Wednesday, 17 February 1988 Madam SPEAKER (Hon. Joan Child) took the chair at 10 a.m., and read prayers. Debate resumed from 16 February, on motion by Mr Howe: That the Bill be now read a second time. upon which Mr Connolly had moved by way of amendment: That all words after `That' be omitted with a view to substituting the following words: `whilst not declining to give the Bill a second reading, the House wishes to ensure the protection of the rights of non-custodial parents who have entered into maintenance arrangements to share in the cost of supporting their children at no extra cost to the Commonwealth, by not requiring these agreements to be registered with the Child Support Agency, except in the event that maintenance arrangements are not honoured'. Mr SNOW(Eden-Monaro)(10.01) —The developments within the Government Party leading up to the Child Support Bill 1987 have been very extensive. I congratulate the Minister for Social Security (Mr Howe) on the long process of consultation during which he has been associated with not only members of the Government Party but also the general public and organisations right across Australia. I believe that those intensive discussions have led to legislation which, in many ways, will be a world show- piece. The Minister and the committees of the parliamentary Australian Labor Party have had extensive discussions with not only sole parents but also non-custodial parents, organisations and community representatives, all of whom, I believe, have contributed to this successful piece of legislation. The discussions which I have had with non-custodial parents, for instance, have brought their problems to the fore. As we consider the problems of supporting children-the children of sole parent families-we need to consider some of the concerns of non-custodial parents, particularly the problem of access. Access is a formidable task for any government, even a court, to have to confront because every case is individual and different. There are non-custodial parents who are unable to look after their children. There are others who dearly love their children and who may be as good as or an even better parent than the custodial parent, the person who has been awarded custody. So inevitably there must be conflict in the unhappy position in which such families find themselves. Being a sole parent is overwhelmingly a female problem in Australia. The honourable member for Moncrieff (Mrs Sullivan) made that very clear in her speech. Recently I saw three female non-custodial parents on three occasions. I noticed that in each case there was quite severe distress and that seemed to me to contrast with the feelings of male custodial parents who seem, quite often, to manifest anger and resentment. These people do have problems. Many of the problems arise from conflicts which exist in the community about how we should deal with the poverty facing sole parent families in particular. There is a lot of conflict in the community. Traditionally, people say that young girls have children to get social security benefits, but I have seen little evidence of that. When I have examined individual cases I have found that the accusation, in most cases, is quite unwarranted. If it were true, simply to have children would be no great way of accumulating funds, because all the evidence shows that the poorest people in the community are families with children; and, of those, the sole parent families are the poorest. I know that occasionally there is abuse, but my experience more recently is that the Department of Social Security has become much stricter in policing the use of its social security benefits. Now I am finding that the number of cases of abuse are no more than the number of cases of harsh treatment alleged by the Department. Both are much lower than they used to be. We need to be a little less judgmental in the way in which we deal with sole parent families and a closer look at the problems needs to be taken. We do not even have to have compassion; we can have concern about the national economy and still appreciate that it is pointless being judgmental. In the months over which discussions have taken place we have learnt a number of things. Firstly, sole parent families have become an increasing burden on the Australian taxpayer-not because of sponging, even though that takes place at no more than the same level in other areas of abuse, including taxation, but because 70 per cent of non-custodial parents are not paying their way. Non-custodial parents do not always share the responsibility of procreation. Notice- ably, men are not always aware of being equal partners, at least, in the formation of a child, so the taxpayers have been left carrying a burden. Various means have been taken to ensure that the child support agency which is being set up will work. The long preparation which has occurred will mean that the Child Support Bill will work. I congratulate the Minister for Social Security for the co-operation that he has extended to the community. Non-custodial parents must be taken into account, especially the problems that some have with access. Many of them have a case and many do not. This must be examined properly. I am pleased that at the same time as the Government has been working on this legislation it has been looking at the legal aspects and the attitudes in, the practices of, and the counselling services in the Family Court, and the way in which they are helping or hindering the interests of both custodial and non-custodial parents. I am delighted at the way in which the Attorney-General (Mr Lionel Bowen) and the Minister for Social Security have accepted that it is the children we must be most concerned about. They both have accepted that, and that is why this legislation and the legislation that will accompany it will be successful. I am pleased to support the Bill. Mr RUDDOCK(Dundas)(10.09) —I welcome the opportunity to address the House on the Child Support Bill. I do so as one who has taken an interest in this subject over a long period. Although honourable members like the honourable member for Eden-Monaro (Mr Snow), who spoke prior to me, gave credit to the Minister for Social Security (Mr Howe) for introducing this particular Bill and commended his involvement in the issue and his consultation with members of his own Party and with the community, I simply note that the development of adequate maintenance provisions in our Family Law Act and adequate provisions for enforcement of maintenance payments where they have been ordered has been a matter of contention for a long period. The laws in this area have been developing over a long time and the proposals now before the House, to my recollection, were certainly developed as early as 1978, and in 1980 when the Joint Select Committee on the Family Law Act reported. I might say that the Attorney-General (Mr Lionel Bowen) was a member of the Committee when it dealt with the questions and was one of those involved in the deliber- ations which brought forward recommendations on which the child support agency is based; it is really the son of one of the specific proposals of the Joint Select Committee on the Family Law Act, and a provision which I believe deserves support and which was worthy of support a good deal earlier under the previous Government and under this Government. I want to take the opportunity to outline the provisions of this Bill as I understand it, the other amendments to the Family Law Act and the Social Security Act which are part of this scheme. They are further developments which are to occur and which were also foreshadowed in the Joint Select Committee's report on the Family Law Act. This Bill provides for the collection of certain periodic child and spouse maintenance payments payable under court orders and agreements which parties may have reached for the payment of maintenance. It provides for the establishment of a Child Support Register to be administered by the Child Support Registrar, who will be, as I understand it, the Commissioner of Taxation. The Bill also provides for the creation of a child support debt, whereby a child or spouse maintenance payment formerly payable to a former spouse-a person called the `payee'-under an order or agreement becomes, for the payer, a debt due to the Commonwealth. In other words, a person who has an obligation under a maintenance agreement or court order will now be obliged to pay maintenance as a debt due to the Commonwealth. There are provisions for the termination of the liability in certain circumstances and the scheme provides that, so far as practicable, the collection of periodic child or spouse maintenance be by means of automatic withholding deductions from salaries and wages of employees. We are told that the provisions are based very much on the provisions under which the pay as you earn (PAYE) instalment deductions scheme operates under the Income Tax Assessment Act. The collection of periodic child or spouse maintenance by means of direct remittance on a monthly basis for those who are not the subject of PAYE instalment deductions is also provided for. Of course, payment of maintenance collected by the Child Support Registrar will be effected by the Department of Social Security in the scheme that is outlined. Maintenance that becomes unpaid will be a liability that is payable to the Commonwealth. Presumably the Commonwealth and the child support agency will have to take steps to recover moneys that may not be covered by the collection of periodic payments or the automatic withholding deductions. There are penalties for employers and for payers for various offences, such as late payment and failing to provide information to the Registrar, and there are objection and appeal rights in relation to those matters. As I understand it, shortly stated, that is the scheme by which this legislation will operate. As the Minister for Social Security said in his second reading speech, that is one part of a scheme for child support. It is part one of the first stage. Of course, other legislation amending the Family Law Act which we discussed at the end of last year provides for child maintenance obligations to be given priority over all other commitments of non-custodial parents other than those necessary for their own support. I will come to that in discussion of the recommendations of the Joint Select Committee on the Family Law Act. This is an important development. It means that in future, when people move into reconstituted marriages, accepting new obligations, those new obligations will not be given greater priority than the obligations to maintain children and to provide some support to a spouse in a divorce or other such situation. We have seen a very significant change over time whereby the obligations to support children and families have shifted from parents-from spouses-to the state. One of the significant impacts of the proposals before us will be to reduce pension payments and to place greater reliance on maintenance collected by the Commonwealth. The amendments to the Family Law Act are the second part of the total scheme we have before us. The third part deals with the Social Security Act and provides for changes to the way in which maintenance is treated in the social security system. I have outlined generally the scheme covered by the Bill before us which, coupled with the other two Bills that will come before us dealing with amendments to the Family Law Act, which we have already discussed, and amendments to the Social Security Act, will give effect to the first stage of the scheme the Minister has announced. I want to put this matter in context because the financial consequences of divorce were the subject of very detailed discussion in chapter 5 of the report tabled in 1980 by the Joint Select Committee on the Family Law Act. The report recorded the history of the development of maintenance Acts in the various States of Australia from 1840. Maintenance has always been an important question and was first addressed by the States. There was very often a lack of uniformity and, when people moved from one State to another, there was difficulty in recovering the amounts that might otherwise have been ordered to be paid by the courts or that might even have been the subject of agreements. In the 1960s all the States substantially revised their maintenance Acts in an attempt to achieve uniformity, but even at that time it was obvious that those sorts of arrangements were not altogether satisfactory. In the 1960s we saw the introduction of the Matrimonial Causes Act in which the Commonwealth assumed, with the establishment of its divorce court system, a responsibility in the matter of maintenance. Maintenance in marriage and divorce situations became a matter of Commonwealth responsibility and purview. Before that, as I said, a great deal of that responsibility lay with the States. We saw other changes as well. In the beginning the question of fault was important. The question of whether one party had deserted another was an important one in determining whether maintenance might be payable, and even under the old Matrimonial Causes Act that situation remained. One of the principal reforms in the area of family law occurred in the 1970s with the introduction of the Family Law Act, when the Commonwealth further attempted to remedy the fragmented jurisdictional problems that existed in relation to property and maintenance, and we saw the elimination of fault as a factor in relation to the obligation to pay maintenance, particularly for children. Different arrangements were put in place for the collection of maintenance, which was left largely in the hands of the parties themselves. At the time the Family Law Act came into place there was a great deal of discussion about the relationship that ought to exist between the Family Law Act and the Social Security Act. Of course, there was provision in section 75(2) (f) of the Family Law Act whereby in determining maintenance obligations account would be taken of the eligibility of either party for Commonwealth or State pension benefits, and any rate of pension, allowance or benefit being paid to either party. The Joint Select Committee noted particularly in its report that the interpretation of this provision caused many problems. I must say that it was certainly a matter of great concern to the Committee and it was a matter to which the Senate Standing Committee on Constitutional and Legal Affairs gave consideration in its report on the Family Law Act when it was a Bill. Let me quote from the Joint Select Committee's report because it gives an indication of the thought that was being given to this question even in the period 1974-75: While the orders for maintenance and custody currently made by magistrates under State jurisdiction are substantial in number, the Committee recognises that a large part are caused by the Statutory requirement that deserted wives must apply for an enforce orders before their eligibility for (or continuance of) a deserted wife's pension is approved. We recommend that s. 62(3) of the Social Services Act . . . be amended to dispense with this requirement. It is a cause of unnecessary litigation and disharmony and the Department should be empowered to recover contributions from husbands without this requirement. Furthermore, Clause 52(2) (e)- that is, section 75(2) (f) as it ultimately became in the Act- of the Bill already contemplates taking into consideration of pension entitlements on applications being made for maintenance orders. This change should reduce substantially the volume of maintenance applications. Of course, that is exactly what happened. We saw a significant growth in the payment of pensions attributable to marriage breakdown following the introduction of these provisions. The Joint Select Committee, in its report, commented particularly: However, this growth precedes the introduction of the Family Law Act, and has