunities. In 1983 employment in tourism in Australia was 200,000 people. This year it is 450,000 people. If that is not achieving our employment potential I do not know what is. It is to the honourable member's discredit that he seriously offers himself as a shadow Minister. One thing this Government has is great respect from the tourism industry. That fact was exemplified last week when 20 members of the top echelon of tourism in Australia, across the full spectrum of its activities, went with me, a Minister of this Government, to Japan. Only this morning one participant called me to tell me that today he had received a cable from the Japanese, who are anxious to invest $100m in a development in Australia, details of which he took to Japan last week as a member of that mission. This morning I mentioned to the honourable member for Franklin (Mr Goodluck) that the people who were most delighted with the success of that mission were the Tasmanians and the Tasmanian Tourist Bureau. The Liberal Premier of Tasmania, Robin Gray, provided a pamphlet. With the co-operation of a group of developers, tourism has had amazing success in Tasmania. People cannot believe the success of that mission simply because of the close co-operation and the close respect between this Government and the private entrepreneurs in tourism. If only we had the same co-operation between governments and industries across a wider spectrum how much better off we would be. I will not bother to list all of the things we have done in tourism but they have all been positive and, despite what criticisms are offered per se about governments, very rarely does the Press or the industry offer a criticism of this Government about its efforts in tourism. This makes us all the more entitled to laugh about the honourable member putting forward this matter of public importance. There are a few things honourable members may not know but are entitled to be made aware of. When I came to this job in 1983, in order to get statistics about tourism into Australia, I had to look back to 1979. The figures were four years out of date. After a long period of patient negotiation with the Department of Immigration and Ethnic Affairs and the Department of Foreign Affairs we got the gap down to four months. I am happy to tell honourable members that tourism figures are now available to the Australian industry in a fortnight, and that happens to be the lowest waiting time in the world. Figures are available to our tourism operators more quickly in Australia, because of the efforts of this Government, than they are in any other country. As I mentioned in the House yesterday, last week I was invited to Egypt by the Egyptian Minister for Tourism. If ever there was a country whose income has depended for two centuries on tourism, it is Egypt, with its incredible array of antiquities. How flattering for Australia to have its tourism Minister invited to Egypt to advise the Egyptians on how to improve their numbers of tourists. The success of Australia in developing a tourism product, which is now the envy of the world, is something of which we should all be proud. It grieves me no end to find my shadow Minister-the alternative Minister for tourism-coming in here today with this sort of flimsy matter of public importance and putting it up as a matter for serious debate in this House. I am sure that he must be embarrassed. To find his Leader sitting behind him making no attempt to stop his outpourings of gutter filth really amazed me. I would have thought that this House was entitled to a better standard of debate than that which we have just heard from my shadow Minister. It is no wonder that the Opposition is held in absolute disrespect, not only by the tourism industry, but also by the people of Australia generally. If ever the Opposition had an opportunity to win an election, it was last July. But what happened? We increased our majority. If ever a government threw caution to the wind, it was this one in going to an election when it did. But the Opposition could not even win then, and thank God it did not. We heard the ragbag promises that the Opposition made about tax cuts. Can honourable members imagine the effect on the Australian economy at the moment had the Opposition been sitting on this side of the House prior to the stock exchange crash? Can they imagine the disaster for Australia? The Opposition's efforts on tourism when it was in government were fairly representative of its understanding of business or promotion-they were deplorable. The Opposition had the opportunity of a lifetime. This country had more to offer the world as a tourist destination than any other country in the world. But lacking imagination, wit or any form of business knowledge, the Opposition let the opportunity slip; it let it slide away. We have not, and I am very proud to stand here as Minister for Tourism in this Government and stand on our record of achievement. How the Opposition could put up a matter of public importance which mentions `failure . . . to achieve its full potential, resulting in the loss of job opportunities and income for Australia's economy' as a serious matter for debate, is absolutely beyond me. I have already mentioned the figures. We have more than doubled the employment and we have trebled the turnover. We have trebled the number of international tourists coming into Australia. We are now the only country in the world that has the problem of too many tourists. What other country in the world has a national airline that has difficulty bringing in the number of visitors who wish to come? A veritable torrent of people want to come to Australia simply because it is recognised as a haven for tourists. That is because it is safe. We have managed to keep it safe and I will not claim credit for that for this Government alone-it is a credit to previous governments that Australia is the safest country in the world. We have a stable economy and a stable political system. We have everything going for us. All the Opposition failed to realise was that we had to tell the world about it. Why should Australia have been the best kept secret in the world? The Opposition has learnt nothing from its years in opposition. One would have thought that my fourth shadow Minister for Tourism would have learnt something positive about the tourist industry. Given the opportunity to come here in a serious debate, what do I find? I get personal abuse, absolute invective, unsubstantiated claims of misleading this House-not in a substantive motion-and quotes from some filthy farrago that someone has purported to put about as the alleged transcript of a phone conversation that I allegedly made to someone called Don. That is the serious contribution that the shadow Minister makes to a debate on tourism. We do not have too many such debates. I would have thought that the honourable member for Gilmore would have known better than that. I thought better of him. I hope that he takes the opportunity at the end of this debate to apologise. I do not propose to go on any longer. It is not a matter of running out of things to say; I have said them all before. I think that I have done more than I should have by dignifying this motion with a response. I am quite happy to rest on the laurels of this Government. They are there for everybody to examine. Australia is the tourism success of the world, acknowledged by every legitimate traditional tourist country. None of them has even approached our record. We have had a 32 per cent growth in international tourism. The average growth of the countries of the Organisation for Economic Co-operation and Development, which embraces all the traditional tourist countries-Greece, Spain, Britain, France and Italy-is 2 per cent and ours is 32 per cent. Yet the honourable member for Gilmore has the gall to come in here and put up this matter of public importance that purports to criticise this Government for failing to use Australia's potential. Our case rests. Mr SHARP(Gilmore) —Mr Deputy Speaker, I wish to make a personal explanation. Mr DEPUTY SPEAKER(Mr Leo McLeay) —The honourable member may proceed. Mr SHARP —I have been reflecting on the speech I made at the beginning of the debate on the matter of public importance. I wish to apologise for not reflecting the House in a good light. I wish to withdraw statements that I made in relation to an alleged car phone conversation among two people. I apologise to the House. Mr JULL(Fadden)(3.26) —Before I get to the substance of this particular matter of public importance, may I put on the record this House's deep and heartfelt thanks for the contribution that has been made to the development of tourism in this country by the entrepreneurs of the industry-the State tourist bodies, the inbound tourist operators of Australia and the many thousands of people who battled against all odds prior to 1983 to make sure that Australia had the nucleus of a tourist industry. I am not going to denigrate what this Government has done, but I am fed up with hearing in this House all the time that the magic tourism tap was switched on by the Minister for the Arts, Sport, the Environment, Tourism and Territories (Mr John Brown) in 1983 as soon as he came to government. That is not the fact. At a time when Australia is suffering the greatest foreign debt problems in its history and at a time when the balance of payments position of this country is in dire trouble, there is only one industry that is in a growth mode and that is tourism. There is only one industry that has the capacity to provide long term jobs for young Australians and that is the tourist industry. At a time when we should be doing absolutely everything we can to help that industry, to help our balance of payments and to encourage people to come to Australia, we have in fact an incompetent government that is trying to turn off that tap just as hard as it possibly can. I am fed up with reading the articles that have been put out by the Minister for Land Transport and Infrastructure Support (Mr Duncan) and the answers he has been giving in this House in the last few days about the real situation of inbound tourist seats to Australia on Qantas Airways Ltd and other international airlines. The plain facts are that there has been a complete and utter failure of any sort of real planning for the tourist industry in Australia by members of this Government. The Minister for Land Transport and Infrastructure Support and the Minister for the Arts, Sport, the Environment, Tourism and Territories must take their share of the blame. It is bilge to claim that this crisis of inbound seats to Australia has been caused, as we heard from Qantas today, by an increase of 17 per cent in the number of Australians travelling out of the country in September and coming back in October. The bilge, the garbage and the dish water that came out of the Minister for Land Transport and Infrastructure Support this afternoon in Question Time are sheer evidence of that. He has admitted that there has been a 30 to 40 per cent increase in the number of international visitors coming to Australia this year. Let us look at the real situation-not the panic moves by Qantas with 162 supplementary flights over the next two months, not the panic moves by the Department of Transport and Communications to let 80 supplementary flights by foreign carriers into Australia. Let us look at the real records. Last Friday I took some random samples from the international airlines coming into Australia. These are the real stories. Air-India is not noted as one of the major carriers into Australia. One would think that one would be able to get a seat on this airline. One cannot get a seat until mid-February 1988. One hundred people are wait-listed on all flights. With regard to Alitalia Airlines, we are getting inbound tourists out of Rome. The next available seats are in early February and wait lists are very heavy. The next available seats on British Airways are in late February and wait lists are very heavy, with most of them closed. The next available seats on KLM Royal Dutch Airlines are on 24 February. Wait lists for December and January are impossible but there is an outside chance that a seat might be available on a wait list in February. Lufthansa, the German airline, brings in the biggest spending tourists and we want to get them in. The next available seats on that airline are in mid-February 1988. It has very heavy wait lists, with no chance of getting on. With the Malaysian Airline System, the next available seats are in mid-February with heavy wait lists. The next available seats on Olympic Airways are on 19 February. On Thai International the next available seat will be on 3 March. On United Airlines the next available seat will be on 20 January, but that is a rarity. On UTA French Airlines the next available seat will be in early March. On Singapore Airlines the next available seat will be on 15 February. Is the Minister saying that this growth has been brought about purely by the bubble that suddenly burst? Is the Minister saying that the excuses now being made are being put up by the Government to get it over this interim period? The plain fact is that Australia is entering its bicentenary year next year and we have World Expo 88, but for four years the Minister responsible for tourism has been telling us in this House that we are to have two million visitors. He told us this afternoon that there were to be 2.3 million visitors. The unofficial estimate is 2.6 million. However, the truth is that there are not enough airline seats on aircraft coming into Australia to handle the increased traffic. That has been brought about by the lack of planning and lack of direction provided by this Government to the Department of Aviation, to the Department of the Arts, Sport, the Environment, Tourism and Territories and to Qantas itself. In the tourism industry, our only growth industry, the only industry able to provide jobs for young people, we are hearing excuses all the way down the line. We heard recently that Qantas was allowing supplementary airlines to come in if they wanted to. But let us examine the facts behind the applications by some of these foreign airlines. Those airlines will make money out of tourism into Australia; they will be bringing people into this country. Those airlines initially have to talk to Qantas to see whether Qantas will allow them to come in. That is why, whenever one has a question on notice about applications for air rights, one is told none have been laid. The reason is that, when most international carriers go along to Qantas, they talk and talk but nothing ever happens, and the airlines give up. Let me give the House some examples. Korean Air has been trying for five years to get into Australia; the matter has even reached the diplomatic level, but nothing has happened. Scandinavian Airlines Systems applied every year for 16 years to come into Australia, but gave up in frustration. Aerolineas Argentinas-and the Argentineans are some of the biggest travellers in the world-has been flying into Auckland for 10 years. The passengers hop off the 747s, hop on to the Air New Zealand 747 and off they go. That airline has been trying to come into Australia for 10 years, but Qantas has said no, because it has no interest in operating on the South American route. Then it hit the Press that Cathay Pacific, equal partners on the Hong Kong-Australia route, with seven services a week, said to Qantas, `There is too much traffic; neither of us can handle it. Let us have another one each'. Qantas said, `No, we will have two to your one'. This is what is going on. The Government may not be aware of it, but it is happening and must stop. A few years ago the Government said, `Let us bring in the charter operators', but the restrictions meant that a charter operator could not operate over an established Qantas route, despite the fact that with specialist tourist traffic the ground content must be bought here. But Qantas said no. What happened? There was one application from Denmark. Six months later the carrier still did not have approval, and had six weeks in which to sell 2,000 seats. It could not do so, and pulled out in disgust. All Nippon Airways operated services out of Tokyo into Cairns. What happened there? Sure, it got its charters, but as soon as that happened Qantas blackmailed again, went straight in on the route and knocked off the opportunity for any further charters. We continually hear from this Government the line that there are not enough hotel rooms in Australia. In only one city is there a major shortage of hotel rooms, and that is Sydney. It is interesting to analyse the relationship between flights into Australia and where people want to go. One sees from the figures that 81 per cent of the direct airline seats and flights come into Sydney. But what percentage of visitor nights are spent by international visitors in New South Wales? The answer is 32 per cent. Let me relate that to the position in Queensland. Queensland has a total of 16 per cent of all international flights, only 12 per cent of seats available, but 38 per cent of the total number of international visitors coming into Australia want to go to Queensland. Based on the figure of 16 per cent, Queensland gets 24 per cent of visitor nights. One can go through every State of Australia and see that story. The problem is that there has been no co-ordination, no planning and no leadership from this Government or from this Minister. There has been no leadership from the Department. Even last week, on November 11, when the emergency conference on seat availability into Australia was called, the contribution made by the Minister's Department, according to my information, was minimal. We had very little in terms of leadership from the Australian Tourist Commission. For the sake of our international financial position, for the sake of long term jobs for our young Australians, this Minister must take the lead. He must make sure that we have colleges that can provide staff. We should be sure to avoid the present position of having to import 3,000 people to work in the tourist industry because we have not enough trained staff. This is what leadership is all about. This is the way in which we shall get our economy a little better than it is now-through tourism. Mr MARTIN(Macarthur)(3.36) —The terms of the matter of public importance are an attempt to reflect on what purports to be a failure of the Minister for the Arts, Sport, the Environment, Tourism and Territories (Mr John Brown) to promote Australia's tourist industry to achieve its full potential. It also purports to suggest that there has been a loss of job opportunities and income for Australia's economy because of the policies of this Government. Judging by the contributions of the two Opposition speakers in this debate, one would hardly think that they had substantiated that claim. The Minister has already responded to the remarks of the honourable member for Gilmore (Mr Sharp) and I do not propose to add anything, other than to say that I share the view of many members on both sides of this House that that contribution was outrageous and that there was no need for it whatever. I wish to make a couple of points in emphasising that the terms of the matter of public importance are nonsensical. If the facts are examined and taken point by point, one can substantiate the view that this Government, through its leadership and that of the Minister, has contributed to the growth of tourism. It is a fact that $14 billion-worth of development is taking place right around Australia at this minute aimed at the tourist industry. The honourable member for Fadden (Mr Jull) made great play of the failure of Qantas Airways Ltd and the necessity to create opportunities at colleges of advanced education to train people for the tourist industry. In my electorate of Macarthur we have under construction and almost completed a brand new tourism and food school as part of the technical and further education college at Wollongong. That will do exactly what the honourable member is asking the Government to do, that is, to provide opportunities to train people in the hospitality and tourist industries. That goes side by side with the other tourist courses already being offered in institutions in the Illawarra. This Government paid for the establishment of those facilities. The honourable member for Fadden sought to compare Qantas with Cathay Pacific in respect of additional routes to Hong Kong and said that the position involved a two for one arrangement. Surely there is nothing wrong with that. The arrangement will improve opportunities for Qantas to fly people on Australia's airline, which we all wish to see prosper. The honourable member also spoke of Qantas protecting its own territory. What happens, for example, in countries such as the United States? Qantas has been endeavouring for years to get into markets in the United States and has been refused entry. It can fly to the West Coast and nowhere else, and the honourable member knows it. As for the other airlines, I agree that there was a modicum of truth in the honourable member's remarks. I support entirely the proposition he put forward that lack of planning, not only by Qantas but by many air carriers throughout the world, has contributed to the problem of getting people in and out of Australia. I also agree that events such as Expo 88, the Bicentenary and so on will contribute to the desire of people to come to this country. But I also make the point, as I think the honourable member will concede, that this upturn in tourism into Australia has been increasing gradually over the last few years. It is not a phenomenon that happened all at once. It has been increasing over a few years because of the fascination of a number of people with Australia as a tourist destination for a variety of reasons. Australia is a safe destination. It has some magnificent scenery and facilities, which people now want to see. I agree with the honourable member that locations around the country such as the Whitsunday Islands, the Gold Coast, central Australia, Sydney, Melbourne and even Canberra-when the new Parliament House is complete Canberra will improve even more as a tourist destination-are all attracting people more and more to this country. We have to facilitate that. I hope that the honourable member and the shadow Minister will talk to their people about the question of Qantas's future. Discussion has been taking place on all sides of the political arena about the future of Qantas regarding privatisation, and whether half of it, some of it, all of it or none of it should be privatised. A view being run at present is that honourable members opposite are looking for 100 per cent dispersal of any equity the Government might have in Qantas. I suggest that that should be looked at very carefully. I hope that the Opposition will support a massive capital injection for Qantas in the future to enable it effectively to upgrade its services and to take advantage of its expanded requirements to fly overseas and to bring people back here. I hope that we get a bipartisan approach to this matter. The honourable member for Gilmore and the honourable member for Fadden talked about the incompetence and lack of leadership of this Minister and this Government in terms of the tourist industry. In 1983, 250,000 people were employed in the tourist industry. In 1987, the figure is 450,000. It is growing all the time. Every place in Australia is looking to tourism to supplement its economic base. My own area of Illawarra and, as the shadow Minister at the table well knows, the Shoalhaven area further south in his electorate are endeavouring to capture the tourist market-the day trippers and the extended stayers. We should be encouraging them to do so. In Wollongong we are seeing a massive expansion in the provision of tourist facilities. We have seen what has happened on the Gold Coast and in the Whitsundays. Proposals for massive development are being put forward in these areas. I agree with the honourable member for Fadden that the entrepreneurs in the tourist industry have to be congratulated. This Government does congratulate them. It provides the incentives through taxation concessions and other measures that encourage them to get involved in the tourist industry and to promote it even further. We need to do that. Australia as a tourist destination is increasing in popularity all the time. It is quite interesting to look at the employment levels in restaurants, hotels and clubs. It is estimated that 214,000 people were employed in those industries in 1985. In 1987, 255,000 are employed. That is despite the claims that were made, which have been revived in debate in this House, that the fringe benefits tax and a range of other incentives were going to decimate completely the restaurant industry. It simply is not so; it is not a fact, and the statistics support that view. A set of statistics which I believe is quite relevant to this debate centres on trying to work out a methodology of comparing the export earnings equivalent of Japanese tourists, for example, coming to Australia with what primary industries contribute to the Australian economy. In 1986-87, a Japanese tourist spent approximately $1,406 per trip in Australia, excluding his air fare. If one uses that as a basis and considers the amount of revenue that is earned by a variety of commodities in Australia some very interesting statistics can be thrown up. If one considers the average export price for wool, sugar, alumina, wheat, coal and iron ore and then takes the figure for how much each Japanese tourist spends in Australia, it can be seen that the rounded result is that there are three tourists for one tonne of wool, one tourist for five tonnes of sugar, one tourist for seven tonnes of alumina, one tourist for 10 tonnes of wheat, one tourist for 25 tonnes of coal-that should interest people in my area-and one tourist for 59 tonnes of iron ore. That is the value to the economy of the tourist influx into this country, which we should be supporting. We were considering the statistics and the contribution that has been made by and the leadership that has been given to the tourist industry by the Minister and by this Government. Some criticism was levelled recently at the Minister leading a tourism investment mission to Japan. It is worth quoting once again what Mr John Haddad, the business group leader who went with the Minister, had to say: The members were impressed by the Minister's involvement in all aspects of their activities, and his availability at all times to support individual member's needs throughout the conference was particularly appreciated. I know that the Mission has created a new level of sophisticated negotiation within the market in Japan which will be of enormous benefit to the future of our expanding tourist industry. We can look forward to the benefits of this Mission well into the future. That is what a man in the business community and the tourist community had to say about this Minister and this Government's approach to tourism activity. We on this side of the House totally reject the form of this matter of public importance. We certainly reject the personal attack that has been levelled on the Minister by those opposite today. We reject the Opposition's criticism out of hand. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The honourable member's time has expired. The debate is concluded. Bill presented by Mr Holding, and read a first time. Mr HOLDING(Melbourne Ports-Minister for Employment Services and Youth Affairs)(3.48) —I move: That the Bill be now read a second time. This Bill seeks to amend the Student Assistance Act 1973, which is the legislative basis for the provision of student assistance under Austudy and for the grant of post-graduate awards. The proposed measures are designed to facilitate the prevention of fraud and the recovery of overpayments under student assistance schemes. The Attorney-General (Mr Lionel Bowen) recently announced the outcome of the Review of Systems for Dealing with Fraud on the Commonwealth. The main thrust of the Review's findings was that agencies affected by fraud should have the principal responsibility for its prevention and detection. It is intended progressively to implement measures to prevent, detect and recover moneys which have been wrongfully paid under programs administered by the Department of Employment, Education and Training. As a first step towards making student assistance schemes less vulnerable and to assist in recovering overpayments, the Government is proposing that the Student Assistance Act be amended to bring it into line with the Social Security Act in matters relating to the gathering of information, and the recovery and write-off and waiver of overpayments in relation to the schemes. It is reasonable and proper that the powers provided to the various Commonwealth authorities for the administration of income support schemes should be similar, to the extent that this is feasible. At present the Department obtains information from educational institutions and Government authorities to verify particulars provided by students in their applications. The proposed new section 31d will give legislative support for such arrangements and will facilitate the acquisition of information to ensure that the income tests are applied correctly and that the funds to support students, which are provided at considerable cost to the community, are directed to those for whom they are intended. Recovery will be strengthened by the introduction of measures similar to those already provided in the Social Security Act, to recover overpayments from money owing to a debtor. The proposed new section 31a will allow overpayments of student assistance, social security or veterans' benefits to be offset against an entitlement under the Student Assistance Act. The Bill will also amend the social security and veterans legislation to extend their recovery provisions in a similar manner. The Bill provides for the maximum penalties under the Student Assistance Act to be increased. At present the maximum penalty for offences under the student assistance legislation is $100. This has little deterrent value for people who might consider attempting to obtain money fraudulently. The maximum penalties as outlined in the proposed new section 31h are to be increased to $2,000 and/or 12 months imprisonment for individuals who make false or misleading statements or otherwise seek to deceive in order to obtain benefits unlawfully. There is a proposed maximum penalty of $10,000 for corporations which refuse to co-operate in arrangements to verify entitlements and to recover payments which should not have been made. The proposed penalties are in line with those prescribed under the Social Security Act. The waiver and write-off powers to be provided in proposed new section 31c are similar to those applying under the Social Security Act. At present, these powers in relation to student assistance schemes are exercised by the Minister for Finance under the Audit Act. It is considered more appropriate that they be exercised by the Minister for Employment, Education and Training as part of the overall responsibility for the administration of student assistance programs. I commend the Bill to the House and present the explanatory memorandum. Mr Tim Fischer —In the presence of students from Walla Walla, I have much pleasure in moving: That the debate be now adjourned. Question resolved in the affirmative. Bill presented by Mr Barry Jones, and read a first time. Mr BARRY JONES(Lalor-Minister for Science and Small Business)(3.52) —I move: That the Bill be now read a second time. This Bill proposes a series of amendments to the principal Customs Act 1901 and Excise Act 1901, the most important of which are the amendments to the valuation provisions of the Customs Act 1901, division 2 of part VIII, and the introduction of consequential enforcement and penalty provisions. Their purpose is to effect the second instalment of the Government's strategy to combat commercial practices designed solely or predominantly to understate the value of imported goods, so as to minimise or avoid customs duty. With respect to the proposed amendments to the valuation provisions of the Customs Act, which are contained in clause 12 of this Bill, honourable members will recall that the Government announced at the second reading stage of the Customs (Valuation) Amendment Bill last sittings that it would be introducing further amendments to the valuation provisions of the Customs Act, to augment the reforms of that first Bill. The focus of the valuation amendments in this Bill is the rearrangement of the various provisions in division 2 of part VIII of the Customs Act into a more logical and easy to follow sequence, and the highlighting of the various types of costs, charges and agreements relating to goods which will be included or excluded for the purposes of assessing the customs value of the goods. There are also some important new provisions and amendments that are designed to combat minimisation and avoidance practices used by some importers in valuing goods for duty purposes. Once again, I should emphasise that the Government is not accusing all importers of engaging in avoidance practices. However, experience has shown that some importers have entered arrangements that are designed solely to reduce assessable customs value and thereby reduce duty liability. The Government is therefore of the view that any opportunity for abuse must be removed as soon as it is discovered. The extent to which minimisation and avoidance practices erode the revenue and existing assistance levels is reflected in the many submissions and complaints received from local manufacturers and producers concerning the commercial advantage which some importers enjoy as a result of their avoidance of correct duty. Investigations and inquiries by the Australian Customs Service into the activities of importers regarding the valuation of imported goods often lead to the imposition of additional duty and/or litigation being commenced by either the Customs Service or the importer. Allow me to demonstrate some known avoidance practices which this Bill will eliminate. The inclusion of inland freight charges in customs value is presently being avoided through the payment of these charges by the purchaser to a third party. Because the vendor invoices the goods to the purchaser at an ex-factory level, the inland freight charges under the current provisions of the Act are not included in the customs value, as only payments from the purchaser to the vendor are presently dutiable. It is important to note that investigations of the Industries Assistance Commission into appropriate levels of industries assistance are based on free on board prices; that is, the price of the goods at the point of exportation. Proposed new section 154 in clause 12 of the Bill extensively redefines `place of export', `foreign inland freight' and `foreign inland insurance' to eliminate the practice of using third party forwarders to avoid duty on inland freight charges. Another area of avoidance is in overseas freight charges. To achieve the correct customs value for duty purposes, particularly on `cost insurance and freight' invoices, the Australian Customs Service must be sure that the actual overseas freight paid or payable is deducted from the invoice price. It is the experience of Customs that freight costs are being manipulated in various ways to decrease the customs value, by overstating freight, or to increase the customs value, by understating freight, in order to avoid dumping duties. There are also practices which indirectly affect the amount of duty paid or payable. The main method here is the payment of rebates by shipping companies to the overseas vendor or to purchasers in Australia. The result is that true duty liability is effectively concealed until after importation, resulting in a substantial loss to revenue. The new definition of overseas freight is designed to give Customs the power to question freight costs shown on invoices and commercial shipping documents to establish the actual freight paid or payable. A third practice which I will mention briefly is the deduction of so-called buying commissions. Buying commission is an allowable deduction from the price if it is genuine. The problem being experienced by Customs in this area is the difficulty in determining what is a true buying commission. The proposed new section 155 in clause 12 of the Bill is designed to specify situations which preclude agents from holding themselves out to be genuine buying agents. It is the intention of this legislation to eliminate these practices, and others, which have provided opportunities for avoidance of duty through the minimisation of the value of imported goods. An integral part of these reforms which was foreshadowed last sittings is the inclusion of appropriate information gathering and auditing powers for Customs, to verify information supplied to it, together with new and tougher sanctions for the provision of false or misleading information. Proposed new section 159 in clause 12 imposes a clear responsibility on persons entering goods which are required to be valued to estimate the customs value of the goods, and to provide details on how the value was determined. If Customs is not satisfied with the assessment or supporting information it can seek additional information or undertake an audit of the transaction. The focus on self-assessment for customs duty purposes was begun in 1985, when the Customs Service introduced streamlined procedures for the entry and clearance of imported goods. These procedures now result in almost 90 per cent of cargo arriving in Australia by either air or sea being cleared from Customs control within four hours of the entry being lodged with Customs. In many instances the cargo is still being discharged from the aircraft or ship. Further enhancements to the computer system and procedures are planned or being developed, and it is anticipated that in approximately two years the process will be fully automated. The streamlined procedures provide for the balance-some 10 per cent-of the import transactions to come under close scrutiny. The transactions are selected using `risk assessment techniques' and `profiles'. This process, similar to that used by the Australian Taxation Office, will require Customs audit officers to visit importers and closely study commercial documents relevant to the import transaction, to ensure that the goods have been correctly valued for customs purposes and the appropriate duty paid. Clause 22 includes a new power for Customs officers to enter premises on which commercial documents relating to information that was supplied to Customs for purposes connected with the entry of goods are kept, to inspect, examine and so on those documents, for the purposes of