been particularly apparent since the introduction of the tapered means test in 1969 which halved the severity of the income test as it applied to income and property in excess of the allowed free area; (b) the liberalised means test in 1972 which doubled the amount of income or property allowed before the means test commenced to operate; (c) and the introduction of the Supporting Mothers Benefit in 1973 and its expansion to the Supporting Parents Benefit. . . So the Joint Select Committee found that other factors were involved besides the amendments to the Family Law Act, but it went on to record in its report some of the artificial arrangements that developed afterwards to ensure that pensions were payable in the maximum number of cases. I have noted that, under the provisions of the Family Law Act where parties could agree to their arrangements, people would agree to arrangements which would maximise the pension payable and increase, as substantially as possible, the amount of income that was needed to maintain two separate households rather than one. It is obvious that, when people separate and two households have to be established and kept, costs increase. The question is: Who ought to incur those additional costs? Should those costs be charged against the general pool of taxpayers' funds or should they be charged to the parties themselves, particularly when they are in a position to afford it? We have seen, particularly where people agree, that very often these arrangements will be predicated on the basis that one spouse will apply for a social security benefit and the other spouse with an income will top up, by indirect means, the income that is available to the divorced spouse. The indirect means can often be by payment of the chemist bill, the department store account, the costs of running a motor vehicle or the payment of school fees. A whole variety of mechanisms have been used and agreed to which minimise the payment of maintenance that would otherwise be taken into account in assessing pension eligibility. I have to say that my experience was, as the Joint Select Committee deliberated on this matter, that the courts were sanctioning these arrangements. The responsibility had shifted from the parties to a marriage where there was a breakdown to the taxpayers. This led the Joint Select Committee to look at the whole scheme. We suggested amendments to the Social Security Act to require the courts to take into account these other matters. We also suggested the development of a scheme whereby the Commonwealth would take over responsibility for collecting maintenance. Under such a scheme pensions would be paid as they had been in the past but the Commonwealth would take over the responsibility of collecting maintenance to reimburse the Crown for pensions that might otherwise be paid. We were influenced particularly by developments that were occurring in New Zealand and the United Kingdom. In New Zealand a Supplementary Benefits Commission was empowered to recover the amount of benefits paid to a client from a liable relative under the provisions operating there. In the United Kingdom, as a result of the recommendations of the Finer Committee on One Parent Families, a scheme was developed which became the basis of recommendation 23 in the Joint Select Committee's report. Time does not permit me to outline fully the nature of those recommendations except to say that it was our intention that the Department of Social Security would undertake the responsibility of assessing and determining the particular amounts of maintenance that would be repaid. At the moment these questions are still left in the hands of the courts or the parties themselves to determine. Of course, the responsibility for collection, as a result of a decision by the Government, has been handed to the Commissioner of Taxation. This has been an interesting development. When the Joint Select Committee brought forward its report I was informed that the Department of Social Security was particularly unhappy about the recommendation. Obviously it won in the fight between departments that must have occurred. The Department of Social Security did not want to be a collection agency. It saw its role as being a payee organisation rather than a collecting body. It felt that its image would be harmed if it had to go out and be involved in ensuring that the Commonwealth's revenue was not attacked in this way. I must say that I was not particularly pleased to see that approach. Obviously the Government was influenced. The matter has been put in the hands of the person who is otherwise seen as an ogre, I suppose, by taxpayers. The Commissioner of Taxation has the obligation. The Minister said in his second reading speech that he sees the Commissioner of Taxation as having experience in collecting funds and, therefore, he is better placed to undertake this role. Madam SPEAKER —Order! The honourable member's time has expired. Mr COURTICE(Hinkler)(10.29) —The Child Support Bill 1987 is an important step in the process towards contributing to an improved quality of life for many children in our nation. Over half of the 800,000 Australian children living in poverty are in sole parent families. Some 70 per cent of non-custodial parents do not pay regular maintenance to their children. Inevitably, the taxpayers, through the social security system, are left to pick up the cost. Federal expenditure on sole parent income support has increased from $160m in 1973-74 to $1,757m in 1985-86, which is an increase in real terms of 245 per cent. Yet, it is essential to stress that in spite of this massive increase, many sole parents are still left in poverty. Ironically, in the majority of instances, these non-custodial parents are employed and are able to make a significant contribution to their children's support. The basic problem is one of ensuring that payments are made to help support children. The only way this can be achieved is through a collection system which does not depend on voluntary payment. The deduction of maintenance will be made automatically from wages or salaries. Clause 30 of the Bill creates a liability on the payer to pay child support to the Child Support Registrar. The Child Support Registrar will be the Commissioner of Taxation and this officer will be responsible for the administration of the legislation and the keeping of the Child Support Register. The Registrar will administer the Act through the child support agency, a non-statutory group within the Australian Taxation Office, and will have offices in each State. Orders for payment under the scheme will be made by the courts which will continue to assess and issue orders setting child and spouse maintenance levels. The amounts can be reassessed if circumstances change. This can be achieved by negotiating another agreement with the other parent or by seeking a variation in the order from the court. I notice that some amendments will be made to the Family Law Act to give priority to child maintenance by the courts, by placing child maintenance obligations above everything else except the basic self-support commitments of the parents and their dependants. Importantly, this changes the ludicrous situation where courts took into account social security benefits when determining maintenance benefits. The Department of Social Security estimates that significant savings will be made for taxpayers by requesting non-custodial parents to accept a fair share of financial responsibility for their children. Estimates for the 1987-88 Budget put the savings to taxpayers at $7.6m, increasing to $192.8m in 1989-90. I believe that the Bill will give sole parents, 90 per cent of whom are women, a new dignity. Many of these women have little prospect of entering the work force in the immediate future. I note that the honourable member for Moncrieff (Mrs Sullivan) is chairing a committee to investigate ways to facilitate the entry of women on pensions into the work force. I wish the honourable member and her committee every success in this project because it will have important social implications for women in these situations. At this stage I would also like to pay tribute to the contributions made by the honourable member for Forde (Mrs Crawford) and the honourable member for Hawker (Mrs Harvey) with regard to this Bill. I had a constituent come to see me. She was a deserted wife who was urging the Government to allow pensioners to earn more before they lost part of their pension. She was attempting to pay off a home with assistance under the first home owner scheme. She had three young children-two of whom were school age. Her desertion by her husband made her situation extremely marginal. At present, she is caught in a poverty trap. I hope that this Bill will increase her means of support. In most cases, the new scheme is compulsory for new applicants for sole parent pensions. These persons will have to take reasonable action, within specified guidelines, to obtain child maintenance in order to maintain their eligibility for their pension. The other group-and my constituent may be in this category-are sole parent pensioners who have a maintenance order or agreement which is less than three years old. In Queensland, the marginalising of single parents is especially acute for those women forced to live in Housing Commission Homes. The Queensland Housing Commission ties its rent to income. This means that in the past when sole parents have attempted to rid themselves of the shackles of a pension, the Housing Commission policy has dragged them back into their homes because they find they are working for nothing. In my own electorate of Hinkler, there is a severe rental housing shortage in Bundaberg. Many sole parents are forced to take up accommodation in caravan parks or in expensive rental accommodation. Women in such situations have only a work alternative to sustain them. In Bundaberg, most of the casual work is undertaken in the fruit and vegetable picking industry. The problem has been that women, at short notice, must find a carer for their children. In other instances, the financial pressure on sole parents places many children in the `at risk' category. I am pleased to say that in Bundaberg there are some excellent child care facilities that have helped in many ways to sustain women in this situation. The Baptist Church in Bundaberg runs an excellent family day care centre. The ladies in charge, Lorraine Frampton, Brenda Horan and Noelene Young, do a superb job on behalf of working families and single parents in Bundaberg. Children can be placed in the care of a day care mother at any hour of the day or night. The Minister recognised the important role being played in this centre by increasing the number of places to 125 full time places. This service has had the effect of increasing the alternatives for women in marginal situations. I also pay tribute to Kathy Hopper and the women of the Bundaberg Country Women's Association day care centre. Kathy and her staff care for 60 children at any one time, ranging from the very young to almost school age. Kathy is committed to child care and recently chaired a well attended meeting on child care regulations in Bundaberg. These women recognise the needs of women in the separated, divorced or deserted category. I stress that children are the greatest resource this nation has. I can only hope that the child maintenance payments made by either husbands or wives to the child support agency will improve the prospects for families abandoned by one or other parent. In an ideal world, people will meet their commitments. After all, this is what marriage is-a commitment. When people make a decision to have children, they are agreeing to take care, to the best of their ability, of the welfare of those children. When a marriage shatters-and unfortunately marriages do-it is the children who suffer. I only wish that people could receive proper counselling before deciding to end a marriage. In this way they would be totally comfortable with their decision. In my opinion, it is the guilt complex and acrimony resulting from a broken marriage which force or allow people to be remiss in their responsibilities to their family. Unfortunately, children from such break-ups who end in poverty have a poor role model to follow. It is to be hoped that improved maintenance provisions will give people and their children a decent standard of living with which to continue their lives. This Bill is of profound importance to the 800,000 children living in poverty. I congratulate the Minister and those members on both sides of the House who have had anything to do with its formulation. It is aimed at the elimination of child poverty and deserves the support of the community at large. As an instrument of social justice, it lays at the heart of what I believe in. Together with the family package introduced by this Government, this Bill will lift the living standards of some of the most needy in our community. Mr SHIPTON(Higgins)(10.37) —I am pleased, as an Opposition member, to take part in this debate on the Child Support Bill. It shows that in this Parliament there can be a degree of bipartisanship from Government and Opposition on important matters affecting the community, especially families and children. Opposition speakers including the shadow Minister, the honourable member for Bradfield (Mr Connolly), have pointed to the broad support given to this Bill. The Opposition has moved a constructive amendment which supports the general thrust of the legislation. It is interesting to reflect upon why this legislation is needed. It shows that there is a great breakdown in marriage in the community, in family responsibilities and particularly in parental responsibilities. It is necessary for us to examine some of the reasons and to seek answers as to why this is happening. This goes to the nature of the society in which we live and the sort of society in which children are being brought up, and the kinds of attitudes they will develop when they have families of their own. Certainly there has been an incredible breakdown in marriage and family responsibilities. Indeed, there has been an abdication of responsibility by parents who do not have custody of children-non-custodial parents is the term used. It shows a breakdown not only of responsibility but of parental discipline, as well as of discipline in the broader sense and a total breakdown in values. This is a poor reflection of the state of society. One has to examine why this has happened. The responsibility for family and parental matters has shifted to the Government, to the community, to the taxpayer. It costs the taxpayer $1 billion or more to provide support for children of parents who do not have custody and who have abdicated their financial responsibility. This measure is an intervention by government to try in an administrative and bureaucratic way to remedy a societal wrong. One does not welcome administrative and bureaucratic interference with families which results in setting up more bureaucracies. In many respects that interference probably adds to the problem. In the short term the Opposition sees that it is the only way to force parents who do not have custody of their children to be financially responsible for them. It is a regrettable step but governments have to act. In supporting this legislation I hope that it will be the start of a move in society to get parents to take more responsibility for their families. Parents have to be responsible for the children they bring into the world. Allied with the breakdown of responsibility and the breakdown of discipline we have a growth in the poverty of Australian families and of children. It is appalling that there are some 800,000 Australian children living in poverty. It is appalling that the Minister has to admit it-I am not saying that the Minister is responsible-and that we, on both sides of the House, have to debate legislation such as this. It is appalling that we have to admit that in our society today, because of a breakdown in the values about which I have talked, there are 800,000 children living in poverty, about 400,000 of whom are in the care of sole parents. These are the children on which this Bill is focusing in an attempt to remedy the situation. As has been pointed out, only 30 per cent of maintenance agreements made in the Family Court following the breakdown of marriages are met, which forces many sole parents to rely entirely on social welfare. This adds to the social security bill. It adds to the burden on the taxpayer and, with the abdication of responsibility, it puts many sole parents who are mainly mothers, and their children on the welfare treadmill. This is not something which either those families or society want. One problem allied with marriage breakdown relates to family values and responsibilities. Together with the financial burden on society caused by the shift of financial responsibilities from individuals to the community and the taxpayer, there has been an increase in the incidence of child abuse. In my own State of Victoria the incidence of child abuse is appalling. It seems to be on the increase. The voluntary agencies in the field in Victoria cannot cope with the problem. There seems to have been a complete breakdown in the Victorian Department of Community Services. The agencies in the field cannot cope with the number of cases of child abuse. When a matter of child abuse is brought before a court-mainly a magistrates court-and a care and protection order is sought, the court cannot give orders because there are no backup services to support either the family or the child involved. In my State there has been a total breakdown because resources are not available to support a child, where there is suspected abuse, and there is no investigative facility to determine the position. There are just no resources available. The police support group is overloaded and there are not enough social welfare workers. People in voluntary agencies are trying to carry the burden to the best of their ability, but there is no governmental support of any sort for the child and family involved in such terrible abuse. I hope that something will be done by the Victorian Government. All these matters are interlinked-family breakdown, breakdown in values, increased poverty and breakdown of discipline. As I have said, regrettably the legislation reflects the sad state of affairs in society today and it takes place in an environment in which the poor are getting poorer, the rich are getting richer, and more and more Australian families are in poverty and there has been an increase in the social welfare burden because of the shift of responsibility from individuals to the taxpayer at large. I hope that the legislation will work. I hope that the enforcement of maintenance orders will come about because of it. I hope that, in carrying out the intent of the legislation, there will be a minimum of bureaucratic administration and interference with families. At the end of the day, those who bring children into the world have a responsibility to care for those families to the best of their ability. Tragically, that is not happening in society today. As a member of the Opposition, I support the thrust of the legislation. In doing so, I support the position of the Opposition shadow Minister and his amendment which says that non-custodial parents who have not claimed upon the state, are abiding by their maintenance agreement and are exercising responsibility should not be subject to the legislation. Of course, once they fail to abide by their maintenance agreement, once they fail to honour their responsibilities, the Opposition says that they should be subject to the provisions of the Child Support Bill generally. Mr FITZGIBBON(Hunter)(10.47) —I am pleased to have the opportunity to speak in support of the Child Support Bill 1987. This is a very important Bill and it deserves the bipartisan support of this Parliament and the community at large. It is an integral part of the Government's strategy to eliminate child poverty in Australia by 1990. The Bill represents a major step towards social justice for children who, through no fault of their own, find themselves without the benefit of both parents to support them. The majority of supporting parents rely on the social security system as their sole income support. While this Government has done much to improve the system, children without adequate support from both parents have been condemned to a life of poverty simply because non-custodial parents have been able to walk away from their responsibility for their children. Statistics reveal that only 30 per cent of non-custodial parents actually contribute to the welfare of their children, while 70 per cent do not. Today approximately 250,000 sole parent families with 450,000 children rely on government support for their income. In most cases, non-custodial parents are in the work force and are able to contribute towards the financial support of their children. Why should such parents have the right to turn their back on their children and expect the Commonwealth to pick up the responsibility and support their children? It is the responsibility of both parents to support their children. Children have the right to financial as well as other support from both their natural parents and, following separation of parents, they have the right, so far as it is possible, to have their previous standard of living maintained. The failure of the maintenance system has been a contributing factor to the increase in poverty among women and children. In the past, successive governments have tried to grapple with the problem of child maintenance but it has proved extremely difficult to enforce and collect. Under the Family Court of Australia, child maintenance payments often have been inadequate and set at low levels, with little regard to the capacity to pay. The difficulties associated with collecting maintenance were often considered too great for the meagre reward and the system has proved costly, drawn-out and cumbersome. There was widespread agreement that the current system of child maintenance was in need of reform. In 1980 the parliamentary Joint Select Committee on the Family Law Act recommended that an agency to collect and enforce maintenance be set up along the lines of agencies already operating in South Australia and Western Australia. That recommendation was endorsed by a report of the Attorney-General's Department in 1984. The report also provided much evidence concerning the inadequacies of the existing system. The South Australian system, while it was very effective in obtaining and collecting maintenance, assisted less than 30 per cent of the South Australian sole parent population, which was not much more than other States without similar agencies. This Government, determined to resolve this issue, set up a ministerial committee at the end of 1985 to examine various options and, in 1986, released the excellent discussion paper Child Support which canvassed the issues which needed to be resolved. Widespread community consultation was undertaken and submissions were received from groups active in the maintenance area. The legislation before us is the centrepiece of the Government's child support scheme, and sets in train the first stage of the scheme. As the Minister for Social Security (Mr Howe) stated, when fully developed it will be one of the most effective systems of child support in the world using administrative assessments, judicial discretion in disputed cases and automatic income withholding to benefit children who are not cared for by both parents. It is interesting to note that countries such as the United States of America, Sweden and New Zealand, have implemented various systems of collection of child maintenance but have continued to have problems. Now those countries are piloting the approach we are about to implement in Australia. The only way to ensure children receive the support to which they are entitled is by a collection system that does not depend on voluntary payment. No longer will non-custodial parents be able to shirk their responsibility. They will have to face up to the obligation to provide adequate financial support for their children. This Bill will establish the child support agency within the Australian Taxation Office and the Child Support Registrar, who is to be the Australian Commissioner of Taxation. Each Deputy Commissioner of Taxation will be a Deputy Child Support Registrar. The child support agency will collect child maintenance and, in some cases, spouse maintenance, from non-custodial parents, through automatic deductions from wages and salaries and, in the case of self-employed persons and others, by compulsory monthly payments. A Child Support Register will be established which will record details of maintenance liabilities that will be enforceable under the Bill. The Child Support Registrar will be responsible for the administration of the Bill and the keeping of the Child Support Register. As stated in the Minister's second reading speech, the Bill is drafted in such a way that all child maintenance liabilities that are payable on a periodic basis under a court order or a registered maintenance agreement are registrable on the Child Support Register. In all cases where a person receiving maintenance is in receipt of an income-tested social security benefit or pension, the child support agency will collect the maintenance. Once this Bill is enacted, sole parents applying for social security benefits will be required, within three months of their application, to lodge with the courts a maintenance order, which will be enforced. In the past, many sole parents have been discouraged from seeking child maintenance, for a variety or reasons, including harassment, violence, and other reasons, simply because it meant that they had to maintain contact with their ex-partners. But collection of child maintenance through the child support agency will mean that these sole parents do not have to maintain that contact with their ex-partners. The child support agency will take over the functions of State collection agencies. Upon receipt of advice from the child support agency, employers will be legally bound to deduct such amounts as determined in the same way as normal tax deductions are made. Secrecy provisions are incorporated in the legislation, making it an offence for any employer to divulge information about employees for whom they deduct maintenance payments. Secrecy provisions also pertain to Commonwealth officers involved with administration of the scheme. Anti-discrimination laws will apply to employers with regard to future employees registered on the child maintenance register. Self-employed persons and other non-wage and salary earners will be required to make regular monthly payments to the child maintenance collection agency, and the legislation imposes penalties for late payment, either by an employer or by self-employed persons. The child support agency will set up a child support trust account to which will be paid amounts received from employers and from payers of enforceable maintenance liabilities. Under this legislation it is intended that the Department of Social Security will make payments to payees on or before the first Wednesday following the end of the previous month of collection. The payments will coincide with the payment of child allowance. The Registrar, upon registration of a maintenance liability, is required to notify in writing particulars entered in the Register to the payer and payee. Provisions are incorporated in the legislation to enable persons to lodge objections against decisions through recourse to the courts. Significant changes have been made to the Family Law Act relating to access and custody, guardianship and maintenance of children. Further legislative changes will be necessary to the Social Security Act when stage two of the child support scheme is finalised. The problem of collection of child maintenance is a delicate and sensitive issue and I am proud of the way this Government has handled the situation. For far too long the burden of support of sole parent families has rested upon the Australian taxpayer. This legislation places the onus of responsibility on non-custodial parents to provide adequate financial support for their children until they reach the age of 18. Of course, the ideal situation would be for marriages to remain intact, but the sad reality is that an increasing number of families do break down, and for most children this represents a dramatic change in their circumstances and expectations. The child support scheme will give back to these children the right to expect adequate financial support. Every member in this House would have been approached on numerous occasions by sole parents seeking advice on how they are to enforce maintenance orders. Under the Child Support Bill occurrences of this nature will not develop. Once parents lodge a maintenance order with the courts, that maintenance order will be enforced. This Bill will do much to alleviate the poverty among children and improve their living standards. I congratulate the Minister for Social Security on this significant Child Support Bill. I am proud to support the Bill and commend the Bill to the House. Mr HOWE(Batman-Minister for Social Security)(11.00) —The debate on the Child Support Bill from honourable members on both sides of the House has been extremely constructive. I congratulate and thank all members of the Government and the Opposition for the very thoughtful way in which they have approached this debate, for the constructive way the debate was pursued and for the recognition of both the sensitivity and the great importance of the proposed child support scheme. I shall make one or two introductory comments and then work my way through some of the principal issues raised in the debate. Apart from specific points made by the honourable member for Bradfield (Mr Connolly), the only caveat which I had and about which I felt somewhat annoyed was the suggestion that the Government was interested only in savings. Nothing could be further from the truth. As was suggested by a number of honourable members on both sides of the House, the scheme will be extremely relevant to and supportive of the overall Government objective of reducing and eliminating child poverty by 1990. It is certainly true that the benefits, if you like, of the child support scheme are shared between the custodial parent and revenue. The Government has made very substantial commitments to assisting sole parents. The Government wishes to create the circumstances whereby a significant proportion of sole parents who are currently in poverty are lifted out of poverty, not only through income support by way of social security assistance to sole parents but also through a range of policies. It would be understood by the honourable member for Bradfield and people participating in the debate that one of the principal problems that sole parents face is exclusion from the work force. We intend to go further along that track in particular. One other incidental point made by the honourable member for Bradfield was that the Government ought to address the problems of sole parents where there are no non-custodial parents. Of course, as the honourable member for Bradfield would be aware, we have increased the mother's guardian's allowance from $6 to $12, but there are in the social security review paper by Professor Bettina Cass further recommendations that the Government has not yet addressed. The government has implemented some of the recommendations of that review, but this year, as part of the family package, the Government intends to study in detail the sole parent review paper and the unemployment benefit paper that was released several weeks ago. In the