verifying that information. Clause 25 introduces a new requirement for importers to keep the commercial documents relating to the goods which they have imported for a period of five years. The Government believes both these new provisions will enable the auditing process which I have outlined to be carried out effectively. The Bill also provides in clause 26 for automatic penalties to be imposed in instances where duty evasion has been detected. These provisions, which again are similar to those in taxation legislation, will be used in lieu of the seizure of goods and the costly and protracted litigation which inevitably follows such actions. Financial Impact Statement The financial impact of the valuation amendments contained in this Bill is considerable. While it cannot be quantified to any exact degree, I will endeavour to show by example that the loss to the revenue by use of such practices cannot be ignored. In regard to third party inland freight agreements, if the motor vehicle industry of one exporting country changed to ex-factory contracts, and its Australian purchasers employed third party forwarders, the loss of duty receipts would conservatively amount to $5.2m in one year, seriously affecting the local motor vehicle industry. Exact quantification of duty shortfall caused by manipulation of overseas freight charges cannot be achieved, due to the various methods employed to manipulate freight amounts. Rebates given by shipping companies to preferred customers are the most common cause of duty shortfall but, because the practice is widespread and most often occurs overseas, it can only be said that the loss to the revenue could amount to many millions of dollars per annum. I do not know whether the Minister for Trade Negotiations (Mr Duffy) wishes to comment on this. Mr Duffy —I will leave it until later. Mr BARRY JONES —By claiming a deduction for a buying agent's commission where the agent is related to the vendor, it was estimated early this year, one major importer had saved about $4m customs duty in a year. If all the major importers adopted the practice, there would be a revenue loss of $90m per annum. The new section 155 proposed in clause 12 lists various things that a genuine buying agent cannot do, and it is estimated that this provision will eliminate many commissions currently being deducted from customs value as buying commissions under the current provisions. I repeat the statement I made on the Customs (Valuation) Amendment Bill in the last sittings, that the effect of these practices on local industry has not been quantified, but it is obvious that any erosion of assistance levels by avoidance and minimisation practices can only be detrimental to local industry and employment. These measures are designed to remove this erosion and restore a stable valuation base. I commend the Bill to the House and present the explanatory memorandum to the Bill. Debate (on motion by Mr Tim Fischer) adjourned. (No. 2) 1987 Bill presented by Mr Barry Jones, and read a first time. Mr BARRY JONES(Lalor-Minister for Science and Small Business)(4.03) —I move: That the Bill be now read a second time. This Bill proposes amendments to the Excise Tariff Act 1921, principally to incorporate into that Act various excise tariff proposals tabled in this Parliament during the last sittings and early in the current sittings, and to give effect to changes to the excise arrangements for crude oil that follow from the Government's decision to deregulate crude oil marketing with effect from 1 January 1988. The proposed deregulation arrangements contained in clauses 8 to 10 inclusive of the Bill amend the Excise Tariff Act to change the basis of calculating the excise due on the production of crude oil from Bass Strait from one based on the import parity price to one based on the volume weighted average prices realised for crude oil sales by the Bass Strait producers, as determined according to the provisions of the Petroleum Excise (Prices) Bill 1987, of which my colleague the Minister for Primary Industries and Energy (Mr Kerin) has carriage. On 21 June the then Minister for Resources and Energy, now Minister for Transport and Communications (Senator Gareth Evans), announced the Government's decision to deregulate completely crude oil marketing with effect from 1 January 1988. This will permit refiners and all crude oil producers to negotiate freely the quantities and prices of crude oil they buy and sell without government involvement. The Government believes that moving to a free market for crude oil will optimise Australia's future crude oil self-sufficiency consistent with the efficient allocation of resources. This move will enable the Australian crude oil industry to develop strongly in future for the benefit of the Australian community. From 1 January 1988 the Government will no longer determine import parity prices (IPPs) as the basis for transactions of domestic crude oil and the determination of excise. Clause 8 of this Bill provides for excise to be determined on the basis of volume weighted average of realised prices for sales of Bass Strait crude oil, known as the `volware' price. These prices will be determined each month by the Minister for Primary Industries and Energy under the provisions of the Petroleum Excise (Prices) Bill. The initial excise liabilities of the crude oil producers for each month will be calculated on the basis of reference prices notified to the producers and the Australian Customs Service. These prices will be based on recent volware prices and other factors such as movements in world oil market prices for crude oil and changes in exchange rates. Interim volware prices for the month will also be calculated on the basis of sales information provided by the producers and notified during the following month. The producers' initial excise liabilities will be adjusted from those calculated using the reference price, and thereafter interim prices will form the basis of excise liability until final volware prices are determined. The provisions of this Bill introduce arrangements which will allow adjustments to be made to the producers' crude oil excise liability which result from using reference, interim and final volware prices. These arrangements will mean that the adjustments to the producers' excise liabilities will be affected automatically following the determination of the volware prices, and thereby avoid the situation whereby excise liability could have remained outstanding for long periods. The import parity price adjustments, at clauses 13, 15 and 16 of the Bill, continue the Government's policy since 1 March 1986 to offset fully changes in revenue from crude oil excise and royalty by across the board changes in excises payable on petroleum products. The net result of this policy is that as crude oil prices change government revenues remain the same overall and petrol price changes are kept to a minimum. On 1 May 1987, the IPPs of indigenous crude oils were decreased to reflect an appreciation of the Australian dollar against the United States dollar, and the excise rates on refined petroleum products were correspondingly increased with effect from 16 May 1987, as in clause 13. On 1 July 1987 and 1 August 1987 the IPPs of indigenous crude oils were increased to reflect upward movements in world oil prices and, consistent with the Government's policy, the excise rates on refined petroleum products were reduced with effect from 18 July 1987, as in clause 15, and 15 August 1987, as in clause 16, respectively. Clauses 6, 8 and 14 of the Bill give effect to the Government's decisions, following its review of new petroleum taxation arrangements, to remove distortions and disincentives to petroleum exploration and development in Australia. The review follows the Government's undertaking at the time of the Energy 2000 Conference in September 1986, where the oil industry pressed strongly for the removal of all secondary taxation on petroleum production, arguing that the existing taxation regime was making Australia an unattractive place in which to invest in exploration and development. The Government's review established that some changes to the existing arrangements are necessary, given the reduction in the level of world crude oil prices and continuing uncertainty in their future levels, to ensure that Australia can continue to attract oil exploration and development investment. The package of concessions will apply to both existing crude oil production and new projects where excise and royalty apply-namely, Bass Strait, North West Shelf and on-shore areas. Elsewhere off-shore, the resource rent tax regime announced in 1984 will continue to apply. The key elements in the new excise package are as follows: confirmation that the maximum rate of `old' oil excise will not be restored to 87 per cent of the import parity price and that there will be a progressive lowering of the top marginal rate of excise on such oil from 80 per cent to 75 per cent over the next three years; exemption from excise of the first 30 million barrels of crude oil production from new off-shore projects where excise and royalty apply; exemption from excise of the first 30 million barrels of crude oil produced from on-shore fields; exemption from excise of condensate marketed separately from crude oil; and exemption from excise of liquefied petroleum gas (LPG) produced on-shore. Clause 14 of the Bill also includes an increase in the excise duty rate on aviation gasolene. This follows extensive consultation with the general aviation industry on the most appropriate cost recovery and charging arrangements to apply in 1987-88, and the Government's decision to adopt a suggestion made by the industry to place a surcharge on aviation gasolene-avgas-fuel excise. Mr Peter Morris —Avgas. Mr BARRY JONES —Nobody knows more about avgas than the Minister for Resources. This proposal, which sets the surcharge at 3.9c a litre, has the full support of all the major general aviation organisations. Mr Lee —He has his pilots licence now. Mr BARRY JONES —Yes, he will have to declare an interest. The surcharge replaces the previous fixed annual air navigation charges which had been payable by general aviation aircraft. In addition to the surcharge, general aviation avgas aircraft will pay landing charges at the major airports scheduled for transfer to the Federal Airports Corporation. General aviation aircraft using aviation kerosene-avtur-will pay landing charges for all operations on the same basis as airline aircraft. The final major inclusion in this Bill, at clause 5, effects a change to the operation of section 6a of the Act, relating to the automatic indexation of rates of duty. Presently the Act provides for rates of duty to be adjusted on 1 February and 1 August in accordance with movements in the consumer price index. This is dependent, however, on the Australian Statistician publishing the index number at least seven days before these dates. If this does not occur, which has been the majority of cases, the new rate is determined by Commonwealth of Australia Gazette notice. Uncertainty concerning the commencement date of the new rates is causing undue disruption to business involved with implementing the new rates. To simplify procedures the proposed amendment will provide that in cases where the Australian Statistician does not publish the index number at least five days before 1 February or 1 August, the new rates will take effect five days after the Australian Statistician publishes the index number. Financial Impact Statement (A) DEREGULATION OF CRUDE OIL MARKETING ARRANGEMENTS (CLAUSES 8-10 INCLUSIVE) The financial impact on crude oil excise receipts resulting from the proposed arrangements for the deregulated or a free market for crude oil will depend on the extent to which crude oil prices vary after deregulation. In the current international climate and in a deregulated market, average Bass Strait crude oil prices could be expected to fall between $A1 and $A4 a barrel from what they would have been under import parity pricing. On the basis of a price fall of $A2.50 per barrel, the drop in Government revenue in 1987-88 and 1988-89 is expected to be about $100m and $168m respectively. There will be no offsetting product excise adjustment to recoup revenue forgone by the Government as a result of any drop in crude oil prices following deregulation. (B) IMPORT PARITY PRICE ADJUSTMENTS (CLAUSES 13, 15 AND 16 (b to g)) The increase in refined petroleum product excise rates due to the changes in the import parity prices effective from 16 May 1987 is expected to result in an increase in revenue of about $20m in 1986-87. The decrease in refined petroleum product excise rates effective from 1 July 1987 and 1 August 1987 is expected to result in decreases in revenue of about $7.2m and $82.7m respectively in 1987-88. The changes in the excise rates following changes to the import parity prices exactly offset the forecast changes in revenue from crude oil excise and royalty. (C) NEW PETROLEUM TAXATION ARRANGEMENTS (OFF-SHORE AND ON-SHORE) (CLAUSES 6, 8 AND 14 (b to d)) The introduction of the new excise concessions on crude oil and LPG from 1 July 1987 are forecast to reduce Commonwealth and State government revenues by $18m in 1987-88 and by $297m in the five years to 1991-92. Higher production levels as a result of the new concessions will generate additional excise and royalty receipts which are expected to more than compensate for the cost of the concessions based on previous production forecasts by the producers. In 1987-88, the Commonwealth is forecast to receive an additional $670m, and in the five years ending 1991-92 the higher production levels will generate an additional $3.2 billion in excise and royalty collections for the Commonwealth and State governments. Mrs Kelly —Wow! Mr BARRY JONES —If the honourable member gets her hands on it there will not be much left. Mr DEPUTY SPEAKER(Mr Mildren) —Order! Mr BARRY JONES —I shall continue: (D) AVIATION GASOLENE SURCHARGE (CLAUSE 14 (a)) It is estimated that the surcharge will raise around $3.9m in 1987-88. (E) AUTOMATIC INDEXATION CHANGES (CLAUSE 5) The amendments proposed by this clause have no direct financial implications. I commend the Bill to the House and present the explanatory memorandum to the Bill. Debate (on motion by Mr Connolly) adjourned. Bill presented by Mr Peter Morris, and read a first time. Mr PETER MORRIS(Shortland-Minister for Resources and Acting Minister for Primary Industries and Energy)(4.17) —I move: That the Bill be now read a second time. The principal purpose of this Bill is to provide for using the volume weighted average price for sales of Bass Strait crude oil as the price basis for levying excise on crude oil produced from the Bass Strait from 1 January 1988, the date on which Australia's crude oil market will be deregulated. This Bill should be read in conjunction with the Excise Tariff Amendment Bill 1987 which is within the portfolio of the Minister for Industry, Technology and Commerce (Senator Button). The introduction of this Bill and other associated legislative amendments is an essential step in implementing the Government's decision to deregulate crude oil marketing in Australia with effect from 1 January 1988. Deregulation will permit all of the Australia's crude oil producers and refiners to negotiate freely the quantities and prices of crude oil they buy and sell without government involvement. The Government believes that this freeing of the crude oil market will optimise Australia's future crude oil self-sufficiency consistent with the efficient allocation of resources. The deregulation decision means that the allocation scheme for crude oil and import parity pricing will be abolished, and the Bass Strait coastal freight adjustment scheme, used to compensate refiners remote from Bass Strait for their higher costs of transporting allocated crude, will then be terminated. Except in times of emergency and subject to other relevant policies, such as the prohibition of exports to South Africa, Australia's crude oil producers will have complete freedom to export as an alternative to selling on the domestic market and refiners will have the freedom to import crude oil. This decision followed a six-month review of the present import parity pricing and market allocation arrangements. The review took into account the views of State governments, producers and refiners, trade unions and consumers. It also looked closely at the impact of a free market on crude oil and product prices, government revenues and the balance of payments. It was concluded that, in the light of changed circumstances in the overall marketing environment, the benefits of deregulation would now outweigh the costs. The changes included a substantial decline in world oil prices, substantial changes in the Australian exchange rate and balance of payments situation and, above all else, the start of the long anticipated decline in Bass Strait production which, in the absence of major new discoveries, will mean a steady rise in the volume of imported crude oil. The financial impact of moving to a free market for crude oil will depend on the extent to which crude oil prices fall after deregulation. In a deregulated market, average Bass Strait crude oil prices could be expected initially to fall between $A1 and $A4 from what they would have been under import parity pricing. A price fall in the middle of this range of, say, $A2.50 per barrel would result, when passed through to the consumer, in petrol prices falling by around 1.3c per litre. Although this could mean a drop in Government revenue from the crude oil excise of about $100m in 1987-88 and $168m in 1988-89 the Government is committed to not offsetting this reduced revenue by compensating adjustments to petroleum product excise, so that the full benefit of any crude oil price reductions is passed on to the consumer. This potential drop in revenue was, of course, taken into account as part of the Budget considerations. In reaching the decision to deregulate the crude oil market the Government considered the previously expressed concerns of the parties affected. Small producers, with production of less than 5,000 barrels per day, were concerned that they would be disadvantaged after deregulation because of their small production volumes, remoteness from infrastructure and lack of marketing skills. It was decided that the best way of providing support for the existing small producers was to obtain assurances from refiners that they will continue to lift the output of small producers in a timely manner and at fair market prices. Responses have been given by refiners that indicate these conditions will be met. In addition, small producers will now have options other than to sell to refiners. These will include selling to large producers and pipeline owners or having them act as marketing agents, using the services of commodity brokers or trading companies, or exporting their oil. Indeed all producers, small or large, may well find opportunities in a free market which were not available or considered in a regulated market. Assurances have also been obtained from refiners that deregulation would not result in the closure of any Australian refinery and refiners will maintain their existing arrangements for Australian flag shipping, albeit with some changes to shipping patterns. Although it is not possible to be sure of the balance of payments effects of deregulation in advance, it is likely that the net effect on the value of imports of crude oil is likely to be either neutral or positive. Major refineries have argued that deregulation will give Australian refiners access to different grades of imported crude oil suitable for their technologically advanced refineries at prices significantly below current domestic rates. Consequently, some higher quality Australian crude oil will be exported, but this should be at higher prices than the imports, resulting in a net balance of payments gain. Other opportunities that oil industry analysts have identified as potentially flowing from deregulation are in the export of refined products based on Australia's sophisticated refineries and excellent local gasoline feedstock. Also deregulation could open the way for further foreign investment in Australian oil exploration and development. As part of moving to the free market and at the same time maintaining the flow of revenue to the Commonwealth, an excise system for crude oil based on prices achieved in the free market is required rather than one based on the Government imposed import parity price. This will ensure that the final price base for excise will not be higher than the average prices received by the procedures. The crude oil excise rates will be unchanged from those currently in force. This Bill sets out the system of calculating those prices. It is directed towards oil production from the Bass Strait as this is currently the only production area producing excisable oil. Production from areas on-shore will become excisable in the event that production exceeds the 30 million barrel excise-free threshold. The price basis for excising such on-shore oil production will be considered at the appropriate time. The basic principle of the proposed new crude oil excise system is that excise will be levied on crude oil from Bass Strait using the volume weighted average of realised f.o.b. prices of all sales in a calendar month-referred to in the Bill as `volware' prices. The basis for volware prices will be the realised price of oil at the point of entry for home consumption. This is the price of the oil as it is loaded on a ship at Long Island Point and Crib Point. For pipeline transactions, it will be the realised pipe inlet prices at Long Island Point. The price will be based on payment within 15 days, with an allowance for extended credit terms in excess of 15 days. Where the contracts for the sale of oil include shipping costs incurred after the point of entry for home consumption and to be borne by the producer, those shipping costs attributable to actual shipments will be deductible from the contract price. They will include freight, insurance, wharfage and other port charges at the port of destination, demurrage at the delivery end which falls to the producer under a c.i.f. contract and is clearly not caused by the producer, lightering at the port of destination, cargo inspection costs, heating of the cargo on the ship and bunkers. The Bill makes provision for the determination of three prices for each month of sales. The first, the reference price, will be an estimate of the volware price made before the beginning of the month in question and will be used to calculate the producer's initial excise liability and payments for that month. This price will be based on the most recent interim volware price that has been set, and adjusted for other appropriate factors such as movements in world market prices for crude oil and changes in $A-$US exchange rate. The second, the interim volware price, will be calculated not later than one month after the end of the month in which the oil is sold, based on information provided by the producers about their sales in the month. Once determined, it will replace the reference price as the basis for excise calculations. Third, as some of that information may still be provisional, after six months, or earlier if final information is available, a final volware price for the month will be determined. Once determined, this final volware price will replace the interim volware price and will be the basis of the producers' final excise liability. The method of calculating the transaction prices for use in establishing volware prices will be set out in regulations. Each of these prices will be notified to the producers and the Australian Customs Service, and the producers' excise liabilities will be adjusted as appropriate in subsequent excise payments. Because of their commercial sensitivity the prices will not be published. As a result of the progressive adjustments to the producers' excise liabilities and payments following the determinations of volware prices, there should not be substantial amounts of excise rebates or additional excise liability outstanding for long periods of time. The Bill contains provisions requiring the producers to provide the Department of Primary Industries and Energy with the information required to calculate these prices within a time limit to be specified in the Commonwealth of Australia Gazette. There are also provisions for auditing of the information. Basing the excise on an average price gives the producers an incentive to maximise the price they receive above the average and therefore to reduce their effective excise rate. However, the Bill also has provisions to give Ministers the power to determine the price for any sale when any part of the sales transaction is considered not to be at `arm's length' and a price has been arranged which would reduce the revenue due. This Bill provides for an effective and equitable system of collecting excise on crude oil production. It is a major component in the implementation of the Government's decision to deregulate the Australian crude oil market. I present the explanatory memorandum to this Bill, and commend the Bill to honourable members. Debate (on motion by Mr Connolly) adjourned. Bill presented by Mrs Kelly, and read a first time. Mrs KELLY(Canberra-Minister for Defence Science and Personnel)(4.28) —I move: That the Bill be now read a second time. The Williamstown Dockyard Employees Bill should be seen as part of the implementation of a series of decisions involving defence shipbuilding activities which the Minister for Defence (Mr Beazley) announced on 1 April this year. In that statement, he said: . . . the Government has decided to offer for sale to commercial organisations a controlling interest in (Williamstown) Dockyard. The rationale for this decision was that, notwithstanding substantial improvements, the dockyard's performance has continued to fall short of its own commitments and even further behind what might be expected from comparable yards. Operating under public sector constraints, Williamstown Dockyard is not well structured to remedy these deficiencies and to compete for the full prime contractor role for the new surface combatant or even project Anzac. Two consortia are on the short list of tenderers to buy the dockyard. They are the Australian Marine Engineering Corporation, a consortium comprising Australian Shipbuilding Industries (ASI) of Western Australia, Eglo Engineering of South Australia, ICAL of New South Wales and Thorn EMI: and Williamstown Dockyard Consortium, a consortium consisting of Tecnav Pty Ltd-a group of employees at Williamstown Dockyard-Byvest Pty Ltd, a management buyout consultancy firm and McConnell-Dowell, a New Zealand based subsidiary of Inter Pacific Ltd. Following the evaluation of their bids, the Government will decide which of them is to become the new owner of Williamstown Dockyard. This will be the most significant sale of Commonwealth assets so far undertaken in Australia. It will be significant because it will bring about a major restructuring of defence shipbuilding industry and it will have long term benefits for the Defence budget. The new owner of Williamstown Dockyard will take over the task of completing the two FFG7 class frigates that are being built there. They are planned for delivery in 1991 and 1993. With the four FFGs that were built in the United States of America, and the guided missile destroyers, they will form the first level of capability that was mentioned in the defence White Paper which the Minister tabled in March this year as able to contribute to a wide range of operations in both low level and more substantial contingencies. In the same White Paper, the Minister discussed a second level of capability and the proposal for a new class of vessel-a light patrol frigate or as it is now known, the Anzac ship-to meet this requirement. This program of 12 ships is a collaborative one between Australia and New Zealand. It is expected that it will give rise to a resurgence in warship building in Australia and, like the submarine project, provide a continuing work load to Australian industry for many years to come. These two multi-billion dollar projects demonstrate the Government's resolve to support local industry and to bring new technologies to Australia. Expressions of interest have been called for both the design of the Anzac ship and for the role of the prime contractor for the construction of the ships. The Government's strategy is to have the overseas ship designers join Australian consortia in tendering for the construction of these new ships. The Minister hopes to be in a position to announce the name of the new owner of Williamstown Dockyard and the tenderers for the prime contractor role in the near future. The Anzac ship project represents the largest shipbuilding program undertaken in Australia since World War II. It demonstrates this Government's commitment to the defence of Australia and its willingness to make the decisions necessary to implement the commitment. Williamstown Dockyard's work force of some 1,600 are employed under both the Public Service Act and the Naval Defence Act. Neither of these Acts makes provision for mobility between public and private employment. This Bill recognises that there is continuity of employment in this case. It is designed to facilitate the handover of the dockyard to the new owner without the absurdity of making employees eligible for large redundancy payments where there is continuity of employment. This could result in savings to the Commonwealth of between $4m and $13m, dependent on the number of employees involved. There has been an exhaustive program of consultation with the unions and staff associations at Williamstown Dockyard under the aegis of the Australian Council of Trade Unions (ACTU). The Bill before the House enshrines the agreements reached between the Department of Defence and the Department of Industrial Relations, the Public Service Commission and the ACTU and dockyard unions. I present the explanatory memorandum to this Bill. Debate (on motion by Mr Connolly) adjourned. [COGNATE BILL: HEALTH LEGISLATION AMENDMENT BILL (No. 2) 1987] Debate resumed. Mr DEPUTY SPEAKER(Mr Mildren) —Before the debate is resumed on this Bill, I remind the House that it has been agreed that a general debate be allowed covering the Bill and the Health Legislation Amendment Bill (No. 2) 1987. Mr TUCKEY(O'Connor)(4.34) —Prior to the lunch break I was bemoaning in this debate on the Social Security and Veterans' Entitlements Amendment Bill (No. 2) and the Health Legislation Amendment Bill (No. 2) the Government's inability to come up with more of the right sorts of approaches to the health problems of Australians. These pieces of legislation deal with pharmaceutical benefits in particular, and extend the rights to pharmaceutical benefits in certain circumstances. I was pointing out some of the areas where the reverse has applied and particularly to the area of appropriate assistance for people suffering from skin cancer and some of the associated precursors of cancers, treatments for which have recently been struck off the Medicare benefits schedule. I think this is a very tragic move that we will regret as time goes by. It is only evidence of a government which is now deeply concerned about the cost of its universal health scheme and which is discovering the problems associated with that, particularly in the delivery of pharmaceutical benefits. The Government is also finding other problems in its delivery system, such as the number of people who are unable to get into public hospitals and the rapidly escalating cost of private hospital cover as a consequence of the shift to public hospitals and the drop in bed occupancy rates in private hospitals. All this will require considerable consideration in the future. I can assure the Australian people that the Opposition parties will not leave the system in its present state. The Health Legislation Amendment Bill (No. 2) makes three basic moves. Firstly, it addresses a problem that has arisen for people who were originally categorised as class A widows. These were people who received a widows' pension when in fact a number of them were not exactly widows as we would understand it-people who have had a spouse die-but were the subject of a marriage breakdown and things of that nature. The Government decided to move these people on to unemployment benefit instead of a widows' pension. In that process it discovered that free pharmaceutical benefits were no longer available under that arrangement. In fact, they were available only at the concessional rate. This legislation seeks to correct that for the time being-and I stress `for the time being'. The legislation extends the privilege of free pharmaceutical benefits only to persons who qualify or who did qualify as widows, but who are now on unemployment benefits and women with full time dependent students in the 16 to 24 years age group. The problem is that apparently on 31 December 1988 this arrangement will be considered complete, and these people on widows' pensions from then on will be expected to carry on as strictly unemployed people. The Minister for Veterans' Affairs (Mr Humphreys) may have some remarks to make on that, but that is the best interpretation I can make from the documents such as the second reading speech and the explanatory memorandum. I hope that in that time these people will be able to adjust. The honourable member for Bradfield (Mr Connolly) raised some questions about their ability to cope under these new circumstances. The second point deals with the search arrangements. The Government has now quite wisely decided that there are better ways of treating 16- and 17-year-olds than keeping them on unemployment benefit. Part of those arrangements is to grant a job search allowance, which can range from $25 to $50, depending on a parental means test. This legislation also extends concessional and free pharmaceutical benefits to people in that category, the difference being, as I understand it, that if a person who is otherwise eligible for the job search allowance becomes sick, instead of being placed on a sickness benefit he will remain on the job search benefit but will have the pharmaceutical benefits extended to him as a free concession compared to the $2.50 concessional rate. Steps are also taken to adjust the entitlements of people who are considered to be disadvantaged in our community-frequently working people who have an income which is insufficient to sustain them, particularly if they have a family. The Opposition welcomes the family allowance supplement, but reminds the House that the original family income supplement scheme was a child of a previous Fraser government, which also identified the fact that working people in particular could be in severe financial difficulties, and in fact could be better off on unemployment relief. That would be a tragedy in our society and steps have been taken to avoid that. We welcome the Government's move to add concessions there, and naturally we are pleased to see that pharmaceutical benefit concessions will also be made available to these people on the same formula arrangements as would otherwise apply, namely, that their income must be less than that calculated on a formula using the unemployment cut-out rate, which is $237 for a family, plus $20, plus $34 for each child. The rate for single persons is 60 per cent of that figure. We must remember that many of the problems now confronting Australia regarding the poverty of young children are very much a consequence of other efforts that we have made to try to assist the community. They have not all been successful. Unfortunately, I blame a lot of the poverty of young children today on our attempts to help single parents and others. Probably in a number of cases the assistance of government has contributed to people deciding to break up their homes and the great losers have been children. It does not matter what our feelings are about the rights of people to walk away from a marriage. It is a tragedy for young children and I am deeply concerned about every aspect of that matter. I just hope that we will all agree in the end that we cannot fix the problem with money. We certainly cannot leave young people in poverty. It seems an ever- increasing problem. I remind the House that the first year when the supporting parent's benefit was introduced it cost some $40.6m in 1975 dollars and today it is costing some $1,300m plus. On information provided to me that figure is only half of what the amount really is because the figure would be nearly double if we added in widow's pensions. It is a huge amount of money. It is not only the cost but also evidence of the tragedy in our society. Since Australia decided to be more generous in that area children, the product of that arrangement, are the ones in real poverty. Previously this matter was a family responsibility and the family seemed to be able to contain the problem somewhat and the beneficiaries were the children. That concludes my remarks on this legislation. I refer to the Social Security and Veterans' Entitlements Amendment Bill (No. 2), which is being debated cognately. In particular I give very strong support to the amendment of the honourable member for Bradfield in which he raises the question of whether we should continue with our discriminatory treatment of pensioners and others and continue to allow the Department a discretion. Under the hardship provisions of the legislation-honourable members should remember that this is an omnibus-type arrangement-2.5 per cent income will be deemed to have been earned from all property irrespective of the circumstances. That will be a tragedy for many people, particularly people in rural areas. This tragedy is certainly not confined to people in rural areas. The previous arrangements, whereby the Department and the Minister could exercise discretion, were much more satisfactory. We have to be reminded that in this legislation the assets test for pensions is now extended to the unemployed. Fundamentally, I do not object to that particularly in the circumstances. If I have any bias in life it will be towards the elderly. The Government was first going to deem that an income of 10 per cent had been earned from assets. Of course, that was ridiculous and it demonstrated the Government's complete lack of knowledge of the sorts of returns one might get from even a developed and highly producing property. The 2.5 per cent is probably a more realistic figure but there are many circumstances in which it is irrelevant. The only way one can prove that point is to go before the Department or the Administrative Appeals Tribunal and prove one's case. One cannot have a formula that is as solid and as inflexible as this new arrangement. Consequently, the Opposition