next few weeks the Government is also expecting to receive a paper on disability from Professor Cass. Particularly within the context of the transition to work theme that runs through each of those three papers, we will again examine the situation of sole parents and the recommendations that Professor Cass made. We would not want the House or any honourable members to think that that situation of sole parents, where there are no non-custodial parents, would not be considered. If it is being suggested that sole parenthood itself deserves some additional assistance where children are involved, certainly that is a view that the Government has, and it will consider what further measures can be taken. The Opposition amendment refers to people who are supporting their children without resort to pensions or benefits. It expresses concern that agreements in these cases not be required to be registered with the child support agency. Some Opposition members, particularly the honour- able members for O'Connor (Mr Tuckey) and Gippsland (Mr McGauran), have referred to a different issue-the question of when automatic withholding from salary or wages will apply. There is clearly some confusion in the Opposition about these issues. That is understandable. The issues are quite complex, and I shall explain the Government's policy in detail. Firstly, a major defect in child support is the lack of any national register of child support orders or agreements. Currently child support orders and agreements are filed in every Magistrates Court, every Family Court register and most Supreme Court registries around the country. This creates tremendous practical problems. For example, if a couple separate in Broome, they will often get a maintenance order from the Broome Magistrates Court. If the custodial parent moves to Melbourne or Sydney and wants to enforce or update that order he or she will have to contact the Clerk of the Court in Broome to try to get a copy of the order. Often enforcement proceedings in such cases will have to be taken to Broome. Therefore, the first thing we would want to do is to move to a comprehensive national register so that separated parents can enforce and comply with their obligations wherever they live in Australia. Secondly, whenever a custodial parent is not on a pension or benefit there is absolutely no compulsion to participate in the scheme in any way. All orders of the court made after the commencement of the Child Support Act will be entered on the Register so that we achieve the national register I mentioned earlier. Whenever a custodial parent is not on a pension he or she can simply choose not to participate in the scheme by notifying the Registrar to do nothing; then nothing will happen. The order is simply on the national Register for either party to enforce or seek varied if they wish. This is the central issue that the honourable member for Richmond (Mr Blunt) did not understand. An order being on the Register is not the same as the order being enforced by the agency. There is no bureaucratic involvement just because the order is on the Register. The honourable member for Bradfield seemed to suggest that the non-custodial parent should be able to choose not to have the scheme apply even though the custodial parent wants the child support agency to collect the maintenance. The Government is committed to ensuring that the custodial parents receive maintenance on a timely and regular basis. That is one of the objects of the Bill set out in clause 3. If a custodial parent makes the judgment that she or he needs the assistance of the child support agency to get that maintenance on a timely and regular basis, we do not think we should say, `You cannot use this agency to get your maintenance until you can show that it has not come through'. Under this scheme maintenance will be income for custodians and their children to live on. The Government does not accept that custodial families should go without that income for a few months before they have some security that their maintenance will come through. The honourable members for Gippsland and O'Connor argued that non-custodial parents should be required to have maintenance automatically deducted from their salaries only if they default on paying maintenance orders. This would continue the present uncertainty of income that custodial parents face. This scheme aims to ensure, so far as possible, that those parents can count on a regular level of income to provide for their children. If default was the trigger for automatic withholding, children would have to go without. The present system proves that this would happen in many cases. There is no need to put those families through that insecurity when we have a system to help. There is no stigma attached to automatic withholding and we do not want to create one. Automatic withholding is an efficient collection of money at its source. If default was necessary to apply automatic withholding great stigma would be caused by it in every case. The honourable members for Bradfield and O'Connor raised the question of the burden on employers. The Government is conscious that we cannot impose undue burdens on employers, while recognising that their participation in the scheme is critical. We have consulted with them widely and we have restricted their involvement to the minimum necessary to operate the scheme. For example, employers will have to make deductions only when advised to do so by the child support agency. They need not seek information from their employees about their maintenance obligations. They will deduct the same amount each payday, just like credit union deductions. They will be required to do a lot less than is required under the present system of garnishee orders which can result in their making a variety of payments to a number of courts throughout Australia. The honourable member for Sturt (Mr Wilson) expressed concern that the Government proposes to exclude some people from using the agency. The Government has put an initial restriction on the number of people eligible to use the scheme, because if there were unrestricted access to the child support agency, staffing and resource implications could make the scheme unmanageable. The number of people who presently have child maintenance orders is difficult to establish with certainty but it is estimated that an additional 200,000 people could seek maintenance collection if there was unrestricted access. For this reason we propose to gradually assume responsibility for collection orders lodged with State collection agencies. We have defined the population to be covered by the regulations so that if there is spare capacity in the system to broaden the coverage there will be flexibility to do so. The honourable members for Forde (Ms Crawford), Hawker (Mrs Harvey), Fisher (Mr Lavarch), Moncrieff (Mrs Sullivan) and Sturt made very thoughtful contributions on the sole-parent policy generally. The Social Security Review has examined many of the issues raised by these members. The Government will consider them this year. The general thrust of its approach is to improve the adequacy of income support for those sole-parent families in poverty, and this Bill is a central part of this strategy; and to break down barriers to sole parents working. The honourable member for Hinkler (Mr Courtice) so clearly spelt out that this involves labour market programs and child care. It also involves substantial changes to the way pensions are income tested. The separate income test on maintenance to be introduced in the social security amendments for the child support scheme are a crucial part of this. We also wish to put an end to the practices that have encouraged sole parents in the prime of their working lives to feel that they must stay on a pension for an extended period. The honourable member for Sturt referred to problems that could occur by sole parents colluding with their spouses to maximise pension and to obtain a combined living standard higher than if the marriage had stayed intact. The sole-parent issues paper of the Social Security Review and the work of the Institute of Family Studies and the economic consequences of family breakdown show that this is certainly not a common problem. There are features of the child support scheme which stop collusion between the spouses. We will income test all maintenance regardless of its form, including in kind maintenance and capital maintenance, and collection by the agency will make it impossible to hide maintenance and avoid income tests. The honourable member for Gippsland asserted that this Government has cut funding to marriage counselling organisations. This is simply untrue. In the past year we have increased funding for marriage counselling by $920,000. The Attorney-General (Mr Lionel Bowen) is very strongly committed to maintaining this service to families to help families to form and maintain strong and healthy marriages. In this scheme we are integrating the social security and family law systems and balancing the interests of all involved. Most importantly, we are providing for the children of separated and divorced parents a better standard of living and greater income security. More custodial parents can expect regular and timely maintenance payments and will no longer be left to pursue maintenance enforcement as best they can on their own. Non-custodial parents' concerns have been taken into account. Wherever separating or divorcing parents can make arrangements in an amicable way, they will continue to be able to do so. There are provisions to protect non-custodial parents' privacy. They will be required to pay only according to their capacity, and deductions will never be made below an appropriate level for their own self-support and that of their dependants. I again say that the contributions made by every member of parliament participating in this debate have been very constructive. As I said earlier, I was very impressed by the thoughtful way in which all contributions were made. Great concern was expressed about the need for much greater adequacy of support, particularly concerning children, for sole parent families. I think that concern came through very strongly on both sides of the Parliament. Very great concern was expressed that we achieve a more equitable sharing of the burden of responsibility; that there be greater fairness in the area of maintenance. I think there could be nothing less fair, as the honourable member for Moncrieff said, than the current situation in which maintenance is such an arbitrary matter. In enforcing, through the child support agency, the responsibility of non-custodial parents, one is moving away from the existing arbitrary situation to one which is marked by much greater fairness. I think we in the Parliament are all concerned about incentive, or what I would prefer to call `opportunity'-the need to provide greater incentive or greater opportunity for sole parents not simply to achieve a living standard which is above the poverty line but in a real sense to participate in the mainstream of the community. We know that at the moment there are all the barriers in the world to that occurring. I thank honourable members for their contributions. Amendment negatived. Original 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. Motion (by Mr Howe) proposed: That the Bill be now read a third time. Mr DONALD CAMERON(Moreton)(11.18) —I wish to make a short comment about the summary given by the Minister for Social Security (Mr Howe). I missed part of his summary during the trip here from my office, at the far end of the House. The Minister has rightly congratulated all members of the Parliament on a fairly moderate approach to the legislation before the House, but one thing that causes me distress is the continuing failure of government to come to grips with the root cause of the huge growth in the number of supporting parents. In my speech last night in the second reading debate I read figures provided by the Department of Social Security relating to separated wives. They showed a growth from 9,000 in 1974 to 14,000 in 1975; 20,000 in 1976; 23,000 in 1977; 24,000 in 1978; 25,000 in 1979; 28,000 in 1980; 53,000 in 1981; 64,000 in 1982; 73,000 in 1983; 83,000 in 1984; 94,000 in 1985; 102,000 in 1986; and-another jump-106,000 in the year that has just ended, 1987. According to the Government, the intention of this legislation is one of compassion and a determination to lift these people from the floor of poverty. We all go along with that principle-the Minister has no argument-but the Government is shutting its eyes to the need to reform the family law legislation, which is allowing the rampant breakdown of marriage to continue in this country. The very growth in the figures I have given shows how the marriage breakdown phenomenon has continued unabated. Last night I made the plea to the Minister and to the Government that they look at the family law legislation with a view, particularly where children are involved, to extending the period of separation required for eligibility for divorce from one year to two years. Rocky marriages are not confined to the latter half of the twentieth century. They have always existed, but in days gone by it was not quite so easy to bail out of marriage as it is today. In the old days, because it was not easy to get out of marriage, the problems of marriage were often settled because people worked them out for themselves. Today we continue a system where by people say, `Bye, bye; I am off'. I believe that government has a responsibility to ensure that divorce, whilst not impossible by any means, is not made so easy. While we have a moral obligation to rid Australia of poverty, we also have an obligation to look at emotional poverty. All the average child wants is parents who are together and to be living as part of a family unit, rather than being the child of a broken marriage. That is the least preferable, unless, as I said in the House last night a child is born into a house where there are bashings and brutality. I ask the Minister genuinely, out of deep concern at the escalation in divorce this nation has witnessed since 1974, since the advent of the supporting parent's benefit, to turn his attention to this. We have an obligation in this area. Mr HOWE(Batman-Minister for Social Security)(11.23) —in reply-I shall respond very briefly to the honourable member for Moreton (Mr Donald Cameron). I heard what he said last night. I meant to look up the figures in relation to divorce but I did not get around to doing it. Mr Donald Cameron —My figures are from your Department, so they are right. Mr HOWE —I am not disagreeing with the honourable member's figures, but I would have thought that there had been a sharp reduction in the rate of increase in divorce in the last two or three years. I am not sure that the honourable member's picture of an exponential rate of increase specifically in relation to divorce is correct. Mr Donald Cameron —I concede that that is not necessarily the measure. Mr HOWE —The honourable member concedes it. I understand that. I was quite impressed with the speech of the honourable member for Moncrieff (Mrs Sullivan) concerning this point. I think one has to be massively impressed with the suffering that women particularly have had inflicted on them as a result of the increase in marriage breakdown that certainly occurred in the late 1970s and the costs that they bear as a result of that. I found the comments of the honourable member for Sturt (Mr Wilson) on that matter to be a little incredulous. It seems to me that the facts are clear in terms of the work of the Institute of Family Studies on the relative increase in the living standards of the non-custodial parent and the massive depreciation of the living standards of the custodial parent. I think there is a terrible unfairness in the current situation. But I take the point that I thought was made clearly