has criticised it in its amendment. In my electorate as many as three mature generations and some young children are dependent on one farming property. Unfortunately, many of those farming properties are not very large any more. Before they were sub-divided many years ago they were large enough but as they have been handed down from father to son or to other members of the family they are no longer sufficient to maintain, for instance, three families. The most elderly have to go on the pension. Unfortunately, it has also been found that in nearly every one of such cases the title deeds of the property are in the name of the most elderly. There is a good reason for that. They would quite willingly pass the property free of charge to younger members of their family who are now gaining a living on it. If they were not gaining a living from it they would very likely be receiving the unemployment benefit or some other benefit. This is not done because State governments demands for revenue have increased. Transfer fees and stamp duty on property are such that most people cannot afford to pay them out of their ordinary revenue. Of course, such fees are not so expensive when the owner dies. Property can be transferred much more cheaply. Consequently, farming families are forced to wait until that unfortunate event occurs. Many properties cannot support people, particularly in recent times with the rural downturn. These people have been enjoying a pension just the same as many other people in our society who have made a contribution during their working life. However, they are now being told that they are deemed to be earning 2 1/2 per cent of the valuation of their property. That represents another problem because on many occasions the valuations in no way reflect the valuations the Department uses or the types of cash sale values that could be got for those assets. By this means the Government will not be putting an elderly couple into a position in which they will have to sell a property. Under this change to the legislation, a change to the rules, there will be wholesale reviews of the situation. By doing this we will encounter many problems because not just one elderly family will be affected. I can give examples where up to three families will be affected by the one circumstance. All of these matters were taken into account previously and it is our argument that this should continue. We beg the Government to reconsider this issue. We know that it has lost a few cases in the Administrative Appeals Tribunal and I presume that it has lost them on their merits. Many of us have been involved with constituent matters in this area and we and the Administrative Appeals Tribunal know the just and unjust claims. They become pretty obvious. We are only standing up for fairness in our community and this Government frequently makes claims to be doing that. The situation gets even more ridiculous. Recently I wrote to the Minister-I hope he will use the discretion which I think he still has-on behalf of another of my constituents. For the reasons I have just given, a father and son had an agreement to transfer a property in 1977 but because of the huge burden of stamp duty they merely stamped the agreement-and I add that that cost them $2,465. They stamped the agreement in 1977 when there was not a whisper of assets testing. There could be no suggestion that in some way they conspired to defeat the assets test. Because they never got to a point at which they were able to transfer that property until the advent of the assets test, the bureaucracy is arguing that the elderly person involved is not only no longer entitled to a pension but also has been getting a pension dishonestly. That is a ridiculous situation. There was no doubt about the intent of the transfer in 1977 or of the eventual disposal of the loan in 1984. All action was taken well before the assets test was introduced and yet there is that sort of difficulty. This situation will be compounded because of the total inflexibility in this area. It is a tragedy and I really hope that the Government will reconsider this point. When the 2 1/2 per cent figure was used as a guideline this measure was quite adequate. That was the rule of thumb that was applied and it could be checked. But where people had a reasonable case they had the opportunity to appeal and to get fair treatment through the Administrative Appeals Tribunal and other tribunals and that was an excellent arrangement. It allowed people a second chance to get fair treatment and it allowed people to stay on farming properties. The situation is quite ridiculous. People living on 150 acres in a part of my electorate were obliged to move out of a family home that they had occupied for 70 years. They had to buy a house in a town, put money in the bank and then they got their pension back. That exercise did not prove very much but it is a classic example of how, when one makes rules that are too inflexible, the Government is unable to take notice. Mr DEPUTY SPEAKER(Mr Mildren) —Order! The honourable member's time has expired. Mr LEE(Dobell)(4.50) —I wish to confine most of my comments to the Social Security and Veterans' Entitlements Amendment Bill (No. 2). Firstly, I wish to devote a few minutes to the implications of this legislation for Australia's veteran community. Shortly after the election I was contacted at my local electorate office at Wyong by several members of The Entrance Totally and Permanently Incapacitated Association who were very concerned about the implications of a recent judgment of the Federal Court of Australia on the rights of the totally and permanently incapacitated (TPI) veterans to continue to receive that compensation after they had reached the age of 65. In addition I was contacted by the Hunter Valley and Central Coast sub-branch of the Vietnam Veterans Association, which, of course, does not have members over the age of 65, but which nevertheless has a significant interest in this Federal Court judgment. In the first sitting week of this Parliament I addressed a question to the Minister for Veterans' Affairs (Mr Humphreys), who, in his answer, publicly advised the House that this Government would introduce legislation to overturn the Federal Court judgment which had placed TPI pensions for those over the age of 65 at risk. The Minister has already developed an excellent reputation for consulting the veteran community. He had detailed discussions with the national TPI Association and as a result of that he was able to convince Cabinet that it should introduce legislation to overturn that Federal Court judgment. The honourable member for Farrer (Mr Tim Fischer) has made some comments in the debate today, expressing some concern about the interpretation of parts of this legislation. In fact, the Minister for Veterans' Affairs has today received a letter from Mr Ian Gollings, the National Secretary of the Returned Services League of Australia (RSL), expressing a concern about the amendments contained in the Bill. The Minister for Veterans' Affairs has asked me to make a few comments in reply on his behalf. The concern is caused by the new paragraph 24a (c), which it is thought will introduce a new concept not previously contained in the Veterans' Entitlements Act-that is, the words `is capable of undertaking remunerative work'. However, those words do appear in the existing legislation in section 24 (1) (b). Mr Gollings expressed the RSL's concern that there is no guidance in the legislation as to what constitutes `remunerative work'. Section 28 of the Veterans' Entitlements Act specifically deals with the criteria to be used in assessing capacity to undertake remunerative work. There is clear guidance in that section. In addition, clause 67 of this Bill makes a minor amendment to section 28 to ensure that the criteria specified in that section also apply to the new section 24a about which the RSL is concerned. On page 84 of the explanatory memorandum is an explanation of this amendment to section 28. On behalf of the Minister, I assure the RSL and the Parliament that the Government is not introducing a new surreptitious measure to reassess all these pensioners. The sole intention of the amendments is to overcome the undesirable outcome of the Federal Court decision in the McGuire case, which was that a TPI pension may not be payable for the life of the veteran. The amendments restore the situation to what it was before that decision. Finally, the RSL is concerned that the amendments do not include all applications for intermediate and TPI pensions in the determining system pipeline at the moment. This is not the case. The Minister has advised me that the purpose of backdating these amendments to the commencement of the Veterans' Entitlements Act-that is, 22 May 1986-is to ensure that all such applications are covered. Any cases that are still in the determining system and that were lodged with the Department before the commencement of the Veterans' Entitlements Act are, in effect, brought under the Act by section 17 of the Veterans' Entitlements (Transitional Provisions and Consequential Amendments) Act 1986. The honourable member for Farrer has requested an assurance from the Minister that the distinction between the existing section 24 of the Veterans' Entitlements Act, which is expressed in the positive sense, and the new section 24a, which is expressed in the negative sense, will not change the way in which these provisions are applied. Section 24 is a test as to whether certain criteria apply to a veteran. The new section 24a is a test whether the criteria do not apply. On behalf of the Minister for Veterans' Affairs, I assure the honourable member that this will not change the way in which these provisions apply. Returning to my own personal comments, I wish to commend the Government for introducing this legislation, which clarifies the position of these TPI veterans. In all normal circumstances, TPI veterans will not lose the payment of their TPI pension for their lifetime. The only exceptions, which have been stated quite clearly, are if a veteran obtains a TPI pension by making a false or misleading statement or if a veteran returns to the work force. I think those two exceptions are quite understandable and valid. I wish to raise two other matters affecting the veteran community. The first affects the Concord Repatriation General Hospital, which provides assistance to a large number of veterans in New South Wales. Recently, because of a gap between the wage rate which was payable to nurses who are employed in New South Wales State Government hospitals and that payable to nurses employed at the Concord Repatriation General Hospital under a Federal award, the Concord hospital lost a large number of nurses to the New South Wales hospital system. Of course, that was largely due to that gap in the wage rate between the Federal and State awards. Much to my regret, as a result of that, the management of Concord hospital had to take action to close a number of wards. A large number of Vietnam veterans in my own electorate have expressed concern that one of the wards which was closed was one which had developed a great deal of special expertise in assisting Vietnam veterans who were suffering various traumas as a result of their service in Vietnam. While perhaps anyone could understand that hospitals sometimes have to take a hard decision and close wards when they have lost nursing staff, it has been many months now since the Australian Conciliation and Arbitration Commission took action to get rid of that gap which was causing the loss of nurses from the Concord repatriation system. I think it is time that the Minister considered whether the Concord repatriation system is building up the numbers of nurses to ensure that wards, such as the ward which was looking after Vietnam veterans, are reopened as soon as possible. I turn now to the implications of this legislation for the Department of Social Security. I am pleased to see the honourable member for Bradfield (Mr Connolly) at the table because I wish to make a few comments about some statements which he made in this debate. To a large extent this legislation deals with the family assistance package in which this Government can take great pride. I am pleased to see the honourable member for Farrer enter the chamber but I have to apologise to him as I have already finished my comments on the amendments to the Veterans' Entitlements Act. I hope he will read them with interest in Hansard. Returning to the comments made by the honourable member for Bradfield, I take it that he had recently visited a St Vincent de Paul Society crisis centre for families and believed that that entitled him to become an instant expert on poverty in Australia and in Sydney in particular. Perhaps the depth of his knowledge was demonstrated by his comment that the Prime Minister (Mr Hawke) had launched the family assistance package at Campbelltown. I have bad news for the honourable member for Bradfield: the Prime Minister's package was not launched at Campbelltown; it was in fact launched at Mount Druitt. I can understand that since he represents an electorate on Sydney's North Shore-- Mr Connolly —I was not invited. I watched it on television. Mr LEE —The honourable member said he was not invited and that he watched it on the television. But if he had watched television he would have heard that the launch was at Mount Druitt, not at Campbelltown. Since he represents a North Shore electorate in the northern suburbs of Sydney, I can perhaps understand that he does not get much of an opportunity to visit the western suburbs of Sydney. In fact, Mount Druitt is 30 kilometres north of Campbelltown. Since the Liberal Party of Australia is always claiming that it hopes to make inroads into the Australian Labor Party's base in the western suburbs, I would be happy, if he is interested, to provide him with a map of Sydney-the western suburbs of Sydney in particular-so that he can see that Mount Druitt is a very different place from Campbelltown. As for the honourable member's comments that poverty has increased under the Hawke Government, I think he knows that these claims are totally ridiculous. We have had 700,000 new jobs created. The Treasurer (Mr Keating) has colourfully remarked in Question Time previously that those people are not Martians; they are real people. Seven hundred thousand Australians who were not in employment when this Government was elected are now in employment. We also have to look at the level of pensions as a percentage of average weekly earnings to see what contribution this Government has made to alleviate proverty. When the Opposition left government in 1983 pensions were only 22.7 per cent of average weekly earnings. That was an absolute disgrace. From December, when the single base rate of pension will be $116.10 a week, pensions will be almost 24.8 per cent as a percentage of average weekly earnings. The great benefit that those near the poverty line will receive is the family package which this Government, under Prime Minister Bob Hawke, promised during the election campaign. I am proud of the fact that this Government has met that commitment with honour. It is important to compare what this Government is delivering with what the Opposition promised in the election campaign. The Opposition promised to cut government expenditure by 3c in the dollar every year, which somehow or other added up to 10c in the dollar. Opposition members would not tell people exactly where they were intending to cut back government expenditure, but we all know that would have been in areas such as veterans' affairs, social security, health and education. The Opposition would have used cuts in areas that would have hurt the less well-off in order to abolish the assets test so that millionaires could get a pension again. The Opposition wanted to cut back welfare, education and health in order to reintroduce deductions for the business community for its long lunches. It wanted to cut back pensions so that businesses could claim as a tax deduction the provision of BMWs and turbocharged Saab motor vehicles for their business executives. That is the choice in this chamber. The choice is between the Labor Party that is delivering the family package to very poor constituents and the Liberal and National parties, which were to cut back pensions to those on social security and to veterans in order to deliver tax cuts to the rich and to re-introduce all the rorts which this Government has fought so hard to abolish. The family package is worth $500m, which will be targeted to those who are in real need. That is unlike the Opposition's proposal which would abolish the assets test to provide money to those who are in least need. This family package can be divided into two elements. First, it will give cash to working families and, secondly, it will provide increases for pensioners with children. Working families will continue to receive family allowances; they will be unchanged. In addition, they will receive a tax free family allowance supplement, which will replace the family income supplement (FIS). I acknowledge the comment made by the honourable member for O'Connor (Mr Tuckey) that that program was brought in by the Fraser Government. I do not criticise that program because it delivered cash to low income families. The problem was the very poor take-up rate of FIS. Few people who were entitled to FIS approached the Department of Social Security and applied for it. Under the family income supplement those people received $17 a week. Under this Government's legislation, by the family allowance supplement they will receive $22 a week per child for children under 13 years of age, and $28 per week per child for teenagers between 13 and 15 years of age. In addition, there will be for the first time $15 a week for those who are renting privately. Not only are the payments per child significantly higher, particularly for teenagers, but of special importance is the fact that the incomes test has been relaxed. Let me quote two examples. A family with a gross income of $400, and with two teenagers, who are renting privately will receive $27 a week tax free, which is equivalent to a pay increase of $45 a week. The second example involves an equivalent family earning only $350 a week. That family through the family allowance supplement will receive $52 a week, which is equivalent to a pay rise of $86 a week. That is something working class families greatly need and appreciate. I hope that the take-up rate of the new family allowance supplement is much higher than was the case with the FIS. I am sure that the Minister for Social Security (Mr Howe) will ensure that this program is publicised so that every possible eligible person qualifies. I have great pleasure in supporting the legislation which takes a great step forward in seeking to allow every child the right not to live in poverty. Mr DONALD CAMERON(Moreton)(5.05) —Having heard the remarks of the honourable member for Dobell (Mr Lee) on the Social Security and Veterans' Entitlements Amendment Bill (No. 2), one would think that unemployment had disappeared, but I remind him that the unemployment rate now exceeds 8 per cent. There are more than 650,000 Australians out of work. The claim by the honourable member for Bradfield (Mr Connolly) earlier that the Australian Labor Party in government had created poverty was justified. The Labor Party in government has not-I repeat `has not'-rectified the economy to the extent that, if one were to listen to the Treasurer (Mr Keating) each day, one would be led to believe. I am sorry that the honourable member for Dobell is leaving the chamber, having just delivered his address. That leaves opposite at present the Minister for Employment Services and Youth Affairs (Mr Holding) on his own. It indicates the level of interest in this legislation in the Labor Party, unless Labor members are having another meeting in the Labor Party Caucus to decide whether privatisation is a goer. A number of matters require attention. I refer first to the speech made by the Minister for Veterans' Affairs (Mr Humphreys), who said: The family package is the centrepiece of this Government's attack on child poverty, not only for families where parents depend on social security because they are sick or unemployed, but for working families who have carried the burden of economic adjustment over the past few years. That speech is a frank admission that since Labor has been in power it has ignored the plight of the working family. I suggest to the Minister that it was only as a result of the policy approach by the Liberal and National parties at the last election to do something about those people in the work force whose income was not that high that the Prime Minister (Mr Hawke) suddenly dreamed up this idea to promise to eliminate all child poverty by 1990. It was a promise that was driven out of the Labor Party by the approach of the Liberal-National party coalition. As I said at the beginning, Labor has been a creator of poverty. Therefore, one cannot be in any way critical of the measures which are being taken to try to correct that situation. Nevertheless, the honourable member for Phillip (Ms McHugh) in the last day or so has applauded the Government on its approach in redirecting income. I believe philosophically and most strongly that there is a limit to what government should be doing in terms of how much it takes out of some people's pockets and puts into the pockets of others. I believe in support for the poor, but I also believe that the Labor Party's approach can accidentally-if I may be extremely generous, inadvertently-lower the level to which people aspire because they know that the Government will look after them. We are reaching a position in Australia where many so called middle income families are carrying a greater and greater burden to a point where their aspirations are diminishing because they think, `Why should I try?'. The Government took the family allowance away from people whose children had reached 16 years of age. Prior to that there was an almost sacred approach to the allowance for 18- to 25-year-olds paid to people whose children were going on to higher education. But when the Labor Government came to office it knocked that group off. It has a history of pulling back here and there. It has defined wealth as anything over about $22,000 or $23,000 a year. It is the creator of poverty in this country. A number of Bills are being debated today. The Minister claimed in his speech that the family package was based on the basic principle that every Australian child had the right to an adequate standard of living. Nobody can argue with that. It is also based on the solid Labor tradition of help for people in need of support. That is not a Labor tradition alone. It is our philosophy as well. The Minister then went on to say that it was the Lang Labor Government which introduced the world's first child endowment scheme to recognise the extra costs of families with children. Piffle! It is about time the Government learnt and spoke the truth. The reality is that Australia's first child endowment scheme was introduced by the Commonwealth Government in 1920. In 1920 Billy Hughes, in the non-Labor Nationalist Government, introduced a scheme for Commonwealth public servants, with the costs being borne by the Government via a direct addition to wages. It was not until seven years later that the Lang Labor Government introduced the New South Wales State scheme. Honourable members opposite have the view that if they repeat a lie often enough people will believe them. They are taking credit for something that is not true. From 1923 until 1941 the cost of the Federal scheme was met by the officials themselves from a fund provided by all-round flat rate deductions. Child endowment was often in the news before 1927. An attempt was made to introduce it as early as 1919 in New South Wales by the Holman Nationalist Government. The Bill was passed by the Legislative Assembly but was rejected by the Legislative Council. The same thing happened to the Storey Labor Government in 1921. In 1941 the Menzies Government-a non-Labor government-introduced the Child Endowment Act. A payment was made directly to the mother at a flat weekly rate for each child after the first child under the age of 16. The endowment was financed through payroll tax. The Curtin Labor Government, to its credit, built on the achievements of the Menzies Government by extending payment to children who were institutionalised, to Aboriginal children who spent six months a year on a mission and to orphans. In 1950, after Labor had had nine years in power, the Menzies Government took the step of providing child endowment to the first child under 16 years and continued with payments for second and subsequent children. So honourable members opposite should not try to parade themselves in this place as the only party that cares about families. When it comes to traditional family values, the coalition parties have a greater claim to caring and to policies directed to the support of families than the Australian Labor Party. The Bills before the Parliament affect everything from social security and veterans affairs to health. I am glad that the Minister for Veterans' Affairs has come into the chamber. As the Minister well knows, the Greenslopes Repatriation Hospital is in the Federal electorate of Moreton. To the shame of the Minister and his predecessor, the Greenslopes Repatriation Hospital appears to have been in utter shambles for the last six or seven months. It can be said that it all started with the specialists' strike. Things reached a point where specialists in the veterans' own hospital in Queensland-and they have only one hospital in Queensland-withdrew their services. This is a shameful reflection on the Hawke socialist Government. Since 1 May there have been no visiting specialists at the hospital. All services have been withdrawn as the result of an industrial dispute over a number of things, including the level of salaries. Mr Humphreys —Mr Deputy Speaker, I take a point of order. Whilst I do not want to disturb the honourable member for too long, he should relate to the legislation. I do not know how the Greenslopes Repatriation Hospital or any other hospital is concerned with the legislation before the House. I am happy for the honourable member to carry on as long as he does not carry on for too much longer. I know that you will correct him, Mr Deputy Speaker, if he keeps going. Mr DEPUTY SPEAKER(Hon. J. D. M. Dobie) —Order! There is no point of order. The honourable member will keep to the contents of the legislation, and not excite the House so much! Mr DONALD CAMERON —Mr Deputy Speaker, the principal Bill is entitled the Social Security and Veterans' Entitlements Amendment Bill. Veterans, particularly older veterans, have an entitlement in their latter years to feel secure that if they take sick and are whipped off to a hospital at least there will be a hospital bed for them. For the last six months the Greenslopes Repatriation Hospital has been functioning at 75 per cent of its capacity, not because the staff have been going slow but because over 100 beds have been empty because the hospital did not have the ability to run with a bed utilisation rate of 100 per cent. I can understand the Minister's sensitivity about this situation. No wonder he tries to shut me up on this subject. Every day lately there have been stories in the newspapers about the matter. On 12 November this year an article appeared in the Courier-Mail headed `Doctors to cut back on operations'. Another article, which appeared in the Sun on 26 October, was headed `Ex-serviceman alleges bias to Viet vets'. Another article in the Courier-Mail was headed `Hospital turned away veteran in pain-doctor'. A litany of such articles has been going on for weeks. I do not necessarily accept that all these articles are accurate in content. Mr Humphreys —That has nothing to do with the legislation. Mr DEPUTY SPEAKER —Order! I ask the Minister to stop interjecting. Mr DONALD CAMERON —I will be finished on this matter very shortly and the Minister can relax. Mr DEPUTY SPEAKER —The Minister will realise that we are debating Bills cognately on this occasion. The Chair is cognisant of the fact that the three Bills are related. The subject matter of this speech is within the bounds of the debate in general terms. But I ask the honourable member to be more relevant. Mr DONALD CAMERON —If the Minister gives me a go I will get on to another subject shortly. I was saying that I do not necessarily accept the veracity of all these newspaper reports. Nevertheless, the Greenslopes Repatriation Hospital is in so much turmoil that the Press is in such a mood that it writes almost anything. That tells its own story. I plead with the Minister. There are one or two other aspects I will not touch on which have also been most unsatisfactory. The Minister knows what they are. If the Minister wants to make his name as a Minister, I suggest that he make it by getting Greenslopes Repatriation Hospital functioning properly again and taking a personal interest in the hospital. The administration is probably being bled of funds but is being expected to make ends meet and to make everything function on what is almost a shoestring budget. I will leave my references to the Greenslopes hospital at that. At long last I have been able to say these things in the presence of the Minister for Veterans' Affairs. When one sits on this side of the House these days it is impossible to ask a question. In the last five minutes I have made up for a few questions that I have not been able to ask. Another point of concern about the legislation before the Parliament is the approach the Government is adopting in applying the assets test in relation to a host of benefits. We have heard references to this subject from other members on this side of the chamber, particularly shadow Ministers. The Government is saying that anybody who is over 25 years of age will be subject to the assets test in terms of unemployment benefits and the like. There are also hardship provisions for people who are excluded by virtue of assets, and those hardship provisions will be applied. Unfortunately, time does not allow me to go into what exactly are regarded as hardship provisions, but I have here some 23 pages which represent an extract from the pensions manual of instructions of the Department of Social Security. All these 23 pages do is concentrate on the applications of the hardship provisions. They are extremely complicated, and I guess they seek to take into account any possible situation. What I am raising with the Government today is its widening of the application of the principle of the assets test. This side of the House has been consistent in its opposition to the assets test, but in this legislation we are seeing a widening of those provisions. I put it to the Minister for Employment Services and Youth Affairs, who is at the table, the Minister for Veterans' Affairs sitting behind him and, indeed, the honourable member for Forde (Ms Crawford), sitting at the back of the chamber, that none of them are very young any more, even though the honourable member for Forde would be a good 20 years younger than the Minister for Veterans' Affairs. Let us say that the people who will be affected are single and own their own home. If their assets exceed $75,000 and they go out of work, those assets will be looked at in terms of their eligibility for a future benefit. That is what honourable members opposite will be voting for today. Not for one moment do I subscribe to those who are rolling in money receiving benefits. But let us take the Minister for Veterans' Affairs, who is about 50 years of age. I can tell him that, if he loses his job next time around, he will be 52 weeks out of work on average. He has a few assets. He will be off to the dole queue to apply for a benefit. He will be asked what his assets are. He will list his assets and he will be told, `Sorry'. He will say, `I might be asset rich, but I do not have any other money'. Of course, he will have another little form of income which excites people but which I will not mention here. The Department will want to know the Minister's assets and he will be faced with either getting nothing or perhaps taking steps to borrow on his assets. Let us say that he is 55 and worried about whether he will ever get a job again-which is quite possible. He will have to borrow on those assets. If nobody will lend him any money, he will have to-- Mr DEPUTY SPEAKER —Order! The honourable member's time has expired. Ms CRAWFORD(Forde)(5.25) —I rise with pleasure to speak in support of the Social Security and Veteran's Entitlements Amendment Bill (No. 2) 1987. The family package is the major initiative in this Bill. This Bill sets out to provide for the introduction of that family package, which is the centrepiece of this Government's attack on child poverty. The honourable member for Moreton (Mr Donald Cameron) has claimed that it is only the Opposition which is interested in families. Good heavens! The honourable member should know that we as a government are committed to families. It is not only the families which are dependent on social security because someone is sick or unemployed that are addressed in this Bill; rather, it is working families who for too long have carried the burden of economic adjustment over the past two years. This Government recognises that those people and their children and families are the very focus of our community. Those children are our future and it is imperative, if we are to pursue the principle of equity, that we provide for these families and their children. This Bill sets out to do just that. The family package sets out to enable families with children to receive allowances and rent assistance, and this will commence from 17 December 1987. Everyone knows that families in our community have felt the pressure of Australia's economic readjustment. Well may the honourable member for Moreton speak of the Menzies years. We are bearing the brunt of those years now and we have to make these kinds of economic readjustments simply because of the years we spent under the Menzies regime. Workers have been playing their part in exercising wage restraint. We support the principle that every member of our community has a right to live with dignity, so it is the children in our community who come first in this commitment under the family package. This package, then, is based on the solid Labor tradition of help for people in need and those deserving of our support. While the honourable member for Moreton claimed to have dispelled all the myths of the Labor tradition of child endowment, pensions and so on, he failed to point out that, of course, the initial introduction of these measures was well in line with the Opposition policy of the user pays principles. Labor tradition has in fact meant that child endowment was universal-not simply for those who happened to be in highly paid jobs and who could afford to pay the prerequisite amount. Indeed, what we are now seeing under this family package is cash money-C-A-S-H. It is cash in the hand, as the brochure says. It will then be for the families themselves to make a decision about where it will be spent and the kinds of needs which they as particular families have. It means that people will not have the indignity of the vouchers which the Opposition so often espouses and attempts to pursue. Indeed, members of the Opposition are very interested in all those sorts of things. They fail to recognise that within the family structure human beings have dignity and know very definitely the way in which they can and will spend their money. We as a government are committed to the maintenance of that dignity, and this package will put cash into people's hands. The family allowance supplement replaces the family income supplement. It will pay $22 a week for each child. However, if children are 13, 14 or 15 years old, the payment will be $28 a week. One may well ask why. This is a recognition of the cost of education, of clothing and of feeding children who are in their teenage years. This is often when a family's budget is most stretched. We as a government are flexible enough to acknowledge that. Families on a gross wage of $300 a week or less will get full payment if they have one child. The reality is that the bigger the family the more money it can earn and still receive some payment. Because it is tax free, the family allowance supplement is better than a pay rise. We are acknowledging that families are central to our community. These children are our future. It is their education that we are looking at and also the strain which financial overstress often places on such families. Despite the protestations of the honourable member for Moreton, we as a government are committed to the maintenance of the family and the children within the family structure. The family assistance package sets out to do that. Because the family allowance supplement is tax free, it is the equivalent of a pay rise in the vicinity of $45 a week. The work force would simply not be able to sustain such a pay rise. One may well ask where these benefits are coming from. Indeed, it is very important to acknowledge that most of the money for these benefits has come from the tax and welfare cheats. This distribution of income represents equity on a very real scale. Those people who for too long have ripped off our system and who have not participated and contributed to the full community have now been caught. We as a government are not shirking our responsibility to dispose of that income to those people who are most in need. This is without doubt the most exciting legislation which has been introduced into this Parliament for a long time in the pursuit of social justice and the removal of children from poverty. A part of this package is the introduction of a new child disability allowance which will replace the old handicapped child's allowance. Many of us who know families with handicapped children understand the very real needs and the financial strains that are placed on families with such children. There are often extra medical expenses and there are bills and requirements which other children do not have. There are often babysitting costs to be met, and so on. We have acknowledged those costs. Our commitment is to all the children in our society. We acknowledge the role that the family plays in the support of a handicapped child. If it is at all possible, it is important that handicapped children remain within their family structure. Hence, we have increased the payment for handicapped children and done away with the means test altogether. Irrespective of how much money people have, we are saying that all children have needs and we acknowledge that. Indeed, 10,000 additional disabled children are expected to qualify for the payment as a result of the removal of the income test and, we hope, due to the improved take-up resulting from publicity associated with the family package. We know that there are very many people within our community who are entitled currently to payments within our social security system who have not yet taken them up. We are hopeful that these people will now be made fully cognisant of their rights and so be able to participate fully within this scheme. Measures contained within this Social Security and Veterans' Entitlements Amendment Bill (No. 2) also reinforce our Government's commitment to the many pensioners and aged citizens in our community. After all, they are the people who have served our community. It is important that we acknowledge them and do not allow them to fall into poverty traps. The responsiveness and flexibility of this new system, with the introduction of the earnings credit scheme, means that many pensioners will now be able to take up part time jobs. It will offer them an incentive to go out and supplement their income. This earnings credit scheme, which came into effect on 1 November 1987, means that pensioners with a limited private income can take up short term jobs. For example, with Christmas coming up, we know that there are many people who will wish to become Father Christmases. People who have been unable to do so earlier because of the earnings requirements associated with their pension will now be able to earn up to $1,000 each from a casual job in the course of six months and still be able to have their pension. This is very important. It enables people to have the stimulus of working, to have the joy and the pleasure of going out and feeling that they are still able to make a very real and and worthwhile contribution to our community. The flexibility of this system is one of its most exciting aspects. Also in this legislation eligibility for the carer's pension has not been restricted to close relatives. This will apply from 1 February 1988. My colleague the honourable member for Phillip (Ms McHugh) has already suggested that many of the people who are caring for victims of acquired immune deficiency syndrome within our community fall into this category. We as a government have worked towards a policy which hopes to keep people in their homes for as long as possible, should they so wish. The carer's pension is simply part of this approach and it will enable people to be best served and will meet their needs at home rather than their going to an institution. We have a humane approach to pensioners and we acknowledge that they must and should have a choice over their lives. The legislation also provides for the transition from a benefit to Austudy, if this is necessary. This transition will commence on 1 January 1988. This is a very important consideration because for many of our pensioners the long term solution to their poverty and to their poverty traps is the pursuance of study. We as a community need the kinds of skills that study and training can bring about. We urge and encourage people to pursue such skills. Hence, the transition from benefits to Austudy is being made easier. We as a government have become much more flexible. We are attempting to meet the very real needs of a very wide range of people within our community. We do not stereotype people. We do not want a system of one for all. We are talking about all sorts of individuals within our community. Another important aspect of this Bill relates to youth. I am the first to acknowledge, as I have the largest Commonwealth Employment Service office in Queensland, that there are far too many unemployed youth in our community. It is not only they who are the losers; we as a community lose very much by failing to use their skills to the fullest advantage. Hence, from 1 January 1988, 16- and 17-year-olds will qualify for $50 a week for the job search allowance. This is subject to an activities test which means that they could be required to attend courses. Of that $50, $25 will be affected by parental income. This is an attempt to acknowledge that the youth within our community must be skilled if they are to participate fully in our work force. The kinds of skills that are required now within the work force are those of a high order. We cannot afford to have our youth leaving school and moving on to the unemployment benefit without acknowledging that there is a very real need for skills and skills training. We are committed to their being part of our work force and this job search allowance attempts to do that. Another part of this Bill relates to veterans within our community. Our Government, and particularly our Minister for Veterans' Affairs (Mr Humphreys), has a very high commitment to veterans in our society. We acknowledge their contribution and the very real debt which we owe to them. They have helped to create the kind of society in which we now live. This entitlements legislation will mean the postponement of the cancellation of fringe benefits. Very many of our service pensioners choose to work part time and they have at times been subjected to the loss of certain fringe benefits-pharmaceutical benefits, telephone rental and other such benefits often provided to pensioners by State and local government. Previously, when a service pensioner who received fringe benefits notified the Department of Veterans' Affairs of an increase in income over the allowed limit, the Department would notify the pensioner of the immediate loss of fringe benefits if the income was more than 25 per cent over the limit. This change means that a pensioner's income will be able to rise up to 25 per cent above the fringe benefit income level with a period of three months grace before the fringe benefit will be withdrawn. This will take effect from 1 January 1988. There are some 2,000 service pensioners whose income fluctuates. This is due to short periods of casual earning, indexation of superannuation and, of course, overseas investments which some of our service pensioners have. This decision relates to the fringe benefit eligibility only and the service pension will not be affected. The fringe benefit eligibility will still be granted automatically and the three-month period of grace is being extended to avoid the inconvenience that is experienced by pensioners who lose their fringe benefits for short periods because of short term fluctuations. Once again, I would suggest that we are showing an incredible amount of flexibility. It makes sense to be flexible and it helps people. Another aspect of the amendment to the Veterans' Entitlements Act will mean an extension of full treatment benefits to all Australian returned service women of World War II. This was part of an election promise. I, as a woman, am delighted that these women will now be provided with repatriation, medical and hospital treatment for all the injuries they suffered, in addition to treatment currently being provided. The Government has taken this step following a study of returned Australian service women undertaken by the Repatriation Commission. It is estimated that there will be over 3,000 surviving returned service women of whom close to 1,000 will not have had an entitlement to full medical treatment under the Veterans' Entitlements Act. Those service women have experienced very difficult conditions. They have endured physical hardship and have faced the hazards of diseases, poor diet and climatic excesses. It is an acknowledgment by a government that is committed to equality that these service women are now being accommodated. The family assistance package will also, of course, cover those people who are currently covered by service and veterans pensions. What will happen is that means testing of parental income for educational allowances will not be introduced. All children whose fathers died as a result of service to their country or who were severely incapacitated through service will continue to receive guidance and financial support through the Veterans' Affairs Department. That is a further acknowledgment of the commitment which our service people have made to our community and it is their children who will continue to be part of our society. It is through education and training that this can be done. I have great delight in speaking to the Social Security and Veterans' Entitlements Amendment Bill (No. 2) 1987. It puts in place not only the promises made during the election but also the promises which are inherent in the Australian Labor Party's platform and to which this Government has been committed. It is a very real commitment to equity. It is a commitment to the children in our community. It is a very important step along the path to removing every child from poverty by 1990. The family assistance package and, with it, the entitlements which go to pensioners and veterans in our community reinforce our view of creating a fairer and more just society. I commend the Bill to the House. Mr ADERMANN(Fairfax)(5.44) —We are debating the Social Security and Veterans' Entitlements Amendment Bill (No. 2) 1987 cognately with the Health Legislation Amendment Bill (No. 2). The first Bill, to which I shall speak particularly, gives effect to a number of announcements made by the Government, including the provisions described as the family assistance package. In those amendments to the Social Security Act, the main proposals are the introduction of a family allowance supplement, certain increases in additional pension and benefit for children in line with the family allowance supplement rates, rent assistance for low income earners with dependent children under 16 years and the introduction of a child disability allowance. Those measures have bipartisan support and are in no way opposed. In the area of unemployment and sickness benefits, the Bill introduces an assets test for beneficiaries over 25 years of age. Although I want to concentrate my remarks on other parts of this legislation, nevertheless, I would register some concern at the application of the assets test to recipients of sickness benefit. On a number of occasions I have condemned the application of the wretched assets test and have always said that an income test is far more equitable and sustainable than an assets test. I repeat that assertion. Sadly, I have seen many service pensioners caught up and losing all or much of their pension because of this test. They have assets which cannot be liquidated, yet there is no income. The hardship test, more often than not, does not help. However, the philosophical debate on the assets test is perhaps not the real thrust of this legislation. Certainly, its application to sickness benefit recipients, as in the past to service pensioners, could raise considerable anomalies and difficulties. I hope that at least the Government will keep this under some sort of scrutiny and monitoring. Other aspects of the legislation include the introduction of a pensioner's earnings credit, some benefits with regard to the fringe benefits car retention, and changes to treatment of certain investment income. They are quite unexceptionable and quite bipartisan support is afforded to them. The only substantial comment I want to make about the social security portion of the legislation relates to the job search allowance and the general youth unemployment issue. Once again, it is not by any means a condemnation. This aspect applies to young people in the 16- and 17-year-old bracket. The assets test mentioned earlier does not apply to the under 25-year-olds. I do not criticise the addressing of a very grievous problem in our nation, and other nations, which is of bipartisan concern and which transcends partisan politics-that is, the future of our young people. We all recognise that our school leavers face a very uncertain employment future. In today's world, it is no longer possible to ensure that many of them will be able to enter the livelihood on which they have set their sights and ambitions. We all recognise the very sad effects which can result from the dashing of those aspirations and ambitions, the heartbreak of the fruitless search for employment and the damage that results from continual rejection of applications for employment. The permanent and deep damage resulting from the `not wanted' feeling is only too plainly seen in the number of drop-outs and even youth suicides. I suspect that it is also a factor in the increasing problem of the wretched drug trade. Therefore, there is bipartisan desire to alleviate these problems. Unfortunately, in our community, as in every community, there are some, hopefully a very small minority, who cannot be helped and whose philosophy is that there is no reason for them to work or make any contribution to the nation while government and community benevolence is available to subsidise self-chosen idleness. The sad aspect of this is not so much that those people exist; it is because of this undesirable attitude in a few that all young people are often smeared by the taint of dole bludging. That is wrong, unfair and tragic. We all see in our electorate offices the repeated tragedy of young people who have trodden the streets, tried every avenue and, in desperation, come to us in the hope that we can find them a job. They want neither unemployment benefit nor charity; they just want a chance. I do not criticise anything that can be done to restore their dignity and give them some hope for the future. Combined with these initiatives, the Government's Austudy-before that, the tertiary education assistance scheme-is designed to assist young people in enabling them to stay at school and to go on to secondary and tertiary education. I endorse that package too. I think these things have to be worked together. But I point out one omission which I hope the Government will consider seriously. I am pleased that the Minister for Social Security (Mr Howe) is in the House this evening because I think he knows that what I say, I say seriously. I see it as a sad anomaly. I do not allege that it is deliberate, but it does exist and I hope that my appeal will be at least considered. This educational help through Austudy is not available to students in theological colleges even when they are studying for a degree. They have no income. They are like other students equipping themselves for their future and for employment. They should not be treated differently from any other young person who is studying for a profession. They cannot apply for unemployment benefits because their consciences will not let them do such a thing. That seems to me to be sad and unfair. I hope the Minister at the table will at least see whether the situation can be redressed and in some way rectified. In looking at the legislation relating to youth unemployment, job search and other initiatives, I urge the Government not to overlook another very worrying problem. I refer to men and women of early or late middle age who have been retrenched or whose businesses have folded leaving them without work. The Minister has seen them and I have seen them. These people find that they are consigned to the scrap-heap. They are regarded as too old and all doors are shut to them. The tragedy and the frequency of this situation and the hopelessness it causes is of great concern. It must be of great concern. It must be addressed specifically and with great urgency. I am not drawing attention away from the problem of youth unemployment. That too is a matter of great concern. Honourable members will be familiar with the situation of constituents in that category who come to their offices and break down, totally demoralised. This crisis of youth unemployment is of great concern. I turn to the veterans affairs section of the legislation. I am very pleased that the Minister for Veterans' Affairs (Mr Humphreys) has spent quite a lot of time in the House during this debate. I have a great deal of respect for him. I think he is very concerned with the lot of veterans and I commend him for that. I am pleased that the anxiety of the totally and permanently incapacitated (TPI) veterans emanating from the court decision which put at risk the permanency of the pensions has been removed. That caused a lot of heartbreak and many problems. I welcome the provisions which ensure that the preservation of the rights of veterans to the payment of special TPI intermediate rate pensions for life is now guaranteed. There is real concern in the veteran community and the court decision exacerbated that concern. I have expressed concern in this House on previous occasions about changes in the philosophy of TPI pensions. I point out to the House-the Minister who is in the House will know-that this is not something new. It is not something that I started to do since being in Opposition. It is a principle I tried to establish, strengthen and enshrine when I was the Minister responsible for veterans' affairs. Over the years, the words of the Act have been more and more literally and stringently interpreted. I am distressed about that. More and more the TPI has been regarded as a pension or a substitute for earnings. I do not, and I never will, accept that view. TPI intermediate and disability pensions are not pensions; they are compensation. They are ill-named. That is why I believe the Government's view of it being almost impossible for a pensioner to apply for and receive a TPI pension is very wrong. The philosophy which so strictly interprets the Act and maintains that a TPI is paid in lieu of the capacity to earn a wage and that alone, and that when a person reaches normal retirement age he can no longer qualify, is wrong. It completely ignores the reality that a veteran may have had to take a lesser paid job throughout his lifetime because of his disability. It ignores the fact that that decision has cost him dearly in medication to enable him to work. It ignores the fact that perhaps he cannot get the insurance cover and the superannuation that others can get. It ignores the fact that he has tried to make a contribution to our way of life rather than lean back and apply for a pension to which he would be entitled. It ignores the fact that the veteran's wife and family have made many sacrifices and have been under very great strain supporting the disabled veteran in his determination to work and not to drop out. It ignores the fact that advancing years increase the pain and the disability, sometimes causing great distress. So for all his sacrifice and endeavour the veteran is ruled out from obtaining the TPI pension after 60 years of age. His wife who has sacrificed so much and has been denied so much is also denied the possibility of some compensation by way of qualifying as a war widow if her husband dies. I deplore the subtle change over the years which regards such compensation as a pension. I deplore the departure from the recognition that it is nothing of the sort. It is compensation earned and promised. We ought not seek to avoid that. At least in this legislation if a TPI pension has been granted it cannot be taken away except under special circumstances and there is no contest about those. In the interest of veterans who have suffered so much, who have been promised so much, I appeal for a rethink of other recent legislative changes and a return to the recognition of the TPI pension not as a handout, not as a substitute for earnings, but as compensation. It was this philosophical change which so increased veterans worries when the court decision was handed down. To them it looked like the last straw. I am very pleased that that has been remedied. The Government said it would remedy the situation and it has done so. I commend it for that decision. The previous tightening up of TPI pensions, which disqualified people or made it impossible for people to get the pension after 60 years of age, saved the Government $70m a year. That is not much but it was achieved, I believe, at the expense of veterans who feel that they have been betrayed. It was false economy. I am not happy about the provisions in this legislation which would deem 2.5 per cent of the value of the asset owned by the veterans to be income irrespective of whether income to this value is capable of being earned at all. This just adds to the growing feeling among veterans that promises made to them are now being diluted and that they are being singled out to accept a disproportionate share of the sacrifices at a time of economic stringency. Mr Braithwaite —After the sacrifices they made. Mr ADERMANN —Yes, after the sacrifices they and their families made. Additionally, this will particularly and unfairly impact on country veterans who may have land that is farmed by the family but who get no monetary benefit from it at all. They battle to get a few assets together and, on top of all the other attacks on their benefits, they now suffer for that also. I am very unhappy about that provision. Once again the Government has shown some wisdom in adopting one policy pronouncement which the Opposition advanced as policy at the last election. That is the extension of full treatment entitlements to World War II ex-service women. That is desirable and that is to be commended. It still excludes ex-service women who served in Korea, Malaya and Vietnam. Their numbers are not great. For a minimal cost of about $65,000 a year they could also be covered by this provision. I urge the Government to remove this restriction because it seems an unfortunate and unfair discrimination in the light of the steps that it has already taken. These ex-service women should also be included. Mr Cowan —Why were they excluded? Mr ADERMANN —They may have been excluded because of the cost. I ask the Government to take another look at that because we are not talking about a very big sum of money and we are not talking about very many people. In addition, this provision does not refer to ex-servicewomen who embarked for active service but who did not actually serve in a theatre of war. There are not very many of them either. Perhaps the Government could see whether and when those ex-service women also could be brought into this concession. The Returned Services League has brought these omissions to the Government's attention, I believe, and I hope that the Minister will consider those submissions sympathetically and urgently as being made in good faith. The veterans legislation needs more attention and amendment. Despite this amending Bill there are still matters which are not addressed. The defence service home loans scheme is still unresolved. The announced patient contribution in nursing homes still hangs over veterans' heads and will probably be sneaked through under the regulation making power. I am concerned about that. In the interest of time I will not further extend my remarks, although there are very many other concerns of veterans that I would like to address. I think that is something I am known for in this House. I believe the veterans of this country deserve the best possible treatment. When they went to war all sorts of promises were made to them. Now the time has come to deliver on those promises. We must not back off from them. We must pay the bill, as we said we would. Mr Braithwaite —They had a good Minister when you were the Minister. Mr ADERMANN —I did my best. I conclude by confirming that, as this Bill does preserve the TPI rights which have been threatened, I will support it. However, as I have pointed out, there are a number of aspects of this Bill which do not please me, and this Parliament will probably hear more from me putting the case for our veterans, to whom this nation owes so much. Mr FREE(Lindsay)(6.01) —Sixty-two years ago was an election year in New South Wales. The Leader of the Australian Labor Party Opposition at the time, Jack Lang, fought the 1925 election on three issues: the abolition of the upper House, pensions for widows and the introduction of child endowment. On the latter Lang made a promise to the families of New South Wales in his policy speech, when he said: We will explore all avenues in order to provide for the families of workers living on low wages. It is monstrous to expect a family of six, seven or eight persons to exist on a wage based on a family of four. It means continual poverty, sickness and struggle with the spectre of unemployment ever present. Labor will find a satisfactory solution to this problem. Lang's 1925 promise to families established a proud and enduring Labor tradition, a tradition to assert the responsibilities of the state to the family in a practical way. That tradition continues today, and that responsibility is reaffirmed in the Social Security and Veterans' Entitlement Amendment Bill (No. 2), which implements the family allowance supplement. The family allowance supplement, which will be introduced next month, has two important features: the benefits it provides are substantial and it is targeted at families on the lowest incomes. In other words, it provides the greatest assistance to those Australian families in greatest need. The history of the development of assistance to families in Australia shows two recurring themes. There has been opposition and neglect from the conservative parties, and the only significant advances ever have occurred under Labor governments. For example, Lang, following his election in 1925, confronted determined opposition. His predecessor, John Storey, who incidentally established Australia's first and only Ministry of Public Health and Motherhood, promised but never delivered assistance to families. The Lang Bill provided 10s a week for each child under 14 years of age, and this at a time when the basic wage was #4 2s and lower paid workers received much less. Lang records that at the time carriers were paid 25s a week and they had to find a horse and cart as well. Very often the horse was fed and the family went without. Lang's 10s a week a child Bill was rejected by a hostile upper House in 1927. Interestingly, it was also opposed by the Trades Hall at the time. The officials of Trades Hall feared that endowment would be used to lower the basic wage. We have a happy contrast today: the Secretary of the Australian Council of Trade Unions, Bill Kelty, has rightly hailed the Hawke family package as a great reform. Kelty has said: Left to our own bargaining capacity, it would take at least 50 to 60 years to increase the real wage rates of the lower wage earners to rates represented in the family package. In the face of upper House obstruction, Lang accepted a compromise of 5s a week. There the base rate stayed, at 50c a week for the next 50 years. In fact the conservatives, under Stevens, who succeeded Lang in New South Wales, took away the payment for the first child. The Commonwealth took the scheme over during World War II and extended it to all Australian families, but still failed to pay for the first child. Labor, in 1945, increased the base rate to 7s 6d a week and, in 1948, to 10s a week. It was left to Menzies in 1950 to restore the 5s a week payment for the first child-the only improvement of any significance implemented by conservative governments in 60 years. During the 23 years of conservative rule between 1949 and 1972, endowment for the first child stayed at 50c a week; endowment for the second child stayed at $1 a week; and for the third and fourth children it rose from $1 to $2 and to $2.25 respectively. For the families of Australia those were 23 years of neglect. Under the Whitlam Labor Government families enjoyed the first real improvement in over a generation. Endowment was continued and to it was added a system of tax rebates which increased the value of payment for the second child four-fold and for the first child to nine times the level it was under the Liberals. All of this was abolished by the Liberals in 1976 and replaced by the family allowance. The Fraser family allowance scheme has always attracted more credit than it deserved. It was in fact a fraud on Australian families, because at no time did the family allowance reach the value of endowment and indexed rebates provided by Labor in 1975. The 1987 Labor package provides substantial and tax free payments of $22 a week for children up to 12 years of age and $28 a week for teenage children, plus a rental allowance of $15. It targets those benefits within the framework of a generous income test. For example, a family with five children under 12 years of age and renting will receive part payment with an income of up to $598 a week. I believe that the principle that benefits should be targeted to those in greatest need is very important. It is especially important in times when governments have limited resources. This principle is being applied well in the design of the family allowance supplement. I have previously expressed concern that the family allowance supplement might suffer the same fate as its predecessor, the family income supplement (FIS), in that its undoubted benefits might not reach all eligible families. It is well recognised that the FIS had a low take-up rate. How low nobody really knew, but estimates have varied from 50 per cent down to 20 per cent, mainly because the scheme was poorly promoted and poorly advertised. It is a difficult proposition because the target group is in work-low paid work but nevertheless work. So the client or target group is never in regular contact with officers of the Department of Social Security. They need to be reached for this scheme to be a success. In this respect I congratulate the Government, the Minister for Social Security (Mr Howe) and his Department on their efforts so far to publicise the family allowance supplement and to reach the target group. Those efforts so far have been good. The brochure which has been produced is clear and attractive and easy to read, with a tear out reply slip that I am sure will boost the take-up rate. The public launch, which took place last Friday at Mount Druitt, was a well attended and very successful occasion. It was attended by the Prime Minister (Mr Hawke), the Minister for Social Security and the honourable member for Chifley (Mr Price), the local member for the area covering Mount Druitt. The Prime Minister and the honourable member for Chifley both delivered fine speeches on that important occasion. It is a great pity that the event did not attract greater publicity. In this respect, I must say that I am disappointed with the metropolitan media, because the Saturday papers had the choice of using photographs of the Prime Minister with the honourable member for Chifley and the Minister for Social Security on the one hand, or, with Alan Bond at a subsequent function on the other. In a regrettable instance of misplaced priorities, the newspapers chose the Bond photographs. I have nothing against Bond. He is making a very generous gift of a replica of the Endeavour to the Australian people. But a half a billion dollar package to assist Australian families was a far more significant story, particularly when the columnists of the same newspapers regularly attack the Prime Minister for supposedly abandoning traditional Labor values. Further, the honourable member for Chifley, either in or out of a cocked hat, is one of the most photogenic members ever to have graced the green leather of this chamber. I think it is a pity that the photograph was not used. Despite that fact, the launch at Mount Druitt was a great success. The follow-up activities that the Minister has mentioned include the distribution of information through trade unions and community organisations, the seeking of assistance through employers and working through ethnic groups and Aboriginal communities. I am sure that, given this effort, the take up rate will be a very good one. The history of the development of programs to assist Australian families has been marked by a consistent difference between the non-Labor and the Labor parties. On the conservative side of politics, whenever the current Opposition and its predecessors have been able to get away with it they have never hesitated to attack family living standards. They have improved the lot of the Australian family only when it has been absolutely politically unavoidable, and even then only by miserly amounts. The only exception in 60 years of hostility and neglect was Menzies' 50c paid in 1950 for the first child. Successors to Stevens, Menzies, Fraser and the rest of the conservatives in this Parliament-the inheritors of that Liberal anti-family tradition-are just as anti-family as their predecessors. Let me quote from the transcript of an interview with the Deputy Leader of the Opposition (Mr Peacock) on the Australian Broadcasting Corporation program AM on 5 November. When asked about expenditure cuts to finance a new Liberal tax policy, he said: . . . we've also indicated in the welfare area, whether it be in unemployment benefits, supporting parents benefits and indeed on Medicare, the schedule of areas we would cut. Well, they're all going to be reviewed because our tax package is dependent on cuts in Government expenditure. So they'll all be there. The interviewer asked: Can you be more specific, especially in areas concerning social welfare? The Deputy Leader of the Opposition stated: Yes, I could be. But, after all, the duty is on the Government to be specific, not us. So I'm not going further than that at this stage, nor do I have to. What terrific news that is for the under-privileged! What a great reassurance that is for Australian families from the Deputy Leader of the Opposition! Labor, in contrast, has a great and proud history of improving the lot of Australian families. Lang, Curtin, Chifley and Whitlam all worked for and improved conditions for Australian families. The Hawke family package is the latest achievement in this proud Labor tradition, a tradition which is based firmly on the ideals on which our great Party was founded. Mr PORTER(Barker)(6.14) —In this cognate debate I want to address the Social Security and Veterans' Entitlements Amendment Bill (No. 2) and to refer particularly to one of the sections in that Bill which relates to proposals to change the hardship provisions for the assets test. In my view this is yet another case of the Government overstepping the mark and imposing, in relation to this relatively new assets test, intolerably harsh rules which do not take account of the variety of circumstances in which people can be affected by the assets test. In order to get my comments into context let me firstly read what the Minister for Veterans' Affairs (Mr Humphreys) in his second reading speech said these provisions would do. He said: Under the hardship provisions of the assets test, certain assets can be disregarded. However, income which could reasonably be generated by those disregarded assets is taken into account when calculating the rate of pension payable under the hardship provisions. Recent interpretations of these provisions by the Administrative Appeals Tribunal have undermined its purpose and effect, so this Bill contains a measure to clarify the Government's intention. The Minister continued: Pension calculated under the financial hardship test will be reduced by the greater of 2.5 per cent per annum of the property disregarded under the test; or the income which could reasonably be expected to be obtained from commercial use of the property disregarded under the test. The Minister referred to income which could reasonably be generated from the property or assets which had been disregarded. The Government is of the view that the Administrative Appeals Tribunal (AAT), having looked at the circumstances of the cases of the people involved, has come to the wrong decision. The AAT has determined that there are cases of hardship but the Government is saying `the AAT is wrong. What we will do is deem a minimum 2 1/2 per cent income on those assets. We believe that the income which could be generated by those assets ought to be assessed at 2 1/2 per cent flat with no discretion'. That is really what is at stake here. I put to the Minister the difficulties which this measure will pose for many people who have been subjected to the assets test. Let us get that into relative terms. I am not talking about the 15 millionaires who are supposedly caught by the assets test. I am talking about the other end of the scale-the really hard cases, the battling Aussie, especially the battling Aussie farmer. Why farmers? Let me just explain. Firstly, I take the asset that most people hold or try to gain through their life, that is, their house. Their house is not taken into account in the assets test. If one happens to be lucky enough to live in a city, one's house is likely to be worth a lot more than if one lived in the country. So, firstly, farmers are discriminated against because if they put their money into a country house their assets will be worth less than if they put their money into a city house. Secondly, many poor farmers have taken in family members, as I shall explain in some examples I shall give later. They have done so in circumstances in which I believe the application of this measure will cause enormous trauma and social dislocation. If the pensioners who have been granted a pension up to date but, subject to this legislation, will not be eligible for one in future, are forced to realise their asset to sell up the farm, they will be selling the livelihood of other members of their family, and that will cause enormous dislocation. In fact, it could increase, not reduce, the Government's social security payout. I say to the Minister for Social Security (Mr Howe)-I am delighted that he is at the table-that in some instances the return on rural land is not as high as what might be considered basic commercial returns, because the farmers who have survived on that rural land have accepted, and are prepared to suffer, lower standards of living than their urban counterparts. I could take the Minister to many farms in my electorate where farmers are happy farming their land but do not earn the sorts of returns that one would expect as normal commercial returns for the asset value of that land. I repeat that we are talking about the really hard cases, not the general run of the mill cases. The Department was good enough to indicate to me just how many cases we are talking about. I think it is important that we get this in perspective. I was advised that as at 30 June 1987 there were 820 hardship cases to which this legislation might apply. Of those cases, 24 were receiving benefits as a result of AAT decisions. The Minister, in his second reading speech, said that the AAT had decided that these people were in circumstances of hardship, and although the Department had not accepted that these were hardship cases they had been granted pensions. There were other cases that had been before the AAT-I think that 32 cases have been reviewed by the AAT. Fifteen decisions have been in favour of the Department and 17-involving 24 cases-have been in favour of the applicants. If we limit ourselves