by the honourable member for Moncrieff that one needs to be very careful about making judgments or seeking to reverse the changes that occurred in the 1970s. I think that is just a point of disagreement between the honourable member and me and certainly between the Government and the honourable member. We think the changes that occurred in relation to family law basically were very positive changes and were particularly in the interests of women. But that is not to say, as the honourable member for Moncrieff said, that there were not some unintended consequences as a result of those changes and that there were not some inequities and injustices that needed to be addressed. In part, that is what this legislation seeks to do. Question resolved in the affirmative. Bill read a third time. Consideration resumed from 10 December 1987. Mr STAPLES(Jagajaga-Minister for Housing and Aged Care)(11.26) —On behalf of the Minister for Transport and Communications Support (Mr Peter Morris), I move: That the Bill be now read a second time. This Bill relates to a decision announced in the Budget context concerning Australian Airlines' superannuation arrangements. Australian Airlines is currently the only approved authority under the Commonwealth superannuation scheme which is exempt from full cost recovery of employer contributions. This situation has been seen by other approved authorities as resulting in inequitable treatment. The Australian National Airlines Commission (ANAC) will be required to meet the full accruing costs in relation to those of its employees who are members of the Commonwealth superannuation scheme. The change has an effective date of 1 July 1987. From that date the Commission will therefore be treated in the same manner as all other authorities in respect of the employer costs of providing superannuation benefits to employees who are members of the Commonwealth superannuation scheme. At present, section 32e of the Australian National Airlines Act 1945 exempts the Commission from the provisions of the Superannuation Acts 1922 and 1976 that require approved authorities to meet the full employers costs of benefits. The section also in effect limits the employer costs in respect of Commonwealth superannuation scheme members to the level which applies to Australian Airlines' ground staff superannuation scheme. The amendments proposed in this Bill will continue the exemption from the relevant provisions of the Superannuation Act 1922 to make it clear that the Commission has no further liability in respect of employees whose service ceased before 1 July 1976. However, the Commission will become liable to meet the full costs accruing from 1 July 1987 in respect of benefits payable under the Superannuation Act 1976. An actuarial assessment will be made of amounts that will become payable to persons becoming beneficiaries after 30 June 1987 in respect of their service after that date. It will then be determined what fortnightly employer contributions the Commission should make to the Consolidated Revenue Fund that will provide, with an allowance for imputed interest, for those benefits. An arrangement under subsection 159 (2d) of the Superannuation Act 1976 will then be entered into whereby the Commission will be required to make the necessary payments. It is estimated that the Commission's employer contributions will be increased by $4.9m in 1987-88 as a result of the changes announced. This increased cost was taken into account in setting the ANAC's dividend for 1986-87, which is payable this financial year. An effective date of 1 July 1987 is provided for under transitional provisions in the Bill. Action relating to the calculating of the Commission's liability and the entering into of an arrangement for payments will be regarded as having effect from that date. Payments made from 1 July 1987 under the provisions now being omitted will be treated as made under section 159 of the Superannuation Act 1976. It is also made clear that the Commission will not be required to make employer contributions in respect of a period of service before 1 July 1987. I commend the Bill to the House and present the explanatory memorandum. Mr BEALE(Deakin)(11.30) —I think it is indicative of the Government's confusion about the airline industry that the Minister who introduced the Australian National Airlines Amendment Bill today-an airline Bill-is the Minister for Housing and Aged Care (Mr Staples). The daily program sheet shows that the Minister for Immigration, Local Government and Ethnic Affairs (Mr Holding) was due to make the second reading speech in the House. So we do not have the Minister who is responsible for this legislation, we do not even have the Minister for Immigration, Local Government and Ethnic Affairs, who was responsible last week for this Department, but we have the Minister for Housing and Health Care. Mr DEPUTY SPEAKER(Mr Blanchard) —The Minister for Housing and Aged Care. Mr BEALE —That is even better, Mr Deputy Speaker. I wish the Minister for Transport and Communications Support (Mr Peter Morris), who is responsible for this Department, a speedy recovery from his illness. We will be very glad to have him back in this portfolio. It will give us a chance to get some answers to the Amann Aviation Pty Ltd affair where Australia's northern coastal surveillance was placed in jeopardy by his decision to award that contract to a company without planes, facilities or pilots. It will give us a chance to question the Minister about the mess in his Department, about what is going on with the Federal Airports Corporation, the Department and the new Civil Aviation Authority. The Government could not manage to bring this Department under control; instead it has broken it up into three bodies: the Federal Airports Corporation, the Civil Aviation Authority and the Department. I just point out that, in the document released yesterday by the Prime Minister (Mr Hawke) on ministerial arrangements, the Minister for Transport and Communications Support, who is the Minister responsible for this legislation-not the Minister for Immigration, Local Government and Ethnic Affairs or the Minister for Housing and Aged Care-is shown as having the responsibility for `general assistance in the administration of the portfolio'. The Prime Minister does not know what he has on his hands. If the administration of the portfolio by the Minister when he was previously in charge is any indication, we will have the same sorts of difficulties and fiascos arising as we had when the Minister for Employment and Education Services (Mr Duncan) was the responsible Minister. This Bill proposes to amend the Australian National Airlines Act 1945 to transfer from the Commonwealth to Australian Airlines full financial responsibilities for employees of Australian Airlines presently in the Commonwealth superannuation scheme. This measure was announced in the Budget and, as such, the Opposition will not formally oppose the Bill. I move the following amendment: That all words after `That' be omitted with a view to substituting the following words: `while not declining to give the bill a second reading, the House condemns the Government for: (1) placing Australian Airlines at a $4.9 million per year competitive disadvantage with its major competitor, Ansett Airlines; (2) failing to defer this measure until the Advisory Group on Australian Airlines has reported to the Government in March 1988- that is, in two weeks time- on Australian Airlines future capital requirements, especially considering that the Advisory Group's terms of reference include a specific reference to Australian Airline's superannuation; (3) its complete failure to openly announce its intention to privatise Australian Airlines; (4) creating unnecessary uncertainty among Australian Airline's employees as to their future; and (5) its continuing poor administration of Australia's aviation policy and especially the nation's aviation infrastructure'. Australian Airlines will be disadvantaged by this measure to the tune of $4.9m a year. Any money taken at this time from Australian Airlines is quite incompatible with the report that we saw referred to yesterday in the Australian newspaper. This report, which has now been released by the Government, is headed Australian Airlines, Discussion Paper by Senator Gareth Evans, Minister for Transport and Communications. We did not find out about this report through any magnanimous gesture from the Government towards an informed debate on privatisation and how much money Australia needs. We found out because some caring soul in Caucus decided that it would be in his political interests to leak the document that Senator Evans had prepared. However, the Government has now released the papers. I should quote some parts of the report that was released by the Government. The article in the Australian states: Australian Airlines requires at least $250 million in additional equity over the next three years to cope with changes in the industry, according to Senator Evans. This is at a time when the Government proposes to take $4.9m away from Australian Airlines. Senator Evans then goes on to argue that it would be possible to raise these funds by selling 49 per cent of the airline. The paper also argues that there are no aviation or competition policy reasons that require the complete public ownership of the airline. Senator Evans argues that public ownership of Australian Airlines would provide an absolute guarantee against the emergence of a private interstate airline monopoly but that the same outcome-that is, the prevention of a monopoly-can be assured by making Australian Airlines a viable competitor. The report goes on to add two other telling matters, particularly in relation to this particular piece of legislation. It says: Information is not currently available from the Australian Government Retirement Benefits Office on the superannuation benefits paid to the Australian Airline's CSS- Commonwealth superannuation scheme- members and former members . . . nor on the extent of the Commonwealth's unfunded liability of the CSS fund in respect of Australian Airline's CSS members. What this is saying is despite the fact that the Government is now legislating to take another $4.9m from Australian Airlines, it does not really know what Australian Airlines' obligations are in regard to superannuation benefits payable to its employees. The report goes on to say in relation to whether Australian Airlines could obtain this money from loans: . . . a continuation of increases in borrowing levels of this magnitude- that is, the magnitude required to enable Australian Airlines to compete effectively in the domestic airline industry- may be difficult to accommodate. So, finally, the Government is coming to understand-or so this paper would have us believe-the economic reality of running an airline. Senator Evans argues that the essential $250m for Australian Airlines could be obtained by the Government accepting a lower rate of dividend, but that this would be unacceptable because of the burden it would place on the Budget. This has not stopped the Government bringing in a Bill which is going to cost Australian Airlines another $4.9m and which, in the context of the document leaked the day before yesterday and released yesterday, Australian Airlines simply cannot afford. The only way to solve Australian Airlines' woes and thereby preserve it as a viable force in the Australian domestic airlines industry is to transfer its ownership from the public sector to the private sector. This has now been recognised by the Government in this leaked document. Later this week the Government intends to introduce a Bill to convert Australian Airlines into a public company. This is an obvious forerunner to privatisation. I regret that the Minister for Defence (Mr Beazley), who has just left the chamber, is not here now because it was he who, in 1984, was responsible for repealing legislation that the coalition had passed in 1981 to convert Australian Airlines into a public company. It is a perfect example of the hypocrisy of the Government that it now intends to introduce legislation which is the same as legislation passed by the coalition previously that was repealed by this Labor Government. How can this Government be taken seriously when by this action it is admitting that it was totally wrong in repealing the former legislation and that it has therefore handicapped Australian Airlines by restricting its adjustment to the commercial aviation world by a period of four years? If the Government had had the simple foresight to try to put its house in order four years ago instead of continually giving into its outdated ideology, Australian Airlines and a whole range of other government organisations would be in much better shape to face up to the realities of our economic world today. The fact that this Government has not even waited for the report of the advisory group on Australian Airlines, which as I said earlier is due to report in March, is an indication that it is completely disinterested in anything other than pushing ahead with this fund-raising piece of legislation. To make matters worse, the Minister who was responsible for sitting on this mess for so long, the honourable member for Shortland (Mr Peter Morris), has now been reassigned as the Minister for Transport and Communications Support. It will be interesting to know how the Minister, who now returns to this portfolio, will react to being in a junior position to the Minister for Transport and Communications, Senator Evans. Needless to say, I should go on to point out that the Minister in the middle of the three Ministers who have had this job over the past few weeks, the Minister for Employment and Education Services, when he was the Minister for Land Transport and Infrastructure Support, wrote a letter to the Australian Financial Review on Monday, 11 January, on the privatisation debate which, as honourable members know, is running hot in the Australian Labor Party. He said: In other words, Australia's primary problem is investment, not foreign debt. It is interesting that the Treasurer (Mr Keating) continually alludes to the fact that Australia's major overseas difficulty is the level of its foreign debt, and so he should because when he came to power, when he got the job as Treasurer, Australia's net overseas commitments amounted to about $25,000m. Now they are on their way to above $90,000m; they are on their way to $100 billion. I do not know what the then Minister for Land Transport and Infrastructure Support knows about economics, but it is clear from this letter that his participation in the privatisation debate will not be taken very seriously by the Treasurer. Unfortunately this Government's policy on superannuation is not on the way out in the way that the Minister's comments on privatisation are on the way out. We could say that the Australian Labor Party does not even have a policy on superannuation at present because of the Treasurer's continual refusal to come clean on what he intends to do with superannuation. To date the Government has canvassed several options, all of which seem to be aimed at frightening anyone who has a superannuation commitment. Let me list for honourable members some of the options that the Government has been canvassing in regard to superannuation: firstly, a retrospective tax on lump sum payouts; secondly, a tax on superannuation funds' income; thirdly, block access to lump sums; fourthly, tighter assets and income tests; fifthly, the removal of the tax deduction for employer contributions, which is another belt at business; sixthly, the inclusion of superannuation as part of the fringe benefits tax arrangements; and seventhly, the introduction of a levy to fund the basic pension. Perhaps what is happening in New Zealand gives us some guide to what the Government is considering here because the New Zealand tax model has been frequently mentioned as setting the pace for taxation changes that may take place in Australia. The changes recently announced by the New Zealand Government effectively remove all tax incentives on superannuation contribution with the introduction of a 24 per cent fringe benefits tax paid by the employers and a 25 per cent tax on superannuation fund income. It is therefore very important that the Treasurer announce, as quickly as possible, what he intends to do about superannuation. We all know that this indecision surrounding the Government's policy on superannuation has been scaring the wits out of anybody who has been contributing to superannuation funds over the years. Nowhere is that more serious than in Australia's airline industry, both domestic and international. In the last three weeks alone, Australian Airlines has lost 15 pilots who decided to take the money and run while the Treasurer was trying to make up his mind about the sort of additional tax he proposed to introduce on superannuation. In a Press release dated 24 January I drew the attention of the people of Australia to the fact that more than 20 senior pilots had resigned from Australian passenger airline companies in the past month. Qantas Airways Ltd alone had lost 14 senior 747 captains. Airline sources say that Qantas could lose another 80 pilots by the end of March and that domestic airlines, including Australian Airlines, could lose similar numbers. Let me quote from the Australian dated 22 January. Mr Hand —The Murdoch Press. Mr BEALE —And from the Age dated 22 January. You can take your pick. I will give you both. Mr DEPUTY SPEAKER(Mr Blanchard) —Order! The honourable member for Deakin will address the Chair. Mr BEALE —The Australian said: Uncertainty over the Federal Government's review of superannuation arrangements has provoked an unprecedented mass resignation of senior airline industry pilots, technical and executive staff. Mr Hand —Why do you quote the Murdoch Press? Mr BEALE —Since the Minister for Aboriginal Affairs wants to hear it from the Age as well, I quote: Qantas pilots and their domestic airline colleagues are likely to strike if the Federal Government introduces changes which would adversely affect existing superannuation deals. Now that the Minister is departing the scene, having come in and made his usual magpie contribution to this serious debate-- Mr Hand —Never when you are speaking. I am intrigued by your remarks! Mr DEPUTY SPEAKER —The honourable member will ignore the interjections and the Minister for Aboriginal Affairs will cease interjecting. Mr Hand —I am not allowed in here much. Mr BEALE —I am not surprised. If the only contributions that the Minister makes in here are of that calibre, he should stay out permanently. Mr Unsworth is interested in the superannuation matter. It is widely reported in the newspapers this morning that the beleaguered Premier of New South Wales has put the Federal Government on the spot by declaring that this week he will press for a commitment that superannuation funds will not be taxed. In the second day of pointedly distancing himself from the Federal Government-he is not the only one who is pointedly distancing himself from the Federal Government; I see the new honourable member for Adelaide (Mr Pratt) is in the chamber and it is clear that the Adelaide electors are pointedly distancing themselves from the Federal Government-Mr Unsworth said: One of the things I want to put an end to is the suggestion that there might be a tax on superannuation funds. The Press article goes on to report the possibility of a clash with Mr Hawke on proposals to tax superannuation funds. This is what the National Farmers Federation had to say about this. Mr Hand —Tell us what the unions say. Mr BEALE —If the Minister will be patient and stay in the chamber I will get to what the trade union movement has to say in just a little time. There is a remarkable similarity in what everybody is saying about the Government's proposal to introduce a new superannuation tax-what the National Farmers Federation is saying, what the beleaguered Mr Unsworth is saying and what the trade union movement is saying. The National Farmers Federation will attempt to force the Australian Conciliation and Arbitration Commission to expand its ruling on productivity-based superannuation so that employees must match the employers's 3 per cent contribution. What is the Treasurer's response to all of this? What is the Treasurer's response to beleaguered Barrie? This morning the Treasurer said that the Federal Government would not take any notice of what appeared to be off-the-head comments. The Premier of New South Wales, who is about to face the people of New South Wales in a State election, says that he wants a commitment from the Treasurer that there will be no additional tax on superannuation and the Treasurer says, `Well, I don't respond to that sort of thing. I don't respond to those off-the-head comments'. This Government is to be condemned for failing to await the report of the advisory group on the financing alternatives for Australian Airlines. The advisory group's terms of reference include the phrase that it should report as to `restrictions on adoption of fully commercial superannuation arrangements'. I remind the House and the Australian people who is in the advisory group because that group was very carefully constituted in such a way that it would arrive at the conclusion that the Government wanted it to arrive at. When I say `the Government', I do not include the Minister for Aboriginal Affairs because his ideology is so out of touch with what senior members of the Government want to see happen, and will see happen, on privatisation that he is irrelevant to the debate. Let me remind the House who is involved in the advisory group on Australian Airlines. The chairman is Mr Harris, who, we all know, is taking on the job as the new Chairman of Australian Airlines. I wish him much success with his challenging task in the future, particularly in the difficult months ahead for Australian Airlines while this Government refuses to come to terms with the financing options that should be reviewed and where decisions should be made about the future of the airline. Mr Hand —Tell me what you would do. Mr BEALE —It is quite clear what we would do with Australian Airlines. Our policy is that we will transfer ownership of Australian Airlines from the public sector to its employees and the private sector. As with so many other Opposition policies, this one will be followed by this Government in due course. As I said, the advisory group includes Mr Harris. So when Mr Harris comes to the conclusion to which he wants to come, which clearly will give him the maximum amount of financing flexibility, the airline will necessarily be locked in by the decision. Mr Kelty is also on the advisory group. He is the Secretary of the Australian Council of Trade Unions. So when this committee comes to the inevitable conclusion that something must be done to assist the financing of Australian Airlines, the trade union movement will be locked in. The group also includes Dr Wilenski, who is the Secretary to the Department of Transport and Communications. When this committee comes to the inevitable conclusion in terms of additional financing for Australian Airlines, the Department will be locked in. Then there is Mr Redlich, no doubt a friend and colleague of the Minister for Aboriginal Affairs (Mr Hand), who, as we all know, is a former President of the Australian Labor Party in Victoria. When this committee comes to the inevitable conclusion on financing for Australian Airlines, the fact that Mr Redlich is on the committee will lock in the difficult Left in Victoria, like the two Ministers, the Minister for Aboriginal Affairs and the Minister for Housing and Aged Care, who occupy the Government front bench at present. The terms of reference of the advisory group on Australian Airlines advising the Government on financing alternatives for Australian Airlines contain the phrase: Restriction on adoption of fully commercial superannuation arrangements. This committee is due to report in a few weeks. Why did the Government not wait until the committee had reported before rushing this legislation through? After all, one has until 1 July or the legislation clearly can require Australian Airlines to call to account the funds involved. Why is the Government rushing through this legislation at present? Why will it not wait for this committee to report? The sum of $4.9m that the Government will collect by virtue of this legislation demonstrates yet again how difficult it is for public enterprises to compete with the private sector. The $4.9m in superannuation obligations by Australian Airlines is $4.9m more than its main competitor, Ansett Airlines of Australia, would bring to account in relation to the same number of employees. What has happened is that Australian Airlines and Ansett, its major internal competitor, have similar superannuation schemes. The $4.9m is the obligation that Australian Airlines is now forced to bring to account as a result of the transfer of this obligation from the Commonwealth superannuation scheme. This shows yet again how difficult it is for public authorities to compete with the private sector. This is the perfect illustration of how Australian Airlines will not be able to compete effectively with Ansett while still a public authority. Mr Hand —That is not right. Mr BEALE —Can the Minister not add up? Mr DEPUTY SPEAKER(Mr Blanchard) —Order! The Minister will cease interjecting and the honourable member for Deakin will address the Chair. Mr BEALE —Australian Airlines superannuation obligations are $4.9m more than those of its main competitor, Ansett. This is a perfect example of how ideology overtakes arithmetic. The Minister cannot add up. It is not only the Government's secrecy over superannuation that is indicative of this increasingly out of touch Government; one has only to look at the way Australia's infrastructure is being disregarded to see that people are getting a raw deal from Labor governments right across Australia: roads are falling apart; the New South Wales and Victorian rail systems are a joke; there is to be yet another inquiry into why it costs so much to move freight a hundred yards across a wharf; and our airports are the shame of our growing tourist industry. Sydney (Kingsford-Smith) Airport is a blight on Australia, and a blight on the Unsworth Government for its impotence in getting the Hawke Government to do anything about it. When 4,500 people in 11 jumbo jets are dumped on the tarmac at Kingsford-Smith Airport, Australia's premier airport, because of a burst water pipe, surely the people of New South Wales have to ask, `How much value is Barrie Unsworth?'. What New South Wales needs is a `change for the better'. Kingsford-Smith has needed a new international terminal for years. But this Government is spending a pathetic $23m, which will not achieve anything other than the waste of more taxpayers' money-a fact that was noted by the majority of the Public Works Committee, which reviewed that investment. A new international terminal is a must for Kingsford-Smith Airport, but this Government's continued refusal to do anything about it only highlights its incompetence and its failure to understand what the travelling public and the tourist industry need. The Bill before the House will further handicap Australian Airlines. Like the patch-up job on Sydney's international terminal, Labor's attitude to fixing Australian Airline's problems is equally piecemeal, halfhearted and inappropriate. I commend the Opposition amendment to the House. Mr DEPUTY SPEAKER —Is the amendment seconded? Mr Cowan —I second the amendment and reserve my right to speak. Mr PRICE(Chifley)(12.01) —I am pleased to speak in support of the Australian National Airlines Amendment Bill. I was most disappointed to hear the introductory words of the speech by the honourable member for Deakin (Mr Beale) when he referred to the Minister for Transport and Communications Support (Mr Peter Morris), who is not present for this debate. The honourable member's remarks were cynical, hypocritical and in poor taste. I am sure that they do not reflect the views of other Opposition members. I, too, suffered the problem of having to undergo an operation and being away from this House. I regarded it as most ungracious and ill-mannered of the honourable member for Deakin to make the remarks he did, when he knew full well, as he acknowledged later in his speech, the circumstances that prevented the Minister from being in this House to deal with the Bill. Mr Lee —He has acute appendicitis. Mr PRICE —The Minister has acute appendicitis, as my colleague reminds me. The remarks of the honourable member for Deakin were in extremely poor taste. Mr Beale —I wished him a speedy recovery from his illness. Mr PRICE —After the honourable member reflected on the Minister's absence, without giving the reason until much later in his remarks. Along with many of the comments made by the honourable member for Deakin in his peregrinations, probably the most amazing one was to suggest that the roads in Victoria and New South Wales were falling apart, when the honourable member as a backbencher advocated the cessation of all Commonwealth funding for roads. I return to the purposes of the Bill. The Australian National Airlines Amendment Bill 1987 deals with superannuation. Australian Airlines is the only approved authority under the Commonwealth superannuation scheme which is exempt from full cost recovery of employer contributions. This situation has been seen by other approved authorities as resulting in inequitable treatment. I have heard Opposition members time and time again in this House arguing that unfair advantages should not be conferred on Commonwealth trading enterprises. Presumably, there is an inconsistency in those arguments when they are applied to the reasons why the Government seeks to bring in this Bill at this stage. The Australian National Airlines Commission will be required to meet the full accruing costs in relation to those of its employees who are members of the Commonwealth superannuation scheme. The change has an effective date of 1 July 1987. From that date the Commission will therefore be treated in the same manner as all other authorities in respect of the employer costs of providing superannuation benefits to employees who are members of the Commonwealth superannuation fund. The honourable member for Deakin rhetorically asked a number of times why the Government was bringing in this Bill at this time. Once again, I point out that its retrospective date of operation is 1 July 1987. One has heard Opposition members on a number of occasions complaining that the Government was not bringing in this sort of legislation quickly enough, but in this debate the shadow Minister says that this legislation should be deferred even longer-maybe to 1 July 1988 or 1 July 1989. May I now comment on a couple of points in the amendments moved by the shadow Minister, which, of course, I am opposing. I though it was unfortunate that the shadow Minister should attack the integrity of those serving on an advisory committee. Any government, of whatever political flavour, from time to time needs advisory committees. It needs people from all walks of life to give up their time to serve on those committees and to give the Government the benefit of their advice. It is unfortunate that the shadow Minister, just as he denigrated and attacked the Minister for Transport and Communications Support, should extend his vilification to questioning the integrity of those who served on the advisory committee. The shadow Minister questioned why the Government should not wait for the committee report, and said that in fact the Government may change its mind. When the shadow Minister argues for full privatisation-and we ought to understand the