to the people to whom the Minister referred in his second reading speech, we are talking about 24 people. Even if we take the outside number of 820 people, how many of those will be affected by this change to the legislation? The Department has carried out a survey of 44 cases in New South Wales where the 2.5 per cent deemed income provision would have had an effect on the pension that was otherwise payable. Only four of those 44 cases had used the 2.5 per cent. Of the 40 remaining, if the 2.5 per cent deemed income provision in the legislation were implemented, the Department believes on that survey that 20 per cent will not be affected, 20 per cent will have their pensions cancelled and 60 per cent will have a part reduction in their pensions. So if that survey is applicable to the whole of Australia-and there is some doubt about that, but let us say that the survey is indicative of the rest of Australia-then we are talking about 80 per cent of the 820 hardship cases on which basis the Department is currently paying pension, whether it is the result of the Department accepting or of the AAT ruling that it is a hardship case. Again, I say that we are really talking about the hard cases. There are not a lot of them. Eighty per cent of 820 is 650-odd cases. The Government is currently paying pensions to 1.3 million age pensioners. We are talking about fewer than 0.05 per cent of the age pensions payable in this country. I put it to the Minister that by deeming that these people will earn 2 1/2 per cent from their assets, the Government will cause some real difficulties for some of those 820 cases. I want to highlight to the Minister two cases which come from my electorate where I believe it is unconscionable to remove the discretion that the Department currently has and to impose a 2 1/2 per cent deemed income provision. I take the case of Mr and Mrs Butler. They took up a war service settlement block of 260 hectares 38 years ago. It was their first real home. Mr Butler was 39 years of age and Mrs Butler was 37. They had been married for eight years before they got their first chance to get a small war service settlers block of 260 hectares. When their son left school he immediately went to work on the family farm. He had been working there for 14 years without income; he had not been paid wages as his parents could not afford it. In 1981 the parents retired and they leased the land to their son for $100 a week. Following the introduction of the assets test, Mrs Butler-who has, of course, lived with her husband on the property in the south-east of South Australia since 1949-suddenly had her pension cancelled. The pension had been denied to Mrs Butler on the ground that her husband owned a property worked by their son, who had been paying them rental of $100 a week since their retirement. Mr Butler, who is 72 years of age, had received a war service pension. The farming community was extremely concerned that one of its members could be so affected by the assets test. Honourable members will remember that there was uproar throughout Australia over the harshness of the assets test. So the Government brought in provisions to ameliorate the really hard cases. Even under those provisions, the Department of Social Security did not believe that the Butlers were entitled to a pension and so, with the support of the farming community and the National Farmers Federation which assisted in underwriting the legal costs, the Butlers appealed to the Administrative Appeals Tribunal. The hearing was told that the parents had surrendered insurance policies in 1984 in order to reroof the house on their property. That left them with $800 with which to support themselves after their pensions had been cancelled. They needed to borrow money from their family to support themselves, including from their son who, in turn, had borrowed money from the bank. The capital value of the 260 hectare farm had been assessed in November 1985 at $412,000, although it was agreed at the hearing that it was probable that the land values could have dropped by 20 or 30 per cent. Here was an asset worth between $300,000 and $400,000 which had been farmed by the parents. The son leased the land, having worked on it for some 14 years without being paid wages. The Government came along and said, `Well, we have applied the assets test. Sorry, you will have to get off. Your son will have to pay you a pension or we will have to sell up the land'. The son was clearly not in a position to pay his parents a pension. There was just not that amount of money to be earned from the property. In this case the appeal to the AAT was successful and the pension was restored to the Butlers. But all that is now put at risk because if this legislation is passed, the Department can now override the AAT decision by reviewing the pension that is currently payable to Mr and Mrs Butler. It can say to them, `Well, we are sorry. You have proved to the AAT that yours was a genuine case of hardship where it would be unconscionable for us to force you to sell the family farm from under your son, but the legislation has been passed and that is what we are going to do'. Sitting suspended from 6.29 to 8 p.m. Mr PORTER —Before the suspension of the sitting I was pointing to the concern that I and the Opposition have with the impact of this legislation on some of the people who have been affected by the assets test and who will no longer be able to avail themselves of the hardship provisions. I was giving examples, and will give another example-a farmer in my electorate whose parents in 1952 bought a war service settlers property of 900 acres. Subsequently the son left school, went to work with his parents on the land, and bought another 350 acres. But the Department of Lands in South Australia said that the small area he purchased was not viable by itself and that it should be put in the name of the parents and the young man concerned as joint tenants and become part of the total farm. The parents are now in their late sixties, they have retired, and would like to be on a pension. The son, who is 35 years old, is working on the land and has a wife and four children. The property is in joint tenancy and is valued at some $480,000. Given the application of this amendment to the legislation, the Department will say, `Your parents have two-thirds of the ownership of the property as two of the three joint tenants. Therefore, the value of their portion is around $320,000 and they should be getting a deemed income of 2.5 per cent from that land'. Therefore, the Department's view is that the parents are not entitled to a pension. The Department of Agriculture has reviewed the case and has said that once the loan commitments on the stock mortgages are paid the annual net income is $8,000. The question I ask the Government is: How can one deem an income from this property of 2.5 per cent when the South Australian Department of Agriculture says that once the stock mortgages are paid the net income from that property is $8,000? The Government is saying to the person concerned that out of that $8,000 he must pay a pension to his parents and keep a wife and four children. Clearly it is a scandal and this legislation should be allowed to remain unamended. The discretion should be left, as it is now, with the Department. In my view, there are three options. First, the Government could leave the law as it is, which clearly is the option favoured by the Opposition as expressed in our amendment. Secondly, and alternatively, the Government could give an undertaking that the new rule deeming a 2.5 per cent income from assets will apply only to new pension applicants. It will allow those who have successfully proved on lodged claims with the Department of Social Security or the Administrative Appeals Tribunal that they have a hardship case to receive a pension. Clearly, the Opposition favours the first option. The second option would be reasonably acceptable. The third option, the one that we fear most, is that the Department will review all of these cases, even where the Administrative Appeals Tribunal has been satisfied that there is hardship and that the assets test should not apply. Our concern is that in those circumstances under this legislation the Department of Social Security will be bound to review the pension, and that in such cases those people will have their pension revoked and will be forced to sell the land from under their children's feet, and their children will in all likelihood be forced on to the unemployment benefit. I believe that the net cost to the community will be much higher. Madam SPEAKER —Order! The honourable member's time has expired. Mr RONALD EDWARDS(Stirling)(8.05) —The Social Security and Veterans' Entitlements Amendment Bill (No. 2) and the cognate Bill are significant in the Government's strategy. Reference was made to these matters in the Budget because we believed that we needed to do something substantial and fundamental in respect of the standard of living of people in the community, particularly if it could be demonstrated that living standards for some had begun to fall. Let me take the picture back a little further and sketch what I believe is the fundamental element in our approach to standards of living. The Opposition seems to miss this point whenever it seeks to address these matters. We have held it to be fundamental that housing is important in establishing living standards. I shall deal with the social security aspects in a moment. Consequently we have directed a good deal of effort towards establishing housing in both the private and the public sector. We have achieved great success in the number of homes built and the number of people who have taken over those homes. The fundamental point that can be demonstrated about this country and standards of living is that when one gets people into homes it immediately transforms their lifestyles. It gives them a stake in the community which they might not otherwise have. Therefore, any debate on social security and the rights and entitlements of people in the community and the Government's duty to meet those rights and entitlements must be underpinned by the philosophical view one takes about housing. Our philosophical view is that housing is a fundamental. The other philosophical view the Government has is that employment is a fundamental. When one considers the record that this Government has been able to establish, one can look by the end of 1988 at a substantial increase in jobs-indeed, a million new jobs since 1983. As a new member of parliament in 1983, I found the projections that we were making about jobs quite impressive. I now find in retrospect that we were able to achieve our target and go well beyond it. Therefore, the second part of any debate about living standards and the rights and entitlements of people in the community must be underpinned by a view about employment. The second characteristic that Labor members can point to is that this Government has a very good employment record. The third characteristic that sets us apart from the Opposition in this debate is that if one has limited resources and an economy in which one has to make some tough decisions it is important that those limited resources go to areas in which they can be most effective. We have attempted to put together a social security policy that aims to address need. That is not without difficulty. When one approaches social security policy and seeks to direct resources to those most in need, one knows that one will also not give resources to those who, in the Government's judgment, are not so greatly in need. We have made that judgment in a number of areas; we have certainly made it with respect to pensions and the assets test of which the honourable member for Barker (Mr Porter) has spoken. In doing so, we have been able to say that, given a limited resource base, if one addresses those most in need on can feel satisfied at the end of a period that one has done something substantial in changing living standards. Previous Labor speakers in this debate have given great detail in this respect and their speeches have been impressive. One factor which characterises our success in addressing the area of need has been the change in the pension rate. We are now looking at a pension of 24.8 per cent of average weekly earnings. It is a wonderful achievement and our target is to get the figure towards 25 per cent of average weekly earnings. In this third element of policy, when one tries to address the area of need, one seeks to award pensions where they are most needed. The other side of the coin which disturbs me is that the Opposition for a good deal of its time is preoccupied with those who may no longer get a full entitlement to pension. As I said earlier, it is entailed by the decision that one seeks to address those who are most in need. There will be some people one sees as not being in great need. The Opposition continually makes the point that it is concerned about those who no longer receive those entitlements. What we find surprising is that Opposition members never spend any time talking about those who have been aided, those who are at the lower end of the economic spectrum. The electorate makes judgments from time to time. It has made a judgment three times since I have been a member of this Parliament. The electorate has found the Opposition policy somewhat wanting. Having addressed the areas of need more powerfully than was the case in the past, we find that we still need to make some adjustments. That is what brings me to one of the elements of this policy, the new family package. Given the change in the nature of Australian society and the economy, we have deduced the fact that large numbers of people need an injection of money to lift their living standards. From the research that has been undertaken we know that this group of people tends to be characterised by large families. They tend to live in large suburbs which many honourable members on this side of the chamber represent, the western suburbs of Melbourne and Sydney for instance. If we are able to address this area of need-evidence is available that families in the private rental market are even worse off-in terms of money we might go a long way towards solving some of the immediate economic problems these people face. That is what this legislation is about. Having considered the issue of housing as a fundamental underpinning and having done something to make housing available, having considered the area of unemployment and having tried to make jobs available and then having said that, given limited resources, we will direct those resources to the areas of greatest need, despite the political fall-out that might entail, we then came to the conclusion that we needed to do something else in terms of an injection of funds. As I have said, my colleagues have addressed those matters very eloquently. It would be wrong to try to cover their ground again. It is important to mention how well my colleagues have covered this area, including references to former New South Wales Premier Lang. I found that a very impressive historical testament. The Opposition still does not seem to have learnt the lesson that it is all very well for a policy which focuses on need and which concentrates on those who may have missed out in the process but we should remember that a substantial number of people have gained in the process. We still hold the view that we have a responsibility to them, particularly in difficult economic circumstances. One of the things that characterise this economy now, given the difficulties of economic management, as distinct from the economies of Great Britain and the United States, is that we do not have the degree of social division that characterises both of those societies. People in economics such as I might want to dwell upon global statistics but when it comes down to it one has to ask oneself how healthy a society is as a consequence of its government's policy making. On the barest possible analysis Australian society is far healthier because of the lack of the social division that characterises Britain which now fundamentally has two economies, the economy of the north which is depressed and the economy of the south which, at least in terms of the yuppies, was booming three weeks ago. The United States economy can be characterised in regions. Nevertheless, what fundamentally underpins United States society in terms of all the social statistics is that it is a divided community. All Government members can feel satisfied that we have addressed the fundamental elements of housing and jobs, and the areas of need. In so doing we have a community that is not characterised by widespread social division. It is always possible to point to problems but they exist in any large community. If we look at the overall structure we can feel pleased and somewhat proud that we have achieved major economic changes without producing social division. That is not easy in this world, particularly given the changes in economic activity. In addressing the areas of need, one of the areas we still need to look at in regard to senior citizens is that very often superannuitants, for example, because they do not have entitlements to fringe benefits, in final terms may end up a little worse off than people who are on the full pension. What we ought to be examining is our attitude to the aged. It has been examined in part here impressively. We have made some changes to fringe benefits entitlements and in terms of extra earnings, what is called the Father Christmas clause, which is a very good move. We can do two things. Firstly, like many communities we ought to honour the aged. We ought to make the fact that one turns 65 years of age something to be respected. Many other countries do it, and do it well. Secondly, we ought to give senior citizens a senior citizen's card. Mr Free —The Edwards card. Mr RONALD EDWARDS —Yes. The card could say, in effect, `You have now turned 65. You are a senior citizen of Australia. This card will entitle you to a limited range of fringe benefits'. Those benefits could include certain entitlements with respect to the telephone rental allowance. State governments could also give senior citizens an entitlement to a reduced fare or even free off-peak transport on trams, trains or buses. Certainly in regard to movie theatres and sporting associations there could be entitlements. I have already discussed with the Western Australian Cricket Association, the Western Australian Football League and the Hoyts cinema chain whether they would recognise that sort of card. It would not be a great cost to the community. A large monetary element is not involved. My friend and colleague the honourable member for Lindsay (Mr Free) acknowledges that. We should examine the idea of a senior citizen's card. Once people turn 65 we could offer them an indication that we believe that is an important achievement and give them rights and entitlements they might otherwise not get. It would do something to even out some of the slight anomalies that occur between superannuitants and those who are on the full pension. If we implemented this proposal in co-operation with State governments many people would welcome it. I say that in the context of this debate. Having made all the decisions I have talked about, particularly in relation to the basic economic entitlements of housing and jobs and having addressed the areas of need, we are in a better position to address these matters. The senior citizen's card package could well be negotiated with State governments and with the appropriate private sector operatives. If we could do this at this level of government many people would feel that we had done a great deal. We might well make it a bicentennial project. If we had a senior citizen's card we might be able to negotiate a deal with the airlines. I have already made some tentative inquires with the airlines. During 1988 a person who possessed a senior citizen's card might well get a trip to Canberra to view the new Parliament House. The airlines could use some of their spare capacity to enable this. Many elderly people in Australia, particularly those from outlying States, such as Queensland, which my colleague the honourable member for Bowman (Mr Sciacca) represents, and Western Australia, which I represent, would deem it a privilege to be able to come to Canberra and view their new Parliament House. If the senior citizen's card were in place entitling a card holder to come to Canberra using the standby capacity of an airline-many standby seats are available-or a similar arrangement with bus companies, we might well find that we could build many bridges in the community. Many people think that the Parliament House we are moving to is an expensive enterprise and one they want to see some value from. One way to guarantee that they see some value from it is to make it possible for everyone over the age of 65, through having a senior citizens card, to come to Canberra and visit the new Parliament House as a bicentennial project. Mr Free —And the Senate, too. Mr RONALD EDWARDS —As my friend says, we could show them that there was activity in the Parliament by getting them to visit both the House of Representatives and the Senate. They would learn a lot more about the operation of Australia's national government and Parliament. We have the opportunity to look at this idea of mine of a senior citizen's card-and I have discussed it with Caucus colleagues-as a 1988 project. The Minister for Social Security (Mr Howe), in discussion earlier this year, indicated to me that a number of steps needed to be taken. One of those steps was to look at the earnings-free area. That area has been looked at, and I think that is very important. Mr Free —A great reform. Mr RONALD EDWARDS —It is a great reform because it means that people will no longer lose their pension entitlement because they have short term earnings. People might work at the Melbourne Show or the Sydney Show or they might work as a Santa Claus and lose their pension entitlement. Incidentally, I think I should make it clear in this debate that the decision that caused pensioners' incomes to be in peril because of short term earnings was a decision not of the Government but of the Federal Court of Australia. It arose out of a number of other matters. There was a tendency for a number of people to see that decision as something that was just brought about by this Government. In fact, it was not. It was a decision by a court which, looking at the legalities of the matter, ruled that we were not entitled to overlook those extra earnings. What we have done is reinstate that element in this legislation, and I believe that to be very important. It also indicates that this Government is responsive. Previous speakers, including the honourable member for Barker, have said that the Government is not responsive. This Government is responsive to these issues in the community. Summing up, I believe that what we have attempted to do, in terms of this legislation and in terms of our overall strategy, is to address the economic fundamentals. Those fundamentals relate to such matters as housing and employment. They also relate to this Government's ability to direct resources to areas of need. In the current economic crisis, which has been of concern to everyone in the community, one of the things that has been very satisfying is that we have not been overtaken by a sense of the 1930s. The big thing that has characterised this period, as distinct from the 1930s, has been people's knowledge that their income is secure, particularly if they are social security beneficiaries. The other thing to be noticed already is that people's jobs have been secure, and that is also in marked contrast to the 1930s. One of the lessons that we in this Government have learned-and it has not always been an easy lesson-is that, when we do have to make tough decisions about social security recipients and apply these needs-based policies, it will always be the case that some people will be put under pressure because they will miss out. But it is also clearly demonstrable that in so doing we have ceased to pay pensions to some people who clearly never needed them. I know that a lot is said by the Opposition in this place about the assets test. The Opposition still holds the view that it would repeal what I would regard as the socially progressive elements in our policy. Perhaps Liberal members should talk to the President of their Party because clearly he is a little more attuned to the socially progressive elements of the policy that we have put in place. It has not been without cost. The cost has been the effort put in by Ministers and backbenchers in explaining it to people. But this should be considered in conjunction with tax reform. I conclude my remarks by saying that the view put by the Australian Council of Trade Unions is that these decisions, particularly in relation to the family allowance supplement, are better than a wage increase. They clearly are, because they are directed to those in need, they do not have the highly inflationary aspect that a wage increase would have had and they leave us with the conviction that we are getting to the areas of need. Mr Free —And they are tax free. Mr RONALD EDWARDS —As my colleague points out, the supplement is also tax free, so in fact the maximum benefit is going to the areas of greatest need. I am pleased to be able to make these remarks in relation to this legislation. It is just a further example of us putting in place policies that are directed and sensible. Accordingly, I am pleased to commend these pieces of legislation to the House. Mr NEHL(Cowper)(8.25) —In rising tonight I must say that I am very pleased to make a contribution to the cognate debate on the Social Security and Veterans' Entitlement Amendment Bill (No. 2) and the Health Legislation Amendment Bill (No. 2). I will be making my contribution in the area of social security and veterans' entitlements. Before commencing I would like to take this opportunity, because it is the first time I have had the opportunity of speaking while the current Minister for Veterans' Affairs (Mr Humphreys) has been at the table, to congratulate him on his elevation. I was one of those who were pleased to see him receive that mark of his ability. I would, of course, prefer to see him as a shadow Minister on this side of the House. Be that as it may, I offer him my personal goodwill for the job he is doing. I would like also to congratulate the honourable member for Stirling (Mr Ronald Edwards) on his contribution to tonight's debate. I think it is quite significant that he spoke for the full 20 minutes without reference to a single note. It was his usual performance. But I regret that I have to take issue with one or two of the things the honourable member for Stirling said. Madam Speaker, it will come as no surprise to you, to him or to anybody else in this place that I might just happen in passing to have a word or two to say about the assets test. The honourable member for Stirling described it as a socially progressive policy with a great deal of cost in effort by Ministers. I would like to suggest that the real cost has been to elderly citizens of Australia. I will develop that particular theme as my time proceeds. The honourable member for Stirling also made some reference to an earlier speaker on the Government side. He referred to his citing an impressive historical example in referring back to Jack Lang in the 1930s. Mr Free —The 1920s actually. Mr NEHL —I thank the honourable member very much and accept his correction. I was also listening to other speakers on the Government side in this debate. The honourable member for Forde (Ms Crawford), in a not very impressive historical example, placed the blame for all of the current ills of Australia on the Menzies Government. We in this place are accustomed to, used to and practically bored stiff by the practice of the Government, from the Prime Minister (Mr Hawke) down to the Treasurer (Mr Keating), of carrying on with the stale pastry of saying, `It all goes back to the Fraser time; it is the Fraser-Howard Government or the Fraser-Anthony Government'. This stale pastry has been trotted out sitting day after sitting day, week after week, ever since I have been elected. But I really thought the honourable member for Forde carried it just a little too far in laying all the blame at the feet of Sir Robert Menzies. Getting back to the veterans affairs part of this legislation, I must say that I really welcome the action which is removing the anomalies associated with the totally and permanently incapacitated (TPI) pension following the decision of the Federal Court of Australia in August 1987. Honourable members will recall that that decision had the impact of making it not just likely but legal under the existing law that TPI pensioners would lose their TPI pension at the age of 65 years. Of course, that created an enormous amount of anguish and a great deal of distress among the veterans community, particularly among those of our fellow Australians in receipt of the TPI pension. Again, I commend the Minister at the table for his prompt action, not just in having that effect set aside in this legislation but also for making the announcement as soon as he possibly could after consultation with his Cabinet colleagues so as to relieve the distress of so many elderly Australians, people for whom I have a great deal of sympathy. I have a total commitment, intellectually and emotionally, to the veterans community in this country. I know, from first-hand experience of my family, the commitment made by veterans. I would just like to echo the words of the honourable member for Fairfax (Mr Adermann), who spoke earlier in this debate and who said, as I have said here before on many occasions, that the TPI pension is not so much a pension as it is compensation. It is a commitment made by successive governments in this country of all political colours. It is a commitment that must be maintained and cannot be moved away from. I am also very pleased with the extension of full entitlements to World War II ex-service women. I say in passing that that was coalition policy at the last election and I am very pleased indeed that the Government has taken up that policy and brought it into effect. It is worth noting, too, that World War I ex-service women were extended these benefits in 1958. While it is a bit of a case of better late than never, I am very pleased that these benefits are now being extended to World War II ex-service women. But, at the same time, I note that the Returned Services League of Australia is concerned that this clause does not refer to ex-service women who were warned for active service and embarked but did not actually serve in a theatre of war. I would have thought that this extension of benefits could easily have been made. We on this side of the House are quite concerned that service women who served in Korea, Malaya and Vietnam have been excluded from this amending legislation. With all goodwill, I invite the Minister for Veterans' Affairs to relook at that point. I am told that it would affect only 150 women and that, if those 150 women claimed absolutely everything to which they were entitled, there would be a maximum cost of $65,000 per year. I must say that I am quite concerned that for such a limited amount of money we are excluding ex-service women who served in Korea, Malaya and Vietnam. I note, too, that the Returned Services League is concerned that no provision has been made for the payment of interest on payments to entitled veterans who have had pensions withheld for some reason, whether applications were awaiting determination or held up in the Department of Finance. It is probably fair to say, not only for veterans as in this case but also for other people in Australia, that what is good for the goose should be good for the gander. For instance, if any of these people are late with a taxation payment, there is an automatic fee of interest of 20 per cent. It is quite reasonable and fair and in the spirit of a fair go that anybody having his pension withheld for some reason should have interest paid to him on the outstanding moneys owed to him. I am really very concerned about what is likely to happen with the assets test. As I have done on many occasions in this House, I repeat that the Opposition, the National Party of Australia and the Liberal Party of Australia, has a total commitment to abolish the assets test on pensions when they return to government. That is a commitment from which we will not waiver. Mr Ronald Edwards —How does John Elliott feel about that? Mr NEHL —The honourable member will have to talk to John Elliott. He is not in this Parliament. I say again that the policy of the coalition, of the Opposition, is that the assets test on pensions will be repealed. I have been very concerned about this ever since before being elected to Parliament. I am concerned that so many of our elderly citizens have been placed in a situation of distress. It particularly applies to people in the farming communities, in those parts of Australia outside the capital cities. We have the unfair situation that somebody with 200 or 300 acres in my electorate can lose the pension because of that, yet somebody else in Vaucluse or some other place, with a house worth $1m, can still get the pension. Since the Minister for Social Security (Mr Howe) is here, I would like to make reference to one of the matters which he raises constantly in debate whenever the assets test is raised. Just as I have a view, I note that he has his. I respect his view but I do not respect the way in which he keeps floating out the position of the 12, 16 or 32 millionaires. I for one must say that I do not really think that somebody who is a millionaire should necessarily get the pension, although the Minister would say that, if a person is a millionaire in terms of assets in a harbourside house, that person should get the pension. The reality is that I am not concerned about those millionaires that the Minister trots out. I agree with him that it is inappropriate for them to get the pension, but I do not think he is correct, right or fair in trying to demolish the debate or the arguments about the assets test as it affects ordinary Australians just because of the few outstanding exceptions. Of course, what will happen with this amending Bill is that it will open up access to the hardship provisions but will also tighten the application of the assets test. The new provision requires as a matter of law the pension calculated under the financial hardship test to be reduced by the greater of 2.5 per cent per annum of the value of property disregarded under the test, or the income which could reasonably be expected to be generated by the use of property disregarded under the test if the property is used commercially, that is, efficiently and economically. The honourable member for Dobell (Mr Lee), when he was speaking in the debate, rolled out the old canards, the stale pastry, about the millionaires. For some reason that I could not really understand, he started talking about pensioners driving BMWs and Saabs. I just could not see the relevance of that. We are not talking about people driving BMWs and Saabs. We are talking about elderly Australians who have made their contribution to this country, who have worked hard all their lives and are still being dispossessed by the assets test. Clause 11 (3) (c) seeks to amend sub-section 7 (1) to impose a further limitation on the application of the financial hardship test to beneficiaries. That test would exclude property of a beneficiary from the normal operation of the assets test only if the beneficiary or the spouse of the beneficiary could not sell or realise the property and could not use it as security for borrowing. The explanatory memorandum states: Accordingly, if there is a market for the property, that property would not be excluded. That is a most significant phrase: Accordingly, if there is a market for the property, that property would not be excluded. But the question must be asked: at what price? There is always a market for property if it is cheap enough, if it is going to be thrown away. Is the intention of the Minister and the Bill to force people to sell out at ridiculous prices just to stay alive because they do not measure up? I ask that question again: at what price will they be forced to sell? I am also very interested in the prospect of the application of the assets test to unemployment and sickness beneficiaries over 25 years of age. The explanatory memorandum states: The test would be similar to the current pensioner assets test, although broadly once the assets threshold was reached, benefit would cease to be payable. This measure would come into effect on 13 December 1987. I can see some virtue in what the Minister is trying to achieve with this measure, but, again, I see a great deal of danger. There is no time limit, no period of waiting to see what will happen, once somebody becomes unemployed. We could have the situation of somebody becoming unemployed and, because of the property he holds, being assessed as unable to get the unemployment or sickness benefit and being immediately forced, therefore, into selling off property. What would be the effect on the family if in six weeks, two months or six months the man again gets a job? Mind you, I must say that, under the present economic policies, that is not very likely because, if that person is in his forties or fifties, the likelihood of his getting another job is, unfortunately, very remote indeed. This is something that causes me a great deal of concern. I briefly repeat the point that, if there is a market for the property, that property would not be excluded-but at what price? Are we to force people who lose their job to flog off their assets for virtually nothing in order to survive? I do not think that that is the Minister's intention. I hope he will look at this aspect of it and reconsider it. There may be an anomaly in terms of the assets test being introduced on the payment of unemployment, sickness and special benefit to people over 25 years of age. The second reading speech states: Under the assets test, benefit will generally not be paid to people whose assets exceed a specified amount. The amounts are the same as those used for the pension assets test. For a married home owner it is $59,250, or $118,500 combined. I do not have time to cite all the figures. I wonder what will happen when a married man with a wife, children and a mortgage has to sell assets and is subjected to the same assets test as a married couple. I think that there may be a problem there. It seems, on listening to the honourable member for Stirling-I said when I started that I appreciated his contribution to the debate-the honourable member for Forde and the honourable member for Dobell, that