two sides of the argument-he talks about selling off lock, stock and barrel every asset of an organisation and handing it over to private enterprise. It is a philosophical approach. No amount of reports or advice to the contrary would alter the judgment of the honourable member for Deakin on these matters. For example, he would argue that Telecom Australia, in which I take a more than passing interest, and other statutory trading authorities should not be just partially privatised but should be taken over by private enterprise lock, stock and barrel. Mr Beale —I do not. Mr DEPUTY SPEAKER(Mr Rocher) —Order! The honourable member for Deakin shall not interject from outside the chamber. Mr PRICE —We have to understand the history of Australian National Airways (ANA) and its inception to understand where we are. For example, how many honourable members realise that right from its inception in 1945, when legislation was first passed, Trans Australia Airlines (TAA), the then operating name of the company, achieved a pre-eminent position in the market and that the reason for its coming into being was that the number of private companies operating had reduced dramatically from 13 to nine between 1939 and I think 1944. There was a real fear at that time that the airline industry would become a private monopoly and that was not seen to be in the best national interests of Australia. Indeed, when the Government set up the legislation in 1945 it created a government monopoly. This was later challenged in the High Court of Australia and competition was allowed on the interstate trunk routes. I return to the theme that there was not this dynamo of private enterprise operating in those early days, serving the people, grabbing the lion's share of the market and performing effectively and efficiently. The conservatives, starting with Menzies, had to legislate, to regulate and to take away advantages that TAA had, to prop up Australian National Airways, which subsequently became Ansett Airlines of Australia and was then taken over. No one doubts today the pre-eminent position of Ansett Airlines, and I commend Ansett for that, but it has arrived at that position only after 30 years of regulation, protection and the removal of competitive forces, the sheathing of Australian National Airways. If we go back to the Civil Aviation Agreement Act 1952 and the letter that Sir Robert Menzies wrote, it gives us the flavour of what was happening to TAA at that time. Talking about the arrangements, the letter states: 1. ANA to be given a proper and substantial share of air mail. Why should the Government not send airmail on a government line? To put it into today's context, are there regulations that insist that Ansett feeder services feed a substantial portion of that traffic into Australian Airlines? Of course not. Is there legislation that demands that in terms of the tourist resorts owned by Ansett Transport Industries a proportion of that traffic be compulsorily forced into Australian Airlines? No. These provisions do not exist to assist the government carrier today, but back in 1952 they existed for the purpose of propping up a failing private airline organisation. The letter further states: 2. Government business, i.e., business transacted on Government voucher, to be freely available to both airlines, the holder of the Government voucher having a free option. Maybe that is okay. Certainly, having been put in place, it has continued unchanged for many years. However, let me say that it was brought in not to help TAA but to prop up Australian National Airways, the private enterprise airline operating at that time. The letter further states: 4. The Government to assist financially each of the major operators to acquire new heavy flying equipment (types equivalent to DC4s and better) either by the Government acquiring them and chartering them to the operators or by some other appropriate financial process. Who has heard of an industry sector such as the airline industry where a government must purchase airlines on behalf of private operators, or indeed guarantee the loans of private operators? Let us look at competition with other airlines. Did the conservatives force the idea that competitors should be given this sort of financial assistance? No. I am referring to the historical context and to the way in which the conservative parties have managed the two-airline policy. I supposed if we waved this letter at someone such as Sir Joh Bjelke-Petersen, he would say that this is socialism. Perhaps it is, but I say it is the conservative side of this chamber that introduced it back in 1952. I think the fifth point in the letter is the gem. It states: Routes, timetables, freight rates and other related matters are to be rationalised. Once again that meant that shackles were to be put on TAA to prop up ANA, the private operator. Honourable members on this side of the House are lectured about the hard point that the private enterprise option is the only pure and effective option. That is not the 30-year history of civil aviation. It is really a history of restrictions, regulations and ordinances being placed on TAA, to such an extent that we have now arrived at the position-I congratulate Ansett management on getting to this stage-where Ansett Airlines is the dominant player. I could outline to the House quite a number of changes. I talked about the 1945 legislation, the 1951 review, the 1952 Civil Aviation Agreement Act, and the further review in 1957. One of the reviews that took place was to ensure that ANA equipment was allowed to be upgraded because it was running at a loss. I can give the House the figures if necessary. It was running at a significant loss because ANA had made a wrong equipment choice. So what did the conservative government that believed in private enterprise and free market forces do regarding the decisions and responsibility of management. It said, `Airlines have to buy the same aircraft. We cannot trust ANA to make the right decision'. The technical superiority of the choices made by TAA at that time meant that ANA had got it wrong and was behind the eight ball. But, more than that, the then Government even introduced legislation that made TAA charter aircraft back to ANA. That is a sorry history of the most outrageous regulation that has been put in not by a Labor government but by conservative-the high priests of free enterprise-who are for management responsibility and the removal of shackles. If only Australian Airlines' history had been that. In addition, the airlines got together and made a very cosy arrangement. They did not want to have any more players in the market and so there was the IPEC legal challenge in 1965 and, more recently, in 1983, the East-West Airlines Ltd legal challenge. The airlines want a duopoly. They want to guarantee monopoly profits and have government finance, but they cannot let in any more players. I am surprised that Opposition members stood up and attacked this Government in the way they did. I say in conclusion that, in supporting the Bill and opposing the amendment, we on the Labor side are very concerned about the long term viability of our government trading enterprises. Unlike the Opposition when in government, we are undertaking major reviews. We are not approaching the matter from a rigid philosophical point of view. We are looking at each enterprise on a case by case basis, making decisions in the best interests of all Australians, and in particular bearing in mind the long term viability of the enterprise, and the interests of its employees and customers. I support the Bill. Mr COWAN(Lyne)(12.17) —The Australian National Airlines Amendment Bill 1987 before the House today was embodied in the Budget brought down by the Treasurer (Mr Keating) last year. So we have been expecting the legislation and are aware of the fact that Australian Airlines will have to contribute $4.9m a year to the Commonwealth Superannuation Fund. And so it is that we look upon the legislation, as the honourable member for Deakin (Mr Beale) said, as a Budget measure. Whilst we may be critical of some of its aspects, there is an amendment before the House, which I support. By the tone of the debate today, it is evident that there is grave concern by a number of speakers, particularly the honourable member for Deakin, who spoke very well on these broad issues, over the whole field of air transport and passenger services throughout Australia. It raises the matter of deregulation, which is important to us all, and the matter of privatisation. The issue before the House today concerns superannuation. That in itself is a very big issue not only as far as the legislation is concerned but also as far as people who are interested in superannuation are concerned. The honourable member for Deakin spoke about the present attitude of the Premier of New South Wales. Basically, he said to the Prime Minister (Mr Hawke), as he did over the local telephone calls issue, `Do not do anything about superannuation'. He knows that the Commonwealth Government has this measure in mind. I well recall standing up in this House some two or three years ago on that issue. At that time Opposition members expressed very grave concern as to the effect of new taxation measures on superannuation, particularly lump sum payments and other forms of payment. At that time I put the case of the armed forces in Australia-those who serve in the Royal Australian Air Force, the Royal Australian Navy and the Army who, on reaching 40, 45 or 50 years of age, depend on lump sum superannuation to enable them to carry on from there and to buy a home, a piece of dirt, a business or something to occupy them for the rest of their time. They are still relatively young men and women. I have picked out those people, but they represent only one sector. Many people outside public services in this nation are in superannuation schemes. Many industries and companies have their own schemes and they are operating very satisfactorily. It is important that when a person opts out of work and draws his superannuation, he is able to do what he has planned to do. The reason people join schemes and contribute towards them is that they have something in mind at the end of the road. Those people have been taken down because the Government introduced a tax over and above the 5 per cent which existed previously. It went up to a 30 per cent, or 31 per cent when the Medicare fee was taken into account, tax on superannuation. That is a very big tax. If that is to be fiddled with so that the Government can reduce corporate or personal taxation, it is time that the Australian people knew that that is so. They should know that so they can plan accordingly. If the Government intends to follow what New Zealand has done in terms of its tax laws, we can expect anything to crop up in the May mini-Budget. We can see that there is a difference between what the Prime Minister says at the moment and what the Treasurer says, although I must admit that our Treasurer has been exceptionally quiet. Until we saw him in the House in Question Time yesterday some of us doubted whether there was even a Treasurer in Australia because he has not contradicted one thing that the Minister for Industry, Technology and Commerce (Senator Button) or the Prime Minister has said. Mr Deputy Speaker, you cannot tell me-and nor can the Minister for the Arts and Territories (Mr Punch), who is at the table-that you agreed with everything that was said regarding taxation in Australia in future. I raise those issues because they are on everybody's mind-not only those of Opposition members but also those of the public. The basic Australian understands what superannuation is. I am sure that it has exercised the minds of honourable members on both sides of the House for years as to whether or not we should have a national superannuation scheme and, if so, how it should act-whether it would be the responsibility of government or the companies that presently exist to carry out such schemes. If we are to save social security funds, which are growing year by year as Australians grow older and there become more of us, the only way to do so and to overcome this burden on the taxpayer and provide a proper income is through a superannuation scheme. I raise this matter today because we are having a broad debate. Many issues of which we are very conscious have been raised. The legislation places Australian Airlines at a distinct disadvantage. Nobody can tell me that a public utility has any hope of competing with a private enterprise. The Minister for Transport and Communications (Senator Gareth Evans), in another place, has made it quite clear, as have the Prime Minister and the Treasurer, that there is a necessity to privatise some of our instrumentalities. The honourable member for Deakin made quite clear this morning what the Opposition's policy with respect to the future of Australian Airlines is. Later this week we will be dealing with legislation that allows the Government to sell a 50 per cent interest in that airline to the public, simply because it is too great a drain on the finances of a government to be able to supply the funds that Qantas Airways Ltd, Australian National Railways and Australian Airlines will require over the years to come. This country is just finding out that we are in our infancy in terms of development and tourism. In the next five years, many more millions of people will visit Australia and demands will be made on communications and transport to cater properly for those people. Transport today, particularly air transport, is very important to us. The honourable member for Page (Mr Ian Robinson) is sitting beside me. We are very concerned about what will happen to East-West Airlines and the residue of certain air services along the coast of New South Wales which must be relinquished so far as the Trade Practices Commission is concerned. We are concerned about only one thing: that our communities are given a proper service into the metropolitan area and elsewhere to meet local demands. This has gone on for some months now and our people are asking us what is occurring. We are trying to overcome the problem. All of this is interlocked with this legislation and with legislation that will come before the House in a few days time. It is interlocked because we expected, and I know the Trade Practices Commission expected, that Australian Airlines might be interested in the five services that East-West Airlines has to give up. The legislation is important. This is another cost to Australian Airlines and that is why it cannot spread its wings to give the services that Australians would expect it to give in those important areas. I was pleased to hear the honourable member for Deakin say something today about Sydney's airport. Most honourable members fly into that airport on an average of at least once a week. The fact is that for quite a few years-since 1983-the Government has argued that the airport was going to serve adequately the demands on it as the main input airport within Australia until the new airport was actually constructed. I am sure the Minister for Arts and the Territories (Mr Punch), who is at the table, would like to know, because he is getting pressure from his electors concerning aspects of the airport and the development over the years to come. Let us be realistic about this; it will be 10 or 15 years before a new airport is constructed, if ever. Sydney Airport is now unable to meet the demands of this growing country of ours for intrastate, interstate, and overseas travel. Most honourable members from country areas who represent electorates in New South Wales and elsewhere are concerned about this because aeroplanes often have to wait a quarter of an hour, 20 minutes or more in the air before they are able to land. The operators are not anxious to give additional services simply because they know that, when they have in the air an