there is a belief on the Government side of the chamber that the Australian Labor Party has a mortgage on compassion and caring. I assure you, Mr Deputy Speaker, the Minister and the people of Australia that that is not the case. We in the National Party and our colleagues and friends in the Liberal Party are equally concerned about the people of Australia. We are equally concerned about the poverty which exists. I am most distressed about the long waiting queues for housing in my electorate, which is on the north coast of New South Wales, and the 25 per cent unemployment rate. It is not just 25 per cent unemployment for youngsters; it is for people in their forties and fifties whose chance of getting another job is very remote. I think it is appropriate to say at this point that the family package provisions put forward by the Government will help many people. I do not propose to take the time of the House by singling them all out. Government speakers have done that. They have praised those things very well indeed. But I would like to raise one particular point. The Minister, in his second reading speech, referred to the job search allowance. I am pleased to see what the Government is doing here because I believe-although I am sure that the Minister will disagree with me-that this is an indication that the Government has finally admitted that Priority One: Young Australia has failed. I regret that that is the case. The Minister for Social Security may laugh. He will have an opportunity to tell me how many jobs have been created under Priority One. I see that he is shaking his fingers to indicate that he will do so. When the Minister tells us how many jobs have been created, perhaps he will tell us what the target and the time span were. Unfortunately, Priority One has failed. The Minister said: The job search allowance will replace unemployment benefit for 16-year-olds and 17-year-olds in January-it will make it very clear that income support is closely tied to the need for young people to be better prepared for the work force. I totally endorse what the Minister said about the need for young Australians to be better prepared to enter the work force, but I ask him-he may be able to answer very simply-when those people come off the unemployment benefit, because he has said that the job search allowance will replace the unemployment benefit, will they be taken off the unemployed list? Will they be taken away from those who are counted? Is this an artificial means of reducing the unemployment statistics? I think that that is a fair question and I would appreciate an answer. I find quite a lot to agree with in what the Minister said. For instance he said: We cannot let our young people waste their potential. The job search allowance aims to give them a helping hand in constructive ways. I will support the Minister and the Government in any practical means of helping to find more jobs for young and more mature people in this country of ours. Our unemployment is totally unacceptable. I look forward to the time when kids can leave school, as they are doing now because some have finished their higher school certificate, with the expectation of having a job and a career that is surely the birthright of all Australians. Mr HOWE(Batman-Minister for Social Security)(8.45) —I thank Government and Opposition members for their contribution to this cognate debate on the Social Security and Veterans' Entitlements Amendment Bill (No. 2) and the Health Legislation Amendment Bill (No. 2). As the honourable member for Cowper (Mr Nehl) has just suggested, Government members concentrated their attention largely on the reforms included in the legislation in terms of family assistance. I endorse much of what they said regarding the importance of these measures. I am sure that honourable members on both sides of the House welcome the targeting that is involved in the assistance and the very substantial assistance we have provided not only to pensioner and beneficiary families but also to low income working families. The honourable member for Stirling (Mr Ronald Edwards) referred to the issue of a senior citizen's card. That is a matter which has been close to his heart for some time and the Government will give consideration to it. The Opposition concentrated its criticism of the legislation on the introduction of the benefits assets test and the 2.5 per cent deeming rule which has been written into the legislation. Ordinarily, the assets test imputes income at the rate of about 10 per cent of the value of an asset. Where this results in hardship, there is a discretion to reduce the level of imputation. That is done on a discretionary basis. I think honourable members will recognise that the Government's decision regarding hardship and its decision to allow that administration to proceed administratively as opposed to legislatively has caused some problems in terms of the Administrative Appeals Tribunal's decisions. The honourable member for Barker (Mr Porter) suggested that the new measure was somewhat harsh, but the Government has to ensure, when it does provide for hardship, and provides effectively for some discretion in relation to the assets test, that that discretion will be honoured in practice. Effectively, we are aware that in terms of the Administrative Appeals Tribunal decisions the hardship provisions were being circumvented. While the honourable member may suggest that, relatively speaking, we are talking about a small amount of money, the reason this Government has been more successful, if I may say so, in terms of managing the economy and achieving Budget outcomes, is that we have worried about what the honourable member has described as relatively small amounts of money. There is no question that a farmer who had retained a valuable farm, even though it was not producing income, because he wanted to hand it on to his children when he died, and when no income was imputed, even though he had a capacity to support himself by selling or mortgaging the farm, was not required to sell or mortgage it. Rather, the public purse was being called on to support him because, effectively, he wanted to keep the farm to hand on to his children. From time to time crocodile tears are shed on the Opposition side of the House with respect to the assets test. I think that that is seen to be the case if one recognises that, generally speaking, very many people are in the social security system who are certainly not asset rich. Indeed, one of the characteristics of poverty in this country is the absence of assets. The rules with respect to the assets test exclude the family home. People may have very substantial assets by any standard and not entirely lose the pension. The pension system is there to make sure that Australians have adequate income support. It is not there to subsidise inheritances. If people are concerned about retaining the family farm within the immediate family there is provision by way of the pensions loan scheme. The full pension can be paid and the public can get reimbursement when the pensioner and his or her spouse die. The pension loans scheme is a fair and equitable way of looking after these cases. I enjoin honourable members who are genuinely concerned about what they say they are concerned about-that is, the protection of the family farm or the non-disturbance of a family who has been associated with the property for a long time-to recommend that the pension loans scheme be made more use of in those situations. The Government makes no apology-and we certainly make no apology in the context of the difficult times in which we have operated-for targeting our expenditure to those who have the greatest need. If I might say so, members of the National Party of Australia repeatedly suggest in this House that $2m or $3m is an amount of money with which the Government ought not to concern itself. The honourable member for Fairfax (Mr Adermann) suggested essentially that an amount of money of the order of $70m was not worth the Government being concerned about. The honourable member for Bradfield (Mr Connolly) and the honourable member for Moreton (Mr Donald Cameron) criticised the benefits assets test. It is true that in some respects it is somewhat tougher than the assets test on pensions. Of course, one has to recognise that we are talking about a different kind of payment. Benefits tend to be essentially short term. A person with substantial assets without income for a short period is not, comparatively speaking, badly off. The situation is very different for pensioners who are often on a pension for 20 or 30 years. Administrative reasons played a part in the decision to go for the sudden death assets test. Administratively, it is a much simpler test. The assets test effectively imputes income to a pension proportioned to the values of the asset. As I indicated, the benefits income test is harsher than the pension income test. However, it applies exactly the same principles as the pensioner assets test. The benefits assets test is necessarily, therefore, sudden death. Because of the harsher income test on benefits that the assets test applies, there would be no entitlement to benefits. Any other arrangements would be anomalous. Several other questions were raised in the debate. I took note of the concern of the honourable member for Fairfax about the older unemployed. I draw his attention to the second of the social security review papers, which specifically dealt with the older unemployed and made a number of suggestions about ways we might provide more effective assistance to that group of people. The Government will consider those next year. The eligibility of theological students for Austudy is a matter for my colleague the Minister for Employment, Education and Training (Mr Dawkins). I will raise that matter with him. I simply make the point that in the Review of Social Security we will be looking at the relationship between income support payments and labour market programs. Questions of eligibility for payments as an alternative to unemployment benefit are a major focus of that concern. In that context it would be possible to examine the concern of the honourable member for Fairfax. Several matters were raised with respect to the Health Legislation Amendment Bill (No. 2). The honourable member for O'Connor (Mr Tuckey) requested clarification of the Government's intention concerning the extension to 31 December 1988 of pensioner health benefits for some persons as a result of changes to their eligibility consequent on the May economic statement. Sole parents with full time dependent student children aged 16 to 24 who lose eligibility for the supporting parent's benefit or class A widow's pension between 1 September and 31 December 1987 because of the change in the definition of `qualifying child' are to retain entitlement to pensioner health benefit cards until 31 December 1988. These persons were, of course, given short notice of the change. In recognition of this and to allow the sole parents to adjust to the changed financial situation and to plan for the future, the Government decided to extend eligibility for fringe benefits to the end of 1988. I understand that the honourable member for O'Connor also raised the matter of the deletion from 1 August 1987 of items for the removal of keratosis, warts, et cetera, from the Medicare benefits schedule. It is not a subject matter dealt with in the Health Legislation Amendment Bill but is the subject of much complaint by doctors and patients. The removal of these items was originally difficult, time consuming and mainly performed by specialists. Changed technology has meant that the majority of these conditions are now treated rapidly and painlessly by general practitioners during consultation. The old fee was for a procedure; the new fee is the appropriate consultation fee only. A separate item to cover the removal of large numbers of difficult warts is to be considered for inclusion in the Medicare benefits schedule. Discussions are being held with the medical profession on this subject. Items covering the removal of skin cancer have not been deleted from the schedule. The Government recognises the need for separate procedures to cover these services. Solar keratoses are removed by techniques similar to those for other keretosis warts and are covered by the appropriate attendance item. Mr PORTER(Barker) —Mr Deputy Speaker, I wish to make a personal explanation. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Does the honourable member claim to have been misrepresented? Mr PORTER —I do. Mr DEPUTY SPEAKER —The honourable member may proceed. Mr PORTER —The Minister for Social Security (Mr Howe) in his response implied that I had said that the Government should not concern itself with small amounts of money. Nothing could be further from the truth. I said that the undermining of the assets test hardship provisions involved in this legislation will have an unconscionably harsh impact on a small number of pensioners and that this new provision ought to apply only to new applicants for pensions. Mr HUMPHREYS(Griffith-Minister for Veterans' Affairs)(8.59) —I thank honourable members for their contributions to this debate, especially the honourable member for Moore (Mr Blanchard), the honourable member for Lindsay (Mr Free), the honourable member for Phillip (Ms McHugh), the honourable member for Forde (Ms Crawford), the honourable member for Stirling (Mr Ronald Edwards) and the honourable member for Dobell (Mr Lee). The debate was very broad ranging. I think it went from Bob Menzies, to Ben Chifley, to Malcolm Fraser, to nursing homes, to agent orange, to repatriation hospitals, to defence service housing, and on and on. I wish to answer questions raised by some honourable members who were concerned about certain aspects of this legislation relating to the Department of Veterans' Affairs and veterans' entitlements. The honourable member for Farrer (Mr Tim Fischer) and the National Secretary of the Returned Services League of Australia (RSL), Mr Ian Gollings, were concerned about certain aspects of the legislation. I asked the honourable member for Dobell to deal with those. I understand that the honourable member for Farrer was not happy with that, and he just wanted my assurance again on certain aspects in relation to section 24; so I will be happy to do that for the honourable member. He has requested an assurance that the distinction between the existing section 24 of the Veterans' Entitlements Act, which is expressed in the positive sense, and proposed new section 24a, which is expressed in the negative, will not change the way these provisions are applied. Section 24 is a test as to whether certain criteria do apply to a veteran. Proposed new section 24a is a test as to whether the criteria do not apply. I am happy to assure the honourable member, and the National Secretary of the Returned Services League, that this will not change the way these provisions apply. The honourable member for Farrer is also concerned about the application day. The application day is the day on which the claim or application is received at an office of the Department of Veterans' Affairs. Proposed new sub-section 19 (2a) will provide that eligibility for a special rate or intermediate rate pension will be determined only on the application day. This will mean that the determining authority will not be able to look at a veteran, say on the application day, and decide that the veteran is eligible on that day, and also look at some later day, such as when the veteran would have ceased work for reasons other than war caused disabilities, and then grant a pension only for the limited period during which the veteran was unable to work due to war caused disabilities. This legislative mechanism will overcome the decision of the Federal Court of Australia in McGuire's case where the court based its decision on its view that eligibility for special rate and intermediate rate pensions is subject to a continuing test. Those cases held that a veteran is entitled to receive the totally and permanently incapacitated pension whilst he continues to satisfy the eligibility criteria, not for life. In conjunction with the other proposed amendments, the inclusion of a definition of `application day' will ensure that special rate and intermediate rate pensions, once granted, are payable for the life of the veteran, subject to the exceptions provided for in proposed new section 24a. The honourable member for Farrer was also concerned that while ex-service women from World War II were receiving full free treatment the Government was not giving the same treatment to ex-service women who served in Korea, Malaya and Vietnam. I would like to point out to the honourable member for Farrer that the Government's decision was in response to a call from the ex-service organisations, particularly the Returned Services League of Australia's resolution 25 of the sixty-ninth National Congress of the RSL, which sought: that all Repatriation benefits (medical and hospital) as allowed to the Returned Sisters of the 1914-18 War be extended to include all returned ex-servicewomen of the 1939-45 War. The RSL has not made out a similar case for returned nurses of later conflicts. On the contrary, the RSL has given assurances that the extension of benefits to this group will not be seen as a precedent for a more generalised claim, but is seen as recognition of special disadvantages suffered. I think the honourable member for Cowper (Mr Nehl) was also interested in that. I hope that answers their questions. The other problem that I refer to was mentioned by the honourable member for Moreton (Mr Donald Cameron). He was very concerned about the Greenslopes Repatriation Hospital. He also mentioned that a certain veteran in Queensland was claiming that the Vietnam veterans were getting special treatment over him. I can assure the honourable member for Moreton, and the veterans community, that the Department of Veterans' Affairs does not discriminate and that it treats all veterans equally. I have given that assurance not only to the veteran concerned, but to all Australian veterans. The honourable member also criticised the Greenslopes Repatriation Hospital and was also concerned about the visiting medical officers dispute. I have made an offer to the visiting medical officers and I hope they will accept that offer. I am sure that everyone will be happy when they go back to their work at the Greenslopes Repatriation Hospital. I would like to point out that the Government, since coming to office, has put in place a $75m capital works program for all repatriation hospitals throughout Australia. I think that is quite a significant contribution. From 1982-83 to 1987-88 Greenslopes received over $20m for minor, medium and major works, and over $9.5m for specialised equipment. So I think we can view with some suspicion the suggestion of the honourable member for Moreton that the Government is not paying attention to the Greenslopes Repatriation Hospital. I once again thank all honourable members for their contributions to the debate. Question put: That the words proposed to omitted (Mr Connolly's amendment) stand part of the question. The House divided. (Mr Deputy Speaker-Mr Leo McLeay) Ayes . . . . . . . . . . . 70 Noes . . . . . . . . . . . 56 —— Majority . . . . . . . . . 14 —— Baldwin, P. J. Humphreys, B. C.Beddall, D. P. Jakobsen, C. A.Bilney, G. N. Jenkins, H. A.Blanchard, C. A. Johns, G. T.Blewett, N. Jones, BarryBowen, Lionel Kelly, R. J.Brown, John Kent, L.Brown, Robert Kerr, D. J. C.Brumby, J. M. Klugman, R. E.Campbell, G. Lamb, A. H. (Teller)Charles, D. E. Langmore, J. V.Charlesworth, R. I. Lavarch, M. H.Chynoweth, R. L. Lee, M. J.Cleeland, P. R. Lindsay, E. J.Courtice, B. W. McHugh, J.Crawford, M. C. Martin, S. P.Cross, M. D. Mildren, J. B.Cunningham, B. T. (Teller) Milton, P.Darling, E. E. Morris, AllanDubois, S. C. Mountford, J. G.Duffy, M. J. O'Neil, L. R. T.Duncan, P. Price, L. R. S.Edwards, Ronald Punch, G. F.Fatin, W. F. Saunderson, J.Fitzgibbon, E. J. Scholes, G. G. D.Free, R. V. Sciacca, C.Gear, G. Scott, J. L.Gorman, R. N. J. Simmons, D. W.Grace, E. L. Snow, J. H.Griffiths, A. G. Snowdon, W. E.Hand, G. L. Theophanous, A. C.Harvey, E. R. Tickner, R. E.Holding, A. C. West, S. J.Hollis, C. Willis, R.Howe, B. L. Young, M. J. Adermann, A. E. Jull, D. F.Aldred, K. J. Katter, R. C.Andrew, J. N. (Teller) Lloyd, B.Beale, J. H. McArthur, F. S.Blunt, C. W. McVeigh, D. T.Braithwaite, R. A. Macphee, I. M.Brown, N. A. Miles, C. G.Burr, M. A. Millar, P. C.Cadman, A. G. Moore, J. C.Cameron, Donald Nehl, G. B.Cameron, Ewen Peacock, A. S.Cameron, Ian Porter, J. R.Carlton, J. J. Prosser, G. D.Cobb, M. R. Reith, P. K.Connolly, D. M. Robinson, IanCowan, D. B. Rocher, A. C.Dobie, J. D. M. Ruddock, P. M.Downer, A. J. G. Shack, P. D.Edwards, Harry Sharp, J. R.Fife, W. C. Shipton, R. F.Fisher, Peter Sinclair, I, McC.Goodluck, B. J. Smith, W. L.Hall, Steele Sullivan, K. J.Halverson, R. G. Tuckey, C. W.Hawker, D. P. M. White, P. N. D.Hewson, J. R. Wilson, I. B. C.Hicks, N. J. (Teller) Woods, R. L.Hunt, R. J. D. Wooldridge, M. R. L. Staples, P. R. MacKellar, M. J. R.Kerin, J. C. Webster, A. P.Beazley, K. C. Fischer, TimWright, K. W. McGauran, P. J.Hayden, W. G. Spender, J. M. Question so resolved in the affirmative. Amendment negatived. Original question resolved in the affirmative. Bill read a second time. Message from the Governor-General recommending appropriation announced. The Bill. Mr HOWE(Batman-Minister for Social Security)(9.14) —by leave-I move: (1) Clause 41, page 36, lines 4 and 5, omit the definition of ``parent'', insert the following definition: `` `parent', in relation to a person (in this definition called the `child'), means another person who is: (a) a natural or adoptive parent of the child; (b) acting as the child's guardian on a long term basis; or (c) the spouse of such a parent or guardian; but does not include another person: (d) with whom the child does not live if the child is living with a different person to whom paragraph (a), (b) or (c) applies; or (e) who the Secretary decides, in the special circumstances of the case, should not be treated as a parent of the child;''. (2) Clause 109, page 67, lines 22 to 24, omit the note in italics at the foot of subclause (2), insert the following note: ``Commencement: Immediately after the commencement of the provisions of the Veterans' Entitlements (Transitional Provisions and Consequential Amendments) Act 1986 (other than section 61 of that Act)''. There are only two amendments. The more substantial amendment is to clause 41 of the Social Security and Veterans' Entitlements Bill (No. 2) which deals with a problem with respect to the definition of a parent. For the purposes of the parental income test the definition is not entirely accurate. It picks up only natural parents, whereas it should pick up social parents-that is, those who normally act as parents. The amendment seeks to make clear who those social parents are. First, natural parents are covered as well as adoptive parents. Secondly, persons acting as guardians are covered. Thirdly, the spouse of such a parent or guardian is also covered. This makes up the range of people who might be regarded as parents. This means, however, that a person could have up to six parents, which is an absurd result. Accordingly, the new definition enables flexibility in identifying the appropriate parent or parents. The mechanism used is discretionary in nature to allow a common-sense approach to be taken in the matter. Of course, a decision taken as to whether a person was a parent would be subject to appeal in the normal way. An explanatory memorandum has been circulated to honourable members concerning this change. Mr CONNOLLY(Bradfield)(9.16) —The Opposition does not object to the amendments that have been moved by the Minister for Social Security (Mr Howe). However, I would like to take this opportunity to re-emphasise the point I made this morning-that is, Australia now has the most anti-family, anti-child tax system in the Western world. We are now the only Western country not to have a comprehensive tax relief package which recognises the cost of raising children. The Government has failed to integrate effectively its social security and taxation policies to obtain the necessary national goals which it claims. In fact, the Social Security Review pointed out that Australia's taxation related assistance, including allowances for families with two children, is only half the average provided by other Organisation for Economic Co-operation and Development countries. Yet we have seen over the last five Budgets a consistent attempt by the Government virtually to remove from the taxation system the last vestiges of the programs which have been in place since the days of the Menzies Government, to the effect that people should be looking for vertical as well as horizontal equity in matters such as family relief. In 1951 tax relief for the taxpayer on average weekly earnings with a dependent spouse and two children stood at 21.58 per cent of average weekly earnings. By 1987 this had fallen to 3 per cent, a decline of nearly 20 per cent. Therefore, the relative tax position of middle income families in Australia has been savagely eroded during the last four years because of the Government's failure to increase or index the family allowance, the decision last May to means test the allowance, and the abolition of concessional tax rebates for education and medical expenses. As a result of the Hawke Government's policies, even poorer families not affected by means testing have experienced effective tax increases of several hundred dollars a year, and many will not benefit from the Government's poverty package. Historically high mortgage rates have also had a savage impact on family budgets at a time when average real income has fallen dramatically. As I said in my speech on the second reading, when we talk about poverty in Australian society, it is not simply a case of what benefits may be available from the state. One must also take into consideration the likely impact of employment problems, the question of training for opportunities to enter the work force and, perhaps most significant of all, the capacity and ability for financial reasons of individual Australian families to achieve home ownership in our society. While much credit has been given over the years to the fact that we have over 70 per cent home ownership, the simple fact is that over the last half decade the trend is now falling, and more and more families in the lower income areas, particularly in suburbs of Sydney and Melbourne, are finding it extremely difficult to make ends meet and to provide the necessary finance to meet either loan repayments or rent payments. The provision in this proposal to increase the subsidy for low income earning families by a mere $15 a week by way of a rent subsidy will not, frankly, touch the sides of this problem. Consequently, in many respects, the Government's family package has failed to compensate for the decline in real disposable income which has occurred during the term of the Labor Government. In fact, over 40,000 families will be caught by the disastrous poverty trap built into the package by the new marginal tax rates and Medicare. The Prime Minister (Mr Hawke) admitted in the House that the family package would make some lower income families worse off. The imposition of 110 per cent effective marginal tax rates will affect over 40,000 single income families. Yet the Minister has contradicted the Prime Minister and has sought to deny the fact that there will be, and are, serious poverty traps in the proposal in the family package which must be addressed. The Minister has failed to address the real issue of the combined effects of Labor's new tax scales, the 20c in the dollar Medicare levy and the 50c in the dollar clawback on family allowance supplements which create a poverty trap for one in 12 low income families targeted by the new family package. Therefore, is it any surprise that the University of New South Wales has pointed out that despite the fact that about a quarter of a million low income children will be better off as a result of the Government's proposal, the fact remains that there will still be some 500,000 Australian children living near or below the poverty line? While the Minister assures us that we are only seeing stage one of this proposal, I trust that in the next two years or so we will see a serious attempt by him and this Government to overcome what still remains a very unsatisfactory situation. To help solve the problems of one third of the children in that situation is significant but, as I said earlier, it is not enough. I draw attention again to the question of the marginal tax rate. Over 40,000 families will be caught by the disastrous poverty traps built in to the Government's family package. Under this new scheme single income families with two children and on $376 a week-which is no fortune, as the Minister is well aware-will actually have 10c less disposable income for every additional dollar they earn. The Minister for Finance, Senator Walsh, has estimated that some 20,000 families will be affected by the 110 per cent- The DEPUTY CHAIRMAN(Mr Mildren) —Order! I ask the honourable member to be relevant to the clause to which the amendments relate. At the moment he appears to be making a second reading stage speech. Mr CONNOLLY —I am not, Mr Deputy Chairman. Having been here for some years, I recall that the normal practice in committee stage debates of this nature is to have a liberal interpretation of the clauses that can be covered. The DEPUTY CHAIRMAN —Normally we speak to the amendments, which in this case relate to clause 41. Mr CONNOLLY —One of the significant points of the amendments that have been moved by the Minister and to which we do not object is the whole question of the definition of `the family'. The family is the very essence of the social structure of this nation and we believe that it must be given far greater support than it has had to date. It is precisely for that reason that we are concerned about the number of major poverty traps that are built into the system. For example, families with two children and on $374 to $390 a week, with three children and on $410 to $437, with four children and on $450 to $480 and with five children and on $490 to $520 will be significantly worse off. This creates a complete disincentive for families in these brackets to increase their incomes, as they will actually be better off if they stay on low earnings and remain dependent on social security. In fact, the Government is giving with one hand and grabbing back with the other. It is typical of the hype of this Government and it is important to add that to the revenue and expenditure sides of its equations. Effective marginal tax rates show the effect that an additional dollar of earned taxable income has on the amount of money that a family has at its disposal. Consequently, deductions from this extra dollar are made by both the taxation system, including Medicare, and the Department of Social Security, through the income test. One of the objectives of this whole package is to tighten up the capacity of individuals in our society to obtain access to social security benefits. While the economic circumstances facing Australia are extremely difficult, the Opposition supports the Government's objective to reduce social security costs where possible, while doing its best to ensure that those most in need will get first priority. Having said that, I point out that there is still a fundamental problem in relation to the way in which these social policies will impact upon the family. I emphasise this point, whether we are talking about the normal father-mother type family unit, foster families or any other combinations. The simple difficulty we face today is the one that the Institute of Family Studies has emphasised so often-that a family with three children must earn more than $40,000 a year to achieve the same disposable income as that of a childless household on the national average wage. In fact, it has become almost a scandal in our social services and tax systems that a two income family without children is substantially better off financially than any single income family earning an equivalent amount. Those are the fundamental issues which the Opposition believes must be addressed. I think I should finish on the point that I made earlier: when we look at all the scientific research information which is available to us and the demographic trends in Australian society at present, we see that there is no reason for complacency. At a growth rate of 0.8 per cent we are now well below the reproduction rate. While some people may claim that we can depend virtually on immigration as a means of increasing our population, the simple fact of the matter is that the aging of the Australian population and the demographic make-up of our society is such that we must look most carefully at what elements of Government policy directly contribute to the formation of Australian families and what elements directly reduce that capacity. Therein lies the basis for the ultimate success of our society and that will be the basis upon which we will be tested by future generations. Mr TIM FISCHER(Farrer)(9.25) —I will not delay the Committee unduly, other than to say that the schedule of amendments now before the Committee includes an amendment to the Seamen's War Pensions and Allowances Act. That amendment to lines 22 to 24 of clause 109 relates to the date of commencement of the legislation and arises from an oversight in the printing and drafting of the commencement date. The Opposition has no objection to this clause. However, I must point out to the Committee that both the parent Act, the Veterans' Entitlements Act which was passed quite recently in May 1986, and the Seamen's War Pensions and Allowances Act-which some honourable members have suggested in recent times should have been done away with by now and brought under the complete cover of the Veterans' Entitlements Act, given the small number of people covered by it-have been subject to a large number of amendments. I know that the honourable member for Gilmore (Mr Sharp) has a particular interest in the fate of seamen in the Nowra end of his electorate. He has to look after many constituents who have a direct interest in this legislation. I want to place on record that in terms of the thrust of all the amendments which are proposed in this important area of legislation dealing with repatriation, it is important that we do not lose sight of the need to ensure that we err in favour of taking proper care of our veterans and that we do not take away proper care, entitlements, benefits and assistance. In this regard, I mention in passing that in the course of a Senate Estimates committee hearing a fortnight ago I arranged for a series of questions to be asked by Senator Walters and Senator Brownhill. I was able to flush out the fact that three officers of the Department of Finance who were sitting at the back during the examination of the estimates of the Department of Veterans' Affairs formed part of a cell or section in their Department which monitored veterans affairs and which drew up a list of cutbacks in relation to repatriation each time there was a mini-Budget and Budget meeting of Cabinet. I forced those three ladies to name themselves so that their names would be recorded in the Hansard record of proceedings. I did so so that we would have a little less anonymity in regard to such proceedings and a little more accountability about what is going on in the area of repatriation in this country today. I have just returned from speaking at a function in the northern part of Canberra at which massive concern was expressed over not only a cell in the Department of Finance but also a cell, at one level, in the Department of Veterans' Affairs in which many young lawyers administer the procedures and the determining system of that Department with scant regard for the ex-service personnel, the World War II servicemen and other veterans. We have to be conscious of the fact that many World War II veterans are reaching a critical age at which they require a great deal of assistance. I refer to a situation where that arose at a hearing last week in Canberra; a double amputee had to fight all the way for a totally and permanently incapacitated pension. There is a lot to be concerned about in this regard. One thing I welcome is that the Minister for Veterans' Affairs (Mr Humphreys) has made a number of clarifications in this chamber associated with the legislation before the Committee. The Opposition is not opposed to the legislation in general terms, but I serve a note of warning that we will continue to do battle in terms of looking after the interests of those who served their country in time of war. Mr WILSON(Sturt)(9.30) —I wish to take part in the committee stage of the Social Security and Veterans' Entitlements Amendment Bill (No. 2) because, as we examine the clauses and amendments and identify the fact that they relate to questions of family and the definition of family and family policy, we have to ask ourselves whether we are looking at the matter in its totality as it affects the future of the nation, or are simply addressing an immediate problem. I do not underestimate the significance of the immediate problem for families on low incomes. However, I am concerned that in the way in which the needs of families on low incomes are being addressed, we are creating a structure which will cause more families greater problems than we will relieve families from their present difficulties. Until the Labor Government came to office there was general acceptance of the view that there should be universal benefits for families. There was a recognition that parents or a parent supporting children should be given some tax allowance, some cash allowance, or a combination of the two, that acknowledged the support that that parent or those parents were providing for their children compared with taxpayers, whether living as couples or living individually, who have no children. Since Labor came to office we have seen the continuous erosion of the benefits being paid to the great body of Australian families supporting children. This has put increasing pressure on them so that in many instances those pressures have been the cause of family breakdown. Such breakdowns have resulted in the need for an increasing number of supporting parents to become dependent on the social security system. Likewise, low income families, because of lack of job opportunities-for the Government has failed to expand the number of job opportunities to make them available to all parents who would like some employment-have not had adequate support. This legislation provides special benefits to those who satisfy a rigorous means test-a means test which, as my colleague the member for Bradfield (Mr Connolly) has pointed out, has very high effective marginal withdrawal rates. In effect, as a result of legislation introduced by a Labor government we are taxing some families at a rate of 110c for every additional dollar they earn. Admittedly, that loss of child allowance and family allowance supplement is time-lagged. By that device the Minister has said, `Oh, there are not really poverty traps because of the time-lag effect'. But if families do, as most families will, analyse the impact on them of the earning of an additional dollar, they will calculate and understand that the family allowance supplement which should be a universal supplement available to all families is being withdrawn at these very high effective marginal rates. Though we have heard a good deal in this debate about the amount that this family allowance supplement is costing the Government and that $500m is being directed in favour of families on low incomes, it is noteworthy that $1,110m is being denied to all families. For if the family allowance had been continued in its universal form and had been updated at the rate at which pensions are updated in accordance with consumer price index fluctuations, all Australian families would be receiving an additional $1,110m. But the great majority of Australian families are denied that support. Therefore, we find, even in the Government's social security review, a lot of attention drawn to the fact that all families are in need. The Government has failed to reconcile two objectives-on the one hand that of alleviating poverty and on the other that of removing the causes of that poverty. The causes of that poverty could, in large measure, be removed if more adequate allowance were made to all parents in recognition of the cost that they bear in maintaining their children. Instead of maintaining the level of support to all families, it is being cut back. Then we say, `Oh we have a poverty problem'. Why do we have a poverty problem? It is because we have not been increasing the universal family allowance to maintain its real value or, in my view, to lift it to a more realistic value related to the cost of maintaining children. Again, many of the studies that have been conducted since the Australian Labor Party came to office have made it quite clear that the amount of support provided, even under the old family allowance system and even if updated in accordance with the cost of living index, would have been inadequate in relation to children of different ages. This is at a time when we have a population crisis. So often we hear the Minister for Social Security (Mr Howe) say that we are confronting a time when we shall have an aging population. We mean by that that out of the total population a higher percentage will be in the retired citizens category than has been or is the case. Why is that? Some might say that it is because people are living longer. That is true, but that has been going on for many years. The real reason why we have an aging population is that we have a failing birth rate. We are not replacing our population. We have a negative population growth. If we had a stable or growing population, as a consequence of a rising birth rate, we would not have such concerns about the aging population. There would be more young people, there would be a higher percentage of children, and, as a consequence, the proportion of the population aged 65 or over would be less. This is a real crisis for Australia. Therefore, we have to ask ourselves whether we want a country that has a stable or growing population or one that is fading away because of its dramatically dropping birth rate. If we want a growing population, we must ask ourselves why the birth rate is failing. These days, it is possible for young couples to choose, and they should have the right to make that choice, family size, child spacing, when the first child is born and so on. But many young couples are being influenced in the size of their families by the economics of our tax and social security system. They know that to have a family of two children it will cost them upwards of $100,000 to carry those children through to over 18 years of age. They know that, as a consequence of the tax and social security system, they will get very little recognition of the cost and resources that they put in to bringing up their families. Until we recognise this fact, we shall continue to have a declining birth rate. While this legislation helps some of our poor today it will, I believe, be one of those social security mechanisms that will cause more people to fall into the categories of need that the Minister is trying to overcome through this legislation. We will overcome them only when we recognise the true value of all Australian children and when we introduce once again a universal family allowance-a tax rebate, a tax credit system; it does not matter what mechanism, as long as the final outcome is the same for the family. The CHAIRMAN —Order! The honourable gentleman's time has expired. Amendments agreed to. Bill, as amended, agreed to. Bill reported with amendments; report-by leave-adopted. Bill (on motion by Mr Howe)-by leave-read a third time. Consideration resumed from 4 November, on motion by Mr Humphreys: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time. Message from the Governor-General recommending appropriation announced. Leave granted for third reading to be moved forthwith. Bill (on motion by Mr Howe) read a third time. [COGNATE BILLS: STATES GRANTS (TERTIARY EDUCATION ASSISTANCE) BILL 1987 STATES GRANTS (TERTIARY EDUCATION ASSISTANCE) AMENDMENT BILL (No. 2) 1987 AUSTRALIAN NATIONAL UNIVERSITY AMENDMENT BILL 1987 CANBERRA COLLEGE OF ADVANCED EDUCATION AMENDMENT BILL 1987 MARITIME COLLEGE AMENDMENT BILL 1987 STATES GRANTS (SCHOOLS ASSISTANCE) AMENDMENT BILL (No. 2) 1987 STATES GRANTS (EDUCATION ASSISTANCE-PARTICIPATION AND EQUITY) AMENDMENT BILL (No. 2) 1987] Debate resumed from 5 November, on motion by Mr Holding: That the Bill be now read a second time. Mr DEPUTY SPEAKER(Mr Leo McLeay) —I understand that it is the wish of the House to debate the Student Assistance Amendment Bill 1987 concurrently with orders of the day Nos 9 to 15. There being no objection, I will allow that course to be followed. Mr CARLTON(Mackellar)(9.44) —Tonight we debate a package of eight Bills arising from the Government's Budget decisions as they affect Australian education and from other policy decisions taken or foreshadowed by the Minister for Employment, Education and Training (Mr Dawkins) in statements in this House. I will not take the time of the House in referring to the normal post-Budget machinery that authorises Commonwealth expenditure on tertiary education and schools for the forthcoming calendar year, 1988, nor will I refer to the routine retrospective adjustments to tertiary and school funding for the current year, 1987, in light of actual cost movements occurring in the course of the year. I will confine myself to those departures in policy or practice with which the House must concern itself, and to some central policy issues in the field of education that are of profound national interest. Within the area of tertiary education the particular issues I intend to raise are the dearth of finance available to the tertiary sector, resulting in the denial of places to an estimated 20,000 qualified students in 1987, the failure of the Government to maintain the triennial system of funding for higher education while the new Minister attempts to write a new policy for higher education, the introduction of tuition fees for higher degrees, and the proposed changes in funding for research. With regard to schools, I shall comment on the impact on schools, particularly government schools, of improvements in retention rates, and also on the burden of excessive government regulation on non-government schools. I shall also refer to the Minister's foreshadowed proposals, reflected to some extent in this legislation, to abolish the Commonwealth Schools Commission and the Commonwealth Tertiary Education Commission (CTEC), and to establish instead a National Board of Employment, Education and Training, thus depriving the users and providers of education in Australia of an effective voice in the formulation of public policy. The Bills include a restructuring of the financial assistance given by the Commonwealth to technical and further education (TAFE), and amendments to student assistance provisions under Austudy. My colleague the honourable member for Groom (Mr McVeigh) will draw attention in the course of the debate to the gross failure of the Government to administer Austudy in a manner satisfactory to the recipients of benefits. As these Bills form part of the Government's budgetary framework the Opposition will not seek in either House to block their passage. However, to draw attention to the grave shortcomings in many areas of the Government's education policy and administration, I shall move amendments at the second reading stage of certain of the Bills. I now move the following amendment in relation to the Student Assistance Amendment Bill 1987: 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 failure to administer Austudy student assistance grants in a timely and efficient manner, thus causing grave inconvenience to students and their families'. I foreshadow that I shall move amendments in relation to other Bills, including to the States Grants (Tertiary Education Assistance) Bill 1987, as follows: 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- (1) condemns Government policies which have denied 20,000 qualified students entry into higher education this year and which promise no better performance in 1988; (2) notes with concern the failure of the Government to maintain the triennial funding system for higher education, thus introducing uncertainty and potential wastefulness into the planning and expenditure of universities, institutes and colleges; (3) draws attention to the dangers inherent in allowing centralised bureaucratic bodies to decide whether or not research conducted by universities and colleges of advanced education is in the national interest; and (4) questions the inclusion of funds for key centres for teaching and research as a part of research funding rather than as a separate allocation concerned mainly with the improvement of teaching. I foreshadow that I shall move the following amendment in relation to the States Grants (Tertiary Education Assistance) Amendment Bill (No. 2) 1987: 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 expresses its concern that the transfer of responsibility from the Commonwealth Tertiary Education Commission to the Department of Employment, Education and Training proposed in the Bill is a precursor to the denial of an adequate consultative mechanism and public voice for those directly concerned with running and using Australia's various education systems'. I foreshadow that I shall move the following amendment in relation to the States Grants (Schools Assistance) Amendment Bill (No. 2) 1987: 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, this House deplores the excessive regulation by the Federal Government of non-government schools, which is designed both to impose an external value system on those schools and to hamper the growth of non-government schools and thereby limit parent choice'. The first issue I would like to deal with tonight is the overall level of resources available to higher education. The Minister for Employment, Education and Training in his statement to the House on 22 September last drew attention to the failure of the higher education system to meet the demand for student places at a time when there is widespread recognition of the need for higher levels of participation in the system to meet Australia's economic and social objectives. Some 20,000 qualified students were unable to gain entry to institutions in 1987. On the Minister's calculation we might well face a deficit of 75,000 places by the turn of the century without corrective action being taken. Whilst the Minister's statement of the problem is welcome, his actions in this Budget package take a backward step along the desired path. The increase in full time equivalent student places in universities and colleges of advanced education (CAEs) will be only 2.1 per cent in 1988 compared with a 2.9 per cent increase in 1983. As the Commonwealth Tertiary Education Commission has pointed out in its recommendations for 1988, this legislation provides an additional $38.4 for increased intakes in higher education. In the May economic statement the Government announced a 1 per cent so-called `efficiency' cut of $22.4m in 1988. Thus the Government has provided a net increase of only $16m in higher education funding, or around 0.7 per cent. In effect, says the Commission, the funding for the additional 3,500 to 4,000 intakes has been offset by the cut in the May statement. The worrying aspect of this squeeze on funds is that it is being imposed on a system that is already run down. CTEC is especially critical of the levels of equipment and building funding, noting in its 1988 report a `severe backlog in capital needs', and even raising the `distinct likelihood of serious accident through fire or other cause' if such prosaic items as minor works grants are not significantly increased. The rundown in the higher education sector is reminiscent of the late 1950s before the Menzies Government accepted the recommendations of the Murray Committee report, a landmark in the development of education in Australia. Clearly we face another critical period now, but the simple remedy of pouring additional taxpayers' dollars into the system is no longer available as it was in the 1960s. Tax is already too high in Australia, a fact at last recognised by this big spending Labor Government. To quote the Minister directly from his 22 September statement: In current budgetary and economic circumstances, however, it is simply not feasible to achieve quantum leaps in participation in higher education by providing quantum leaps in public expenditure. I agree with that. However, the question is: Where will the additional resources come from? The Minister rather judges the question. He cites improved productivity and effectiveness, together with a broadening of the funding base, as part of the solution. He has already caused considerable offence in the university community by berating those over-regulated institutions for their inflexibility and alleged poor performance. It is like overloading a pack-horse and then shouting at the poor beast for stumbling on the slope. The fact is that the Minister will not achieve the objectives he outlines in his statement without allowing the institutions considerably more flexibility in attracting private sources of funds, and then considerably more flexibility in their use of those funds. Setting aside the tuition fees issue for the moment, institutions that were perceived to have more control over their own destiny would be much better placed to attract private business sponsorship. To put company funds into an institution that is seen as little more than a creature of government is almost like sponsoring a branch line of the government railway. A critical test for autonomy and flexibility in the use of resources is whether or not the institutions will be allowed to deal directly with their staff on salaries and conditions of service. Although the need for flexibility in this area is most commonly raised in connection with faculties competing directly with the private sector for staff, such as commerce, economics or engineering, the issue is far more basic than that. If one wants to set up one of the best philosophy departments in the world-and why not?-the capacity to negotiate flexibly is equally as important as in the more industry related departments. Although the question of flexibility in the use of staff resources is one of the issues to be covered in the Minister's forthcoming policy discussion paper on higher education, it is regrettably clear from the Minister's statement that he is thinking of `industrial relations club' type regulation rather than giving the institutions total freedom to write contracts with their staff as they see fit within their global budgets. Unfortunately it is not within the power of a Minister in a Labor Government to propose any significant deviation from the pattern of centralised wage fixation, the centrepiece of the Australian Labor Party (ALP)-Australian Council of Trade Unions (ACTU) policy framework. The registration of academic staff unions-surely a contradiction in terms-under the industrial relations system has already advanced the process of solidification of reward systems beyond this Minister's political power to change. There is, however, a far more sinister aspect to this unionisation of higher education, for ultimately academic freedom and excellence are incompatible with trade unionism. Just as the excessive power of industrial unions in Australia has cast a pall of mediocrity over those areas of the economy on which it is inflicted, so too will the application of so-called industrial reality promote mediocrity in the very institutions where mediocrity is a deadly cancer. Already the effects of academic trade unionism are inhibiting the pursuit of excellence. In some universities the process of choosing the most brilliant post-graduate students for staff positions is inhibited because the positions have been taken by tutors whom it is impossible in the new climate to remove. Constraints of this kind are intolerable in areas of internationally acknowledged excellence and, because all areas in universities should be striving for the best, the constraints are intolerable everywhere. Let me make it clear that I am not arguing against tenure, about which there is much uninformed comment. I am arguing for the right of institutions to make their own sensible decisions about conditions of service, including when and where to confer tenure and on what conditions. If flexibility in the use of resources is an important goal, so too is flexibility in the attraction of resources. I have already referred to the problem of attracting corporate support. Thus we come to the question of tuition fees, a hook on which the Government is squirming most uncomfortably. The former Minister for Education, Senator Ryan, in keeping with the ALP Federal platform, maintained strong personal opposition to the introduction of fees in any form. She was, however, overruled by Cabinet when the higher education administration charge was introduced. It is no secret that the present Minister wants to change the ALP platform. There is no doubt that the administration charge is a breach of the platform and of ALP campaign promises, as is the measure being debated tonight to allow institutions to charge tuition fees for higher degrees. The irony of this latter measure is that the present Minister, as shadow Minister for Education in the Labor Opposition, went to the barricades in 1981 against the Fraser Government's proposals to do the very same thing. In a speech to the House of Representatives in 1981, the current Minister said: It is a direct breach of a promise. That is why we will be opposing that particular legislation. He went on to say: Another point that has to be made is that the Government is intent with this legislation on re-establishing the principle of tertiary tuition fees. It is intent on re-establishing a fee collecting mechanism . . . That is why we are intent on opposing it. He maintained that if the legislation were passed: It would be a quite simple matter for it in the future, without much fuss or bother, to extend the application of fees to include a vast array of other classes of students. He continued: That reason, if no other, is sufficient for us to oppose vigorously the reintroduction of fees. It is not just a question of the impact of fees on the admittedly relatively small group of students to whom they apply; it is the question of preventing the re-establishment of a principle which this Government- referring to the Fraser Government- would have no hesitation in extending to include other groups. It is essential, if higher education is to gain the extra resources it needs, for institutions to have the freedom to gain extra income from tuition fees. In the last election the Opposition proposed a system of higher education scholarships to provide free places in line with currently available and future taxpayer funding capacity. Over and above the free places, universities and CAEs would be free to accept additional students on any basis they saw fit. Such a system would remove the anomaly whereby overseas students can get fee paying places in higher education, whereas some 20,000 qualified Australian students are denied this opportunity. Such a system would have the additional benefit of providing a stream of private funds to supplement what the taxpayer can provide. The present Government has no choice but to adopt this, or some other fee system, otherwise its objectives for growth in higher education will fail. In retrospect, it was a mistake of the Whit- lam Government to nationalise higher education, just as it would be a profound mistake to nationalise the independent schools. Our schools would be crippled today if they were wholly dependent on taxpayer funds. Our health system is suffering desperately from the $2 billion nationalisation in 1984 under Medicare, which denied the system that stream of private funds and made it much more dependent on the dwindling taxpayer dollar. So, too, are Qantas Airways Ltd, Australian Airlines and the Commonwealth Bank starved of the capital funds they desperately need to compete with private enterprise. This is a generic problem spreading across most parts of public enterprise and service provision. Its outcome is inevitable. The only question is how long it will take for that inevitability to be acknowledged and the pain relieved. From the sound of the current debate in the Labor Party I believe that pain will be protracted. While the Government frantically tries to change gear in higher education policy, higher education suffers a jolt to its funding system through the abandonment of the triennium that was to begin in 1988. In effect, the Minister has said that his predecessor made such a mess of her job that the Government, after 4 1/2 years in office, needs to start again and the brunt must be borne by the institutions. CTEC has pointedly remarked in its 1988 report on the adverse effects of this policy decision on the planning and expenditure patterns of the institutions. Inevitably, some of the scarce money in the system will be wasted through stop-start inefficiencies. I now turn to the structural changes in the Government's educational advisory system. One of the Bills in this package has the effect of transferring functions from the Commonwealth Tertiary Education Commission to the Department of Employment, Education and Training in preparation for the changes foreshadowed in the Minister's statement of 15 October last entitled `Advisory Structures and the Administration of the Department of Employment, Education and Training'. The plan is to abolish the Commonwealth Schools Commission and the CTEC, to transfer their administrative functions to the Department, and to establish the new National Board of Employment, Education and Training as the Government's principal advisory body. The more one examines this proposal, the more one is forced to the conclusion that it runs totally against the goal of sensible public debate on the whole spectrum of education issues, and tightens the grip on an already over-centralised and over-regulated set of educational systems. The Minister's objectives sound fine and have been widely applauded. The instruments he chooses to achieve those objectives are, I regret to say, corporatist in nature and ultimately counter-productive. The Opposition holds no particular brief for the administrative functions of the Schools Commission or the Commonwealth Tertiary Education Commission. They were Federal bureaucracies superimposed on the States and the independent institutions in an attempt to correct perceived shortcomings. They achieved some success, but at the cost of demoralising to some extent the institutions they were designed to regulate, and removing much of their incentive for self-reform and innovation. The effectiveness of the state school systems has not been noticeably improved by the existence of these Federal bureaucracies, even though some of the superimposed programs have been essential to meet the needs of consumers. The question of what happens to investigatory and advisory functions of these bodies is, however, a different matter. With their independent powers of investigation and publication, and with their broadly representative composition, the commissions have provided an essential counterbalance to the authoritarian tendencies of Federal and State bureaucracies. They have also provided an independent forum for informed public debate on educational issues. In this they have provided a valuable public service. The commissions are to be replaced by a national board which introduces for the first time into education the Government's corporatist model of control by big government, big business and big unions. The Board of 12 members will consist of four permanent public servants, two ACTU representatives, two representatives of big business, two `education-training providers', and two so-called `independent' members chosen by the Minister. There is no consumer representation at all, and the whole educational system of professionals and administrators other than TAFE gets one of the two places for `education-training providers'. If the Economic Planning Advisory Council is to be any guide to the future operations of the Board, the ACTU will exercise a veto over publications, as Mr Kelty did with the Economic Planning Advisory Council (EPAC). EPAC was castrated by ACTU medievalism. We do not want the same in education. It is particularly distressing to see these developments proceeding in parallel with the unionisation of academic staff, on top of the already existing baleful influence of excessively powerful teacher unions. The Minister claims that the various educational interests will be accommodated within the advisory councils reporting to the Board. However, unlike the Schools Commission and CTEC, the councils will be allowed to deal only with matters referred to them by the Minister or the Board. They will have no independent powers of investigation or publication. They are effectively gagged. The Minister has claimed widespread support for this proposal from interested parties. This is not true. Most of the provider and consumer groups have expressed their grave concern over the proposed structure, and these concerns are building up. We will be having more to say on this subject in the lead-up to and consideration of the enabling legislation, which will have to run the gauntlet of the Senate. The next area of concern prompted by this legislation is research. One of the Bills redirects $5m from general recurrent grants to universities to fund an expansion of special research centres and key centres of teaching and research as well as targeted research activities in the advanced education sector. As CTEC points out, it is puzzling as to why the funding of the key centres of teaching and research, concerned primarily as they are with the improvement of teaching methods, should be placed under the Australian Research Council (ARC) umbrella. However, I have far more serious concerns about the direction of research funding. I will leave for a future debate the important question of the allocation of research funding between institutions, including CAEs. At this stage I confine myself to sounding a warning about the ARC component of the new national board structure, the dangers of bureaucracy overwhelming excellence in the field of research, and also the dangers of the Government's understanding of what constitutes the national interest. As Minister for Health in 1982, I blocked an Australian Science and Technology Council (ASTEC) proposal to consolidate Australian biomedical research into a statutory authority. In an area where Australia has achieved universally acknowledged standards of excellence under the aegis of the National Health and Medical Research Council (NHMRC) and other funding mechanisms, it would have been a grave mistake in my view to have consolidated and placed under a single administration the variety of activities that had provided both flexibility and excellence of outcome. The ARC proposal comes from the same source, ASTEC. So far the capture of the NHMRC has been resisted, but the same thinking is there, and I think it is dangerous. Centralisation, bureaucratisation, ossification and mediocrity go hand in hand. Competition for funds on the criterion of excellence is the only way to ensure that research money is spent wisely. The farther one gets from the researchers themselves in the conduct of these events, the more the risk of declining standards. As a member of the Myer Committee on Research Centres of Excellence in Universities and from my extensive contacts with Australia's outstanding biomedical researchers, I have a horror of the rigorously competitive drive for excellence of these people being depreciated by the intrusion of the utterly different cast of mind of the public sector administrator. This is not to depreciate the essential and valuable contribution of the latter to the national good, but merely to recognise the proper place for that contribution. The same arguments apply to the so-called national interest criterion for the allocation of research funds, which has already been applied to the award of a proportion of postgraduate awards and is intended to be incorporated in the ARC arrangements. Is the national interest best advanced by a vast number of independent decisions about research made according to the criterion of excellence, or by a Canberra-based structure advised by people remote from day to day research practice? Let me quote directly from a recent speech made by Professor David Penington, Vice-Chancellor-elect of the University of Melbourne and an eminent medical research scientist: We are told now that research should increasingly be targeted to fields designated as in the national interest. We are told that some sections of our universities should receive no funding for research and be committed solely to teaching. The Federal Minister makes the statement that no university will receive funding for research in all of its disciplines. Even more remarkable is the statement `that research successes have been more by accident than design' . . . So much of our success has been accidental and due to extraordinary efforts or extraordinary brilliance of a minority of people. One is tempted to react with anger or irritation and to state that the Minister simply does not understand the research process. Indeed, there is a profound danger that if these views were to dictate the imminent re-shaping of Australian science and technology, we would find ourselves committed to applied research only. There is an analogy here with the problem of underinvestment in Australian industry. The ACTU, in Australia Reconstructed, argues for tripartite-that is government, business and union-decision-making about the direction and extent of business investment on an industry by industry basis. It is argued that such a process advances the national interest more than having a myriad of individual and corporate investors risking their own or their shareholders' funds in ventures for which they take complete responsibility, with the penalty of going broke if they fail. I have no doubt as to which system I would choose. The other dangerous overtone of the Minister's approach, which reminds me of British Prime Minister Harold Wilson's infatuation in the 1960s with the white heat of the technological revolution, is its tendency to depreciate the role of the humanities in advancing the national interest. Every so often governments get it into their heads that they can force an outcome out of the higher education system by fiddling with the immediately visible controls. They simply do not understand that the shortcomings of the system, of which there are many, are more deep-seated, and many of them derive from government regulation. Finally, let me turn to the schools, where time constraints limit me to two concerns. The first concern is the very grave difficulties being faced by schools, particularly government schools, in handling the greater numbers of secondary students arising from the admirable objective of improving retention rates. Unfortunately, the interests and requirements of many of the students now deciding to remain at school do not coincide with the curriculum currently available in our high schools nor with the teaching skills or experience of the majority of high school teachers. Additionally, the management systems of the schools and their disciplinary powers appear to be inadequate to cope with the needs of these students. The strain on the teachers is extreme in some schools. Much more attention must be devoted to problems of this nature if the objectives of higher retention rates are to have any meaning other than in the statistics proudly quoted by the Government. The second concern I have is in the regulation, or over-regulation, of non-government schools. The Government has an underlying dislike of non-government schools, reflected in the highly restrictive policies introduced by Senator Ryan. Unfortunately, the present Minister seems not to want to overturn this particular aspect of his predecessor's program. Two aspects of Federal Government regulation are irking non-government schools. The first is the imposition of social values by regulation, with the schools having to report to the Government on their progress in imposing within their schools certain values seen by the Government as desirable. Since most of the non-government schools base their very existence on strongly held value systems, many of them resent this kind of intrusion. They regard the choice of the parents in these matters as the guiding principle. The second aspect of regulation causing concern is something equivalent to the Japanese system of non-tariff barriers to imports. Because of the strong public demand for places in non-government schools, those schools are constantly seeking to expand to meet the demand. In this objective they are frustrated not only by the restrictive guidelines imposed by the Government with the intention of limiting growth, but also by the over zealous application of those rules by officers of the Department. I am hearing more and more stories of this kind. As the Opposition does not agree with the original policy decision to restrict non-government school growth, it is equally opposed to this bureaucratic frustration. It is ludicrous for non-government school administrators to spend as much time as they do providing more and more material to be second guessed by departmental officers. This debate provides one of the few opportunities we have throughout the year to examine the stewardship of the Government in the field of education. Other Opposition speakers will examine various aspects of the Government's performance as far as time permits. Disraeli said: Upon the education of the people of this country, the future of this country depends. Issues of the most profound importance to our future are now on the agenda. In our schools there are questions about curriculum and assessment, as well as management and discipline. In TAFE there are questions of the relevance of training to our national economic needs. In higher education there are questions of resources, of academic freedom and excellence and of the future direction of research. It is hard to think of more important questions affecting Australia's future. I want to make it clear that the Opposition is ready to support constructively any changes for the better in our education system. However, in contributing to this debate, we will be arguing for choice and quality and against enforced uniformity and mediocrity. It is our strongly held view that our systems at all levels of education are over-centralised and over-regulated. They are provider rather than consumer driven. They are too inflexible to meet our present and future needs, but much of that inflexibility is externally imposed. Within the systems there are creative, intelligent and energetic people wanting to achieve and to excel. Everything we do as legis- lators should be designed to encourage them, not frustrate them. Mr DEPUTY SPEAKER(Hon. J. D. M. Dobie) —Is the amendment seconded? Mr Shack —I second the amendment. Mrs DARLING(Lilley)(10.14) —I am pleased to speak to this package of eight education Bills following the recent Commonwealth Budget. I am particularly pleased to do so as part of a government which is looking at the exciting challenge of bringing together strands of employment, education and training under the one portfolio. I was rather concerned at the anxieties felt by the honourable member for Mackellar (Mr Carlton), who delineated a number of areas in higher education where he would like to see winds of change. A number of the aspects to which he referred have been given serious consideration in the House by the Minister for Employment, Education and Training (Mr Dawkins). The task force on higher education which has been established by the Secretary to the Department of Employment, Education and Training will examine a number of resource related issues, including some of those mentioned by the honourable member for Mackellar. Mr DEPUTY SPEAKER(Hon. J. D. M. Dobie) —Order! It now being 10.15 p.m., I propose the question: That the House do now adjourn. Mr Humphreys-Mr Deputy Speaker, I require the question to be put forthwith without debate. Question resolved in the negative. [COGNATE BILLS: STATES GRANTS (TERTIARY EDUCATION ASSISTANCE) BILL 1987 [STATES GRANTS (TERTIARY EDUCATION ASSISTANCE) AMENDMENT BILL (No. 2) 1987] AUSTRALIAN NATIONAL UNIVERSITY AMENDMENT BILL 1987 CANBERRA COLLEGE OF ADVANCED EDUCATION AMENDMENT BILL 1987 MARITIME COLLEGE AMENDMENT BILL 1987 STATES GRANTS (SCHOOLS ASSISTANCE) AMENDMENT BILL (No. 2) 1987 STATES GRANTS (EDUCATION ASSISTANCE-PARTICIPATION AND EQUITY) AMENDMENT BILL (No. 2) 1987] Debate resumed. Mrs DARLING —Some of the areas being considered by the task force will be growth rate targets; resources required and means of achieving these; general productivity issues; options for a unified system of higher education; concentration of effort in teaching and research; scope, scale and provision of external studies courses; means of achieving flexibility in staff resources; and means of enabling institutions selectively to increase revenue from non-Commonwealth Tertiary Education Commission (CTEC) sources. In fact, a policy discussion paper will be issued towards the end of the year as already announced by the Minister and will be used as a basis for consultation and community comment. Following consideration of response to this paper, the Government will present its long term policies in the form of a major policy statement which will be finalised in the 1988-89 Budget context. So, overall, I would suggest that the honourable member for Mackellar would indeed have reason to be anxious were he at the moment in a parliament and in a government which were sticking to the old, static structures of the past, a government and an education system which were being hurt by benign neglect of the past. But in fact, the honourable member for Mackellar is in the Opposition of a parliament which is noted for a government of thought and a government ready to change the education system for the better, and most particularly for the better of young people and those Australians who have not been having a fair deal in the past. Whilst the provision of education in Australia is primarily a public responsibility, it should not necessarily be seen as the total responsibility of a government. All sectors of society are involved. The Minister for Employment, Education and Training noted when tabling his statement on higher education in this House on 22 October 1987 that it is more than coincidence that the world's most successful economies over recent years have given high priority to basic education and vocational preparation of their young people. The two factors are obviously very closely linked. While education on the whole is the prerogative of State governments, the quality of education available to people should certainly not depend upon what State they live in. Concern for equity in schooling across the nation has led the Commonwealth Government to accept a responsibility for meeting special educational needs over and above the broad State responsibility to allocate major educational funding. The Commonwealth Government sees its particular responsibility as meeting the special educational needs to ensure the overall quality of education in Australia. Education has both individual and social objectives. In the national interest we strive to heighten the quality of education provided by the school system. Firstly, of course, we must assess quality. We do so at national, economic and social levels to fit our policies to conjointly meet those needs. In this context, it is the Hawke Government's policy to continue to provide funding for tertiary education in the States and the Northern Territory and to increase that funding as necessary with increases in the cost of living. Of the package of Bills before the House, the States Grants (Tertiary Education Assistance) Bill 1987 provides financial assistance to the States and the Northern Territory for tertiary education in 1988. It transfers administrative responsibility for Commonwealth tertiary education programs to the Department of Employment, Education and Training. This Bill will appropriate $2,707m for grants to tertiary education as it continues funding for universities, advanced education, technical and further education (TAFE) and non-government business colleges in 1988. The funds allocated by the Bill accord with the Government's decisions in response to the report by the Commonwealth Tertiary Education Commission, Higher Education Recommendations for 1988, and give effect to the announcements on TAFE made in the Government's report Skills for Australia at the time of the Budget. The Bill has been simplified both in structure and presentation. More plain language has been used and schedules for grants of a similar nature with common conditions are now combined. For example, the schedules for higher education capital and equipment grants cover both universities and colleges of advanced education. While our education system must retain its own personality, it makes sense that both educational programs and training schemes lead to people being able to realise their full potential personally and in the work-place. This means real education and real training for real jobs. This must be our aim. The pulling together of the equally important strands of education, employment and training under the one portfolio is a real move towards realising this aim. The Minister for Employment, Education and Training, the Government and the community have a big job ahead overhauling the higher education and training systems to meet the needs of all Australians, of young people in particular. We invite Opposition members to work with us. We think it is appropriate as they consider the Bills before us tonight that, instead of harking back to a past that was noted often for its lack of dynamism which has adversely affected young Australians in the past, they join us as we look at the establishment of the National Board of Employment, Education and Training (NBEET) along the lines proposed by Charles Halton as part of the challenge providing the practical structure for the implementation of our new joint policies. The Minister is now working with Mr Halton to ensure that the best aspects of the Commonwealth Schools Commission and CTEC are reflected in NBEET. I assure the honourable member for Mackellar that Government members are aware of the worth of the Commonwealth Schools Commission and of CTEC, but we are looking to a new era in which we cannot afford to let young people down by sticking to educational purity and not dirtying our hands with training and not bringing these two aspects together because what was in the past is always best. Only privileged people who are comfortably in full time employment can afford to take that stance. We need to educate our young people, to train them for real jobs. That is what both the formulation of NBEET and the Green Paper on higher education are all about. The honourable member for Mackellar also mentioned the structure of the new Board. He expressed concern that there would not be enough diversity of opinion on the membership of the Board. I would like to make the point that discussions are still taking place and that the Minister is undertaking a strenuous timetable meeting community groups. I am very aware of this as the chairperson of the relevant Caucus committee. The Minister is also putting in many hours meeting with us, as are the interest groups to which the honourable member referred. Four advisory councils will report to NBEET: the Schools Council, Higher Education Council, Employment and Skills Formation Council and the Australian Research Council. The Board will have a full time chairman and three full time executive members, as well as, in certain circumstances, one part time executive member. The Board will consist of 12 or 13 members all up. I think it is pertinent to note that the chairperson and the three executive members will also be chairpersons of the councils-the Schools Council, the Higher Education Council, the Employment and Skills Formation Council and the Australian Research Council. They will have a double voice being on one of the councils as well as on the Board. Part time members will include two union representatives, two business and industry representatives and two education training providers. There is also an independent membership of two or three, so the Minister can look to even up the overall representation. He has taken pains to see that there will be full representation. While the Federal Government is meeting the need to improve and expand the higher education system, results will be realised only if all key parties make their contribution. The demands on the higher education sector are increasing, but these demands cannot be matched simply through increased expenditure. Expenditure will need to be carefully balanced across sectors and priorities set. Important changes are required in the higher education system to meet Australia's economic and social needs. The Government is also taking a lead here in issuing the Policy Discussion Paper on Higher Education, to which I have already referred. Of the remaining Bills before the House, the Australian National University Amendment Bill 1987, the Canberra College of Advanced Education Amendment Bill 1987 and the Maritime College Amendment Bill 1987, will ensure consistency of treatment with tertiary education in the States and the Northern Territory as a consequence of the new States Grants (Tertiary Education Assistance) Bill 1987. The States Grants (Schools Assistance) Amendment Bill (No. 2) 1987 amends the 1984 States Grants (Schools Assistance) Act to provide grants for the 1988 calendar year, in line with the recent Government decisions, and to supplement existing grants for 1987 and 1988 for price movements. The Bill sets aside an estimated $1,739m for school programs in the calendar year 1988, consisting of $1,339m for general recurrent grants, $222m for capital grants and $178m for specific purpose grants. The Bill also appropriates a further $9m for 1987 programs, for price increases in line with retrospective cost supplementation arrangements. This brings total funding for 1987 programs to an estimated $1,638m. The States Grants (Tertiary Education Assistance) Amendment Bill (No. 2) 1987 amends the 1984 States Grants (Tertiary Education Assistance) Act to adjust for cost movements in tertiary education grants to the States and the Northern Territory, providing $3m supplementation in accordance with the Government's agreed procedures to make retrospective adjustments for cost variations. The Student Assistance Amendment Bill 1987 limits the extent to which Austudy is payable to students in private sector institutions. The final Bill, the States Grants (Education Assistance-Participation and Equity) Amendment Bill (No. 2) 1987, amends the States Grants (Education Assistance-Participation and Equity) Act 1983 to adjust grants available to government and non-government education authorities in the States and the Northern Territory to conduct projects under the participation and equity program (PEP) in 1987. The Federal Government's PEP commenced in 1984 with the objectives of increasing participation and achieving greater equity in educational provision. Initial legislation provided for the years 1984 to 1986, but in May 1985 it was decided that the program should be extended for an additional year. The program has played an important role influencing the direction of education at both the secondary and primary levels. Through the stimulus of PEP there is now a large measure of self-sustaining momentum in school systems and schools. It most definitely has left its mark. PEP is to cease at the end of this year and I am sure that many members on both sides of the House will regret that it is to go. This Government's commitment to ensuring participation and equity in Australia's education system will most certainly continue. The significant, real per capita increases to schools, under the general recurrent grants program, and the priority areas identified for the use of these extra funds will ensure the continuation of initiatives begun under PEP. The Federal Government will continue to support improvements in the quality of schooling and will provide additional resources for schools to support the specific educational needs of particular groups of students. Money alone will not make education effective if it is not wisely spent. For instance, Queensland is the only one of all the Australian States which has not endorsed the national policy on the education of women and girls. All other States have endorsed the policy of shared principles, objectives and priorities for the period 1987-89 aimed at widening educational options for girls. The Queensland Teachers Union has called on the Queensland Government to endorse the national policy and implement it in co-operation with other States. But while other States' education departments have special units in this area for teacher in-service education, and a number of other areas, the Queensland Government ignores the special educational needs of Queensland school girls. So the education dollar must be targeted to fulfil needs. There is not any point, as has happened in the past, in providing academic subjects or subjects which would well fit a student for a job in a city store if the student is living, and intends to work, in a rural area based on agriculture or in a fishing community. The new youth training program, which will commence in 1988, will take over from PEP initiatives in TAFE by providing a range of short term vocational training opportunities for unemployed and disadvantaged young people. The Commonwealth Schools Commission reported in its review Quality and Equality that, of all citizens, children are least able to protect or further their interests on their own behalf. I agree that this is particularly so for those children who, through no fault of their own, face educational, economic or social disadvantage. As they grow into young adulthood their opportunities should not be limited by their parents' capacity to provide education. The quality of education available to people certainly should not depend upon what State they live in or how much money their local parents and citizens can raise. Equity for schooling should exist across the nation. Furthermore, education should be linked to training and both should result in people entering the job market equipped with skills which befit them for real job opportunities. Despite the disadvantage of the extremely unstable economic situation inherited in 1983 as the result of past neglect, the Hawke Government is acting to meet this joint challenge. Mr CADMAN(Mitchell)(10.33) —I want to draw the House's attention to two matters in regard to this great raft of Bills we are dealing with in one batch tonight and they both relate to the States Grants (Schools Assistance) Amendment Bill (No. 2) 1987. The first matter about which I want to complain is the way in which the Government has applied restrictions to non-government schools in western Sydney. I have before me a letter from Mr Howard Garner, Director, New Schools Section of the Department of Employment, Education and Training, which he has written to people interested in non-government schools. Enclosed with that letter is a list of schools in New South Wales which are limited in their ability to attract additional students. One-third of all schools in New South Wales that are capped are in western Sydney, a most deprived area educationally and socio-economically. Yet the Government is sticking the boot into people in Australian Labor Party (ALP) electorates, ignoring the commitment of parents and endeavouring to limit the opportunities that parents want for their kids. The schools are ordinary schools. I will read the names of some of them: Blacktown Christian Community School, Blue Mountains Grammar School, Broughton Anglican College, Catherine McAuley High School at Westmead, Eagle Vale Catholic Primary School, Erskine Park Catholic Secondary School, Immaculate Heart of Mary Primary School at Quakers Hill, Kenthurst Catholic Primary School, Kenthurst Catholic Secondary School, Macarthur Christian College at Menangle Park, Menai Catholic Primary School and the list goes on. Thirty-odd schools of that type are being prevented by the Government from providing the service that the parents of western Sydney want. Those parents are prepared to put their money and effort on the line. The Government says that, despite the shortage of educational resources in that part of New South Wales, despite the overcrowding in many public schools, despite the commitment of parents, despite the low incomes and the difficulty in finding employment, it is determined to restrict educational opportunity. , Government members have bleated tonight about the equity that this Government is supposedly bringing to education. I can see no equity being demonstrated towards parents and children, especially to needy children who need a good education, who are determined to do the best for themselves and for their parents. They are being restricted by a government which is uncaring, a government which aims to take complete control of the non-government sector by squeezing it. The schools to which I refer range right across the west, in suburbs such as St Marys, Erskine Park, Blacktown and Rouse Hill. These are not wealthy suburbs; these are suburbs in which battlers live. The Government is prepared to put the boot into battling families in this way. What is being done by this Government is criminal. It is the ideological bent of the former Minister for Education, the Special Minister of State (Senator Ryan), and the current Minister for Employment, Education and Training (Mr Dawkins) to restrict educational opportunities. Why else would they apply these restrictions to ordinary schools attended by ordinary children? For the first time we have seen intervention at a level never before seen in Australia. Schools are being made to comply with the whims of the Government. Not only has the Minister for Employment, Education and Training limited educational opportunity in primary and secondary schools, but also by that process he is restricting kids' access to tertiary education. The Australian Labor Party equivocated for years about a university in the west. It finally decided on a half-baked idea, which is proceeding. It looks as though the city of Blacktown will get a steel mill, but it will not get a university. The university will be out there somewhere. So much for the heart of western Sydney. Government members really deserve censure for their lack of support for their constituents and their lack of ability to convince the Government of the priorities that it ought to have. Across the west people are looking for opportunities and jobs. Education will lead them to those opportunities and jobs. The Government is supposedly applying these restrictions in order to achieve its objectives. What a crazy set of priorities! Another important area concerning the States Grants (Schools Assistance) Amendment Bill (No. 2) that I want to deal with tonight relates to English as a second language (ESL)-the big matter for public discussion following the Budget in 1986. There were dramatic cuts to ESL programs. The Government has claimed that it has restored the level of funding. The Prime Minister (Mr Hawke), in his statement on the ALP immigration and ethnic affairs policy, launched in Melbourne on 18 June 1987, said: I should say that the Government is committed to maintaining sufficient levels of funding flows to general ESL programs, in recognition of the need to ensure that people of non-English speaking background are not disadvantaged in Australian society, and that the education and skills they bring to this country can be fully utilised to the benefit of all Australians. What are the facts? Funding for the ESL program is down in total by another 4 per cent on last year's cuts. Certainly the new arrival program has been increased, but funding for the total program is down, including the program that gives significant support to language teaching. That provides assistance for specialists and/or mainstream teachers to address the English language needs of students of non-English speaking backgrounds. So the in-service and in-school training for teachers is up, and the new arrival program is up slightly, but the total program in real terms falls by 8.5 per cent. So much for the Prime Minister's commitment made during the election campaign. So much for the Government's commitment. I do not think that this Government can be trusted. Even in the Australian Capital Territory where there is no support from a State government, similar cuts have been made-a total fall of 4.5 per cent or 8.5 per cent in real terms. This reflects the falls that have been felt around Australia. In the Australian Capital Territory there is no advantage of a State government to plug the holes as necessary. Despite the claims of the Prime Minister, the proof of the pudding is there-the proof that his commitments cannot be given endorsement and cannot be trusted. How can anyone trust this Government? Before the last election the migrant communities around Australia were most concerned. The McNair Anderson poll indicated the number of migrant families and newcomers who distrusted the Government's commitments. It also showed the number of migrant communities that were concerned about the English as a second language programs. Even Senator Richardson and the Premier of New South Wales described the language cuts as `stupid' but those programs have not been restored. They have been nowhere near restored. On 23 September last year the Sydney Morning Herald reported Barrie Unsworth as saying: Ethnic groups will feel your Government has lost touch with their needs. That is a quote from Premier Unsworth. Senator Richardson said something similar. In the Canberra Times of 10 November 1986 he is reported to have said: If I'd sat down for a month and tried to work out how to offend and how best to hurt [ethnic groups] I'd have cut back English as a Second Language as a program . . . That decision was not only bad politics, it was wrong in principle and wrong in implementation. The implementation continues to be wrong. The Government's own Review of Migrant and Multicultural Programs and Services, the Jupp Committee, stated: At the school level, a survey by the Commonwealth Department of Education and Youth Affairs in 1983 found that around 23 per cent of children enrolled in schools in Australia (approximately 690,000 students) came from homes in which at least one of the parents or guardians normally spoke a language other than English. While it is not suggested that all of these children would have been experiencing language-related learning difficulties in school, a recent review of the Commonwealth English as a Second Language Program (CESLP) found that 55 per cent of those in need of specialised English as a second language (ESL) assistance in the schools surveyed were not receiving it. The Government has done nothing to lift the program as advised by its own Ministers, by the Jupp Committee report-a committee of the Government-and by report after report of the Commonwealth Schools Commission. These reports all say that English as a second language is the most significant program one can give to young people. I would like to quote to the House just one further significant report. However, there are three or four of them-anyone can look them up. They are reports from the Commonwealth Schools Commission in 1985, 1986 or whichever year. All these reports say the same thing about the significance of English as a second language. I wish to quote from the Schools Commission report of 1984 because the facts still stand. The Commission had recently received a report of the review of the program undertaken by Professor Campbell, the very distinguished Professor from the University of Queensland. The report of the Campbell Committee of Review of the Adult Migrant Education Program revealed a serious deficiency in the provision of resources for students of non-English speaking backgrounds in need of English as a second language assistance and in the way in which many schools responded to these needs. According to the report, many students of non-English speaking backgrounds do not proceed far beyond a coping or survival level in English language competence. What has the Government done in the face of that criticism? It has restricted the increase in funding to a one-year, on-arrival program only. There is no sense of continuity or follow-up. There is just one year's basic English as a crash program for kids who do not have English as their basic language. The Government hopes that that will provide those children with the basis for further education and a capacity to move through the school system. Of course it will not. How can children conceptualise the abstracts of education, the need to express themselves, the need to understand the ideas that they will be faced with in secondary and tertiary education if they do not have a sound grounding in the English language? The Government's program is one of walking away from basic responsibilities. It is putting in place an increased program with increased resources. In total, expenditure on the program is down but the real reason why it has been cut is that there is no follow-up or continuity program. It is a one-off, one-year crash course for non-English speakers. I do not know how these people will survive in a competitive society such as we have at the moment. I do not know how they will survive in secondary schools and achieve their potential there. Nor do I know how they will survive when they come to look for tertiary education. Senator Ryan had the goodness of heart to say late in the event of 1986 that she was sorry. Being sorry for a lost generation is not enough. This House knows it. Honourable members opposite know it. The Senate knows it. However, the Government apparently does not understand. What is wrong with Government members? Why do they not make the Government understand? They have the committees and the other processes by which to do this. As members of the Australian Labor Party, they claim to belong to a democratic organisation in which there is a long tradition of everybody having an equal say. What about an equal say for some of the kids who will miss out on opportunities as a result of their policies, their programs and their broken promises? I can hardly understand why this is so, although maybe I can, because ego seems to be more important to the Prime Minister than substance. I can hardly understand how the Prime Minister could make the claims he did before the recent Federal election and then not deliver those in the programs following the election. I refer to a recent revealing inquiry chaired by Dr James Jupp. The Government has shelved that inquiry, by the way. It was supposed to be in two sections and although one part has been done, there is no talk of a second one. Dr Jupp had a project team look at the English language problem. The team reported: The language barrier was identified by most participants as a major factor to which they ascribed many of their problems, frustrations and anxieties. It was described as a crucial problem in all areas of their Australian life, adversely affecting their social functioning and general well-being. This was despite the fact that a large proportion (47.5 per cent of those consulted) had been in Australia for 15 years or over. That is the priority people are putting on the acquisition of language in Australia. The same flippant attitude is being adopted in regard to the national language policy. That policy has been so long in gestation that nobody knows what it is about, except for some bleating comments now and again from the Minister for Employment, Education and Training to groups who happen to want to interview him about it. However, from reports I have had the program is going to be economically based. It will be based on both existing and potential trade relations. The honourable member might be a good Minister but I do not know how he will predict what will happen to trade over the next 20 years and who we will be trading with. The Minister is going to select the languages that will be taught as part of a national language policy on the basis of trade processes and trade potential. But what about the services required in this country for multilingual speakers to provide services in welfare and health and many other areas for those people who are not competent in English? That is another important area in which we need good language skills. What about our capacity in diplomacy-not just in the area of trade, in buying and selling? I refer to the capacity to communicate effectively with countries with whom we have contact around the world and with whom we must have good understanding. We have a pool of resources in Australia waiting to be used and which, with some slight government encouragement, can be used effectively in programs through schools and universities, then in the foreign service, welfare services, education and health. This is an area completely neglected by this Minister. The Opposition is not about dumping people in Australia and hoping that they survive. This area is high in our policy priorities. One brief extract from our policy says that we will give priority to English language training programs, in particular the teaching of English as a second language, because this Government is bringing people to Australia and dumping them here, expecting them from their own resources after 12 months of intensive English language for children to be able to survive in a competitive society. The Government's concept of looking after people is far from all the reports and authorities which the Government has established to advise it. Even the recent addition to government advice, the Office of Multicultural Affairs (OMA), is giving high priority to the English language. It is the top item in its recent publication A Fair Go and a Fair Share: Access and Equity for All. The English language is up front there. I refer honourable members to page 13 of this document where speaking everybody's language is the top priority given by OMA for Australians of non-English speaking background. We have had report after report, yet the Prime Minister had the hide to make the promises he made in the last election and then not deliver. Not one person in the Australian Labor Party is prepared to stand up and be critical, not one individual of you. You are gutless, the whole lot of you. You do not represent the people you are supposed to represent. Madam SPEAKER —Order! The honourable member will speak through the Chair. Mr CADMAN —Certainly, Madam Speaker. I would not like to use those terms in reference to you. Therefore, I spoke directly to the members in the chamber. Madam SPEAKER —No, the honourable member must speak through the Chair. Mr CADMAN —Many mechanisms can be used by those of us in politics to draw the attention of the Government, particularly the Executive, to matters where they fall short. These are two important matters. The kids of western Sydney and the children of non-English speaking migrants need support and a worthwhile English language program and, in the former case, need decent schools and educational opportunity. They are not getting them from the Hawke Government, nor will they ever. Debate (on motion by Mr Jenkins) adjourned. Motion (by Mr Humphreys) proposed: That the House do now adjourn. Mr N.A. Brown(Menzies)(10.53) —Recently the Union of Soviet Socialist Republics celebrated the seventieth anniversary of the Bolshevik revolution. It is appropriate that this event should be acknowledged here, for it was certainly a significant event and has had a profound effect on the history of the world. The achievements of the Soviet Union in the 70 years since its inception should be recorded, for they are indeed quite remarkable. Its first achievement is that this regime, in the 70 years since it was established, has been unable even to feed its own population. It has also been unable to provide its people with anything remotely like the standard of living that Western democracies have been able to provide for their populations. In 70 years it has attained such little popular support from its population that it still today has to reign by the same terror that brought it to power. This is certainly a remarkable achievement, as is the fact that even after 70 years it cannot afford to allow its people the slightest glimmer of freedom or the most elementary human rights. It remains in power after 70 years because it controls every aspect of human life of the unfortunate people who still live under its rule. Outside its own boundaries, it has succeeded in subjecting to its rule millions of people who have never been asked whether they want to live under Soviet rule or not. It exterminated millions of human beings in the Ukraine; it invaded the Baltic states of Latvia, Lithuania and Estonia; it imposed a vassal-like dominion over Finland; and it incorporated into its empire East Germany, Poland, Hungary, Czechoslovakia, Romania, Bulgaria and other countries, all of which it continues to occupy. As a consequence, it suppressed the freedom of millions and continues to do so with scarcely any protest from the West. Not content with this empire and the denial of basic human rights to anyone touched by its rule, it has continued to foment revolution with the clear objective of extending its influence well beyond its borders and into Africa, Asia, the Pacific, South America and beyond. In doing so, it has tried to acquire a new respectability, which it is helped in acquiring by the same societies that it would seek to undermine. For example, when our Prime Minister (Mr Hawke) visits the Soviet Union on his pilgrimage in a few weeks, he will apparently sign a new agreement with the Soviet Union to promote, believe it or not, sporting contacts between the Soviet Union and Australia. As we know, sporting contacts have become the main target in the current campaign against South Africa. Over the last few days, Mr Pat Cash in particular has been singled out for the venom of the Prime Minister for having the audacity to earn his livelihood and promote his future by playing tennis in South Africa. What do we find but that the Prime Minister is now going off, turning a blind eye to years of atrocities in the Soviet Union, and actually encouraging closer sporting contact between Australia and the Soviet Union. What utter hypocrisy! Mr Cobb —How selective. Mr N.A. Brown —As my colleague says, what utter hypocritical selectivity the Prime Minister shows. What an irony it is that we should actually be promoting new sporting contacts with a country that denies a democratic vote not to part of its population, like South Africa, but to all of its population. As the seventieth anniversary of the Bolshevik revolution passes, we should remember, in sorrow, that we are noting the foundation of a state that remains as much today, as it was 70 years ago, based on force, terror, imperialism and the denial of all human rights to its own people. Mr SCIACCA(Bowman)(10.57) —I rise to speak on a proposal which is being considered, a proposal which causes me considerable concern and which represents an attack on the rights of all workers employed by the Commonwealth and its instrumentalities. Consideration is being given to possible amendments to the Compensation (Commonwealth Government Employees) Act. The effect of the amendments, if they go ahead in the form presently proposed, will be to abolish the common law rights of all those who work for this Government and its instrumentalities to recover damages for injuries suffered in the course of their work as the result of any breach of duty by the Government as an employer. There has been some Press and media reaction which is not unfavourable to the proposed abolition of the common law rights of Commonwealth employees. The Press in this country has never been shy in calling for the abolition of the perks of the fat cats of the Public Service. Common law rights are not a perk and those affected are not fat cats. The workers represented by the Australian Postal and Telecommunications Union, the Australian Public Service Association, the Australian Telecommunications Employees Association, the Administrative and Clerical Officers Association, the Commonwealth Bank Officers Association, the Australian Transport Officers Federation, the Miscellaneous Workers Union and the Federated Clerks Union will all be affected by the removal of rights available to other members of the community in situations in which they suffer a loss as the result of the negligent breach of duty by their employer. Whenever a lawyer speaks of the right to sue somebody for damages for injury, he does so to cries of self-interest. I am not ashamed that I have acted for many people seriously injured on the roads or in the workplace. If anything, that experience has brought me closer to the real needs and aspirations of those whose earning capacity or enjoyment of life has been permanently diminished as the result of the fault of another party. The evolution of the common law concept of the rights and duties that members of the Australian community owe one another is a concept which was hard won and of which we can be proud. The community generally is comfortable with a system that provides that where an employer chooses to disregard safety standards and put workers at risk he can be sued by those workers for any loss or injury that results. Those who argue in favour of the abolition of this basic and fundamental right say that the present system costs too much and that the common law sacrifices the aims of rehabilitation in favour of pecuniary compensation. These are spurious arguments. The abolition of the common law right cannot be justified on the ground that it is a disincentive to rehabilitation. Nor can that loss be justified on economic grounds. Both those arguments were used by the Government in Victoria in 1985 to justify the introduction of its WorkCare scheme. Today, two years down the track, the Victorian WorkCare scheme is facing a huge deficit blowout and the prospect of a massive increase in premiums. The Government in that State has admitted that injured workers have no incentive to return to the work force and is undertaking drastic reforms in an effort to forestall a backlash from employers, trade unions and the community at large. In a mere two years WorkCare has generated roughly $2.4 billion in unfunded liabilities. A worse blowout could hardly be imagined. And the much-vaunted claims that WorkCare would be an incentive for injured workers to return to the work force-- 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 Duffy to present a Bill for an Act to authorise a further contribution by Australia to the International Development Association. Mr Duffy to present a Bill for an Act to authorise a further contribution by Australia to the Asian Development Bank for the purposes of the Asian Development Fund. Mr Duffy to present a Bill for an Act to authorise a further contribution by Australia to the International Fund for Agricultural Development. Mr Howard to present a Bill for an Act to amend the Flags Act 1953 to ensure that the Australian National Flag is not altered except with the approval of the Australian people voting in a referendum, that the Australian National Flag is not supplanted by use of the powers under the Act, and that the appointment of other flags and ensigns is subject to disallowance by either House of the Parliament. The following papers were deemed to have been presented on 18 November 1987: Commonwealth Teaching Service Act-Determination-1987-No. 3. Public Service Act-Determinations-1987-Nos. 79, 105, 106, 107 and 108.