aircraft that cannot be allowed to land because of the traffic at the airport, it is an additional cost to them. The facilities are not there. We must take every opportunity to announce and state this, because there is pressure upon the Government. I know that it has plans to do something at the airport at the moment because the Premier suddenly woke up to the fact that perhaps the money should not be going into Darling Harbour but should be going into Sydney (Kingsford-Smith) Airport, where it would be better spent looking after the future of Sydney as a city, New South Wales and Australia. Maybe the Premier of New South Wales thinks as I do, as a New South Wales person; we would like to see Sydney's airport remain the airport in Australia. That is where people want to come, and so the Government has to look at this. I just wanted to make those few remarks about the legislation before the House. In a way, I am sorry to see that Australian Airlines has to put out this extra capital year after year to look after the employees concerned when it is at a disadvantage compared with its major competitor in that same field. We are all anxious to see in this country competition between those particular people and anyone else who wants to enter the field of aviation. They should have a reasonable chance of success so that the consuming public will get the benefits of it. Mr SAUNDERSON(Aston)(12.30) —It is amazing to hear supporters of private industry, who say that private enterprise is more efficient, talking about this Australian National Airlines Amendment Bill and their concern that a public enterprise will be unable to compete because it is being asked to pay its liabilities as they exist, just as they would expect any private enterprise to pay. They would not expect any private enterprise to avoid paying its liabilities, but now they complain that the Government says, `Let us put public enterprise on an efficient basis, on the same basis as private enterprise'. What happens? The Opposition complains that it will be made inefficient. I must take up some of the points made. The honourable member for Lyne (Mr Cowan) said in his speech that, in his view, a public enterprise cannot compete against private enterprise. He used Australian Airlines and Ansett Airlines of Australia as an example of that. If the honourable member had listened to the speech of the honourable member for Chifley (Mr Price), which was a very good speech, he would have realised that historically that is simply not the case. Historically Australian Airlines was the largest airline; it was so strong that Ansett Airlines was not able to compete. It was only the intervention of conservative governments which changed the rules that hindered Australian Airlines to such an extent that Ansett Airlines was allowed to grow at the expense of the government airline, to the extent that now Ansett Airlines is clearly the much stronger airline. It is nonsense to say that that is the result of free, unhindered private enterprise competing and, therefore, doing over a public enterprise. The Opposition knows this because its governments, in the 23 years in office, ensured that the rules were such that the public enterprise airline, which was the strongest by far of the two airlines, was hindered to the extent that now Australian Airlines is clearly the second runner. This had nothing to do with private enterprise; it resulted clearly from the restrictions applied by government to ensure that it did not get off the ground. There are two areas: apart from contriving the competitive market, which government did with its regulations to draw back Australian Airlines, the other method by which the conservatives ensured that Australian Airlines could not compete was to starve it of capital funds. When we came to power in 1983, Australian Airlines had only $15m in capital given to it by conservative governments, compared to the hundreds of millions of dollars that it was actually worth. At the death knell of the Fraser Government, it made a decision to give $25m, but when we come to power we increased that by another $90m. In 1983, Australian Airlines received $115m, which took its capital to only $130m. No private enterprise company would have been able to exist with that lack of capital funds. The conservatives ensured that it did not have those funds during the period when Ansett was beginning its growth pattern. What surprises me about this is that clearly Opposition members have not even read the Bill and its surrounding information. Australian Airlines is now being required to pay its estimated superannuation liabilities. They must be paid in full, and that now means an increase of $4.9m. If members of the Opposition had bothered to read the second reading speech they would realise that it is not affecting the capital of Australian Airlines. It is not paying an additional $4.9m because a subsequent adjustment has been made to the dividend that would have been paid. While the $4.9m is an increase in the superannuation payment, a reduction has been made in the dividend that would have been paid. It has not been an additional burden on the airline because it would not have had the $4.9m to work with anyway. It is true that a debate is now going on about the ownership of Australian Airlines. The Government has put through legislation to have Australian Airlines incorporated. Mr Cowan —Are you happy with that? Mr SAUNDERSON —I am certainly happy with that because I believe that government organisations that are competing in an open market situation ought to be established on the same basis as their competitors and ought to be as free as possible to compete in an open way. Quite clearly one cannot expect Australian Airlines to compete openly if it is hindered by masses of government red tape. Setting it up as a corporation provides it with some freedoms, and obviously the next step is the consideration of how it gets its capital over the next three years to ensure that it can compete. We must ensure that we do not end up with less service in a deregulated area than what we have currently. We want to ensure that competition remains as it is so that we have options in our airline industry. The May report, the report of the Independent Review of Economic Regulation of Domestic Aviation, which is the basis of deregulation that the Government has introduced, makes it clear that, with its growth, Ansett Airlines of Australia has enormous growth and capital behind it and that Australian Airlines is not in the same position. That is a clear logical fact. One need only examine the structure of the two companies. One is obviously well structured and has an enormous mass behind it; beyond that, it has the owners of Thomas Nationwide Transport Ltd and the Murdoch industries behind it, which also give it further support. The May report states that, given Ansett's enormous competitive edge over any competitor, whether it be a newcomer in the marketplace or somebody who purchased Australian Airlines, it is quite clear that only a government airline would be able to survive in a deregulated industry. The report states: It would be more reasonable to assume that in a completely deregulated environment Ansett Airlines' position would become such that only a government owned competitor could be assured of survival. Clearly, when May was considering deregulation he saw the benefits that could be accrued by not having this artificial structure of pricing, route trafficking and so on. However, he could also see quite clearly that, in a deregulated market, without some guarantees behind the second competitor, it would probably be at great risk of going under, given Ansett's enormous capacity to take over the market. The May report says to deregulate because that is a good option, but when one deregulates one must make sure that one guarantees that second competitor, and the only way to do that is to keep it as a public enterprise. Mr Beale —That is not what the Evans report says. Mr SAUNDERSON —There are options in the Evans report; it is a discussion paper only. The May report is the most comprehensive review of airline industry that has taken place in recent times, and it makes it very clear. If the honourable member for Deakin (Mr Beale) bothered to read the May report he would understand what it is all about. It is quite clear that Australian Airlines has a problem in terms of its capital. No-one is running away from that problem. It is equally clear that there are various ways in which that capital can be funded. One of the discussion papers attracted some publicity yesterday. It suggests a number of options. However, it is simply a discussion paper; no decision has been made as to what will be the final outcome in terms of the capital injections, nor what the final structure of Australian Airlines will be. It is an absolute nonsense for members of the Opposition to come into this chamber and say that private enterprise is inherently more efficient and more capable, because it is private enterprise, than is public enterprise. Mr Beale —In this case it is $4.9m. Mr SAUNDERSON —The reality is the opposite, and there is probably no more stark an example than that of the airline industry. Only because of a rigged market, a structured competitive situation, did Ansett Airlines become stronger than Australian Airlines. The starving of capital funds by governments over the years was a blight on their management of the organisations. It was to their discredit that the conservatives deliberately starved them. Not only did former governments not put in the capital required but they also took whatever profit they could to ensure that the companies did not retain profits to be able to continue growing. I believe this move ought to have been accepted by the conservatives as a logical move. Conservative members stand up in this chamber and bleat about the fact that public enterprises do not pay this or that and that they compete unfairly because they do not meet all the true costs; but when the Government comes in with a Bill that will make sure that Australian Airlines is not given favourable treatment, that it will have to meet its real costs and that, having met its real costs it will also have to compete in a deregulated market-a Bill which says to Australian Airlines, `Meet your real costs, $4.9m, and meet all the superannuation liability and not just some of it-the Opposition says, `Horror! Fancy making it meet its real costs'. It is absolute nonsense for the Opposition to stand up and argue that, and if the honourable member for Deakin read the May report he would know, as I pointed out earlier, that the $4.9m is not an additional loss that the company did not expect. It has not suddenly become an additional burden on it; it has been taken into account in its dividend payments. The only sensible argument which could have been raised, and which has been raised, is that perhaps the additional money should have been kept as retained earnings to help lift its capital. Quite clearly there are a number of factors to be brought into consideration. It will not be a case of simply saying, `Let us solve this problem by selling 49 per cent; let us get the money that way', because somebody might have to borrow to get that. There is also some consideration that borrowing by private companies is somehow better than borrowing by public companies. Once again, that is a lot of economic nonsense. Borrowings are borrowings, and if there is a capital requirement, there is no difference between private enterprise and Australian Airlines or the Government raising those funds. There is nothing sacred about private enterprise that will make Australian Airlines any more efficient than it currently is simply by making it private enterprise. There is nothing logical about that at all. I point out that if people read the whole May report, and not just selectively pick out the points that they want, they will clearly see that May has great concern about the need to maintain competition in the airline industry. He very carefully goes through the structures of the companies, how they operate and how they have been able to get to their relative positions. In his considered judgment, with the five options that he put, clearly he saw great advantages in having a deregulated economic marketplace in the airline industry. I do not think anyone disagrees with that. However, May saw a grave danger, to the point that he made it very clear in his report that in order to guarantee that competition, given Ansett's incredible position, one would have to retain Australian Airlines as a publicly owned airline. I do not think anybody is walking away from the point May makes. It is obviously a matter that needs to be considered and, in considering it, one has to look at all the options. When one considers all the options, one looks at whether one sells off a half interest, 49 per cent or whatever, and considers other means of raising the capital; one looks at borrowings and a whole mixture of all those things. However, it is simply an option. It is a matter that will be considered by this Government. Once again, we will make decisions that will ensure that these organisations continue to provide services to the community as they have done in the past. We will not make decisions like those the Opposition made; we will not simply help our mates to get a competitive edge in the marketplace, which is all that the coalition Government did within the airline industry over many years. In this instance we will make the right decisions, decisions which will benefit the whole of the community. I support the Bill. Mr DEPUTY SPEAKER(Mr Rocher) —Order! It being 12.45 p.m., the debate is interrupted in accordance with sessional order 101a. The debate may be resumed at a later hour. Sitting suspended from 12.45 p.m. to 2 p.m. Mr HOWARD —I ask the Prime Minister: Is the Government considering or proposing any changes affecting the taxation of superannuation, either lump sum, investment income or otherwise? If so, what are those changes? Mr HAWKE —The Treasurer and I have repeatedly stated that in comprehensively reviewing business taxation the question of the treatment of superannuation simply must arise. I can say to the Leader of the Opposition that the Government has no firm proposals before it on superannuation. He is close to a giggle, so I will not encourage him. What is occurring, as we said at Budget time, is a review of the superannuation concessions. Quite obviously, this review is still in progress. I am obviously not prepared to rule in or to rule out of our review any aspect of the business tax system. I would not think that the Leader of the Opposition would regard it as appropriate, in having a general review of the business tax system as we are, to say, `That is in; that is out. The whole system is being reviewed'. If we were to do that we would diminish the broad scope of the review of the whole business tax area, which in turn would obviously be inimical to achieving the best possible outcome for the community in general and for the ordinary working men and women of this country in particular. In conclusion, to repeat what we have said before, I can say quite definitely to the honourable gentleman that, whatever decisions the Government takes regarding taxation, superannuation will continue to be treated on a concessional basis. Madam SPEAKER —I inform the House that we have present in the gallery this afternoon a parliamentary delegation from the Federal Assembly of the Socialist Federal Republic of Yugoslavia, led by Dr Marjan Rozic. On behalf of the House, I extend a very warm welcome to the members of the delegation. Honourable members-Hear, hear! Mr FREE —My question is directed to the Minister for Employment, Education and Training. I refer him to the record employment growth which has occurred in recent months and to the fact that over one million new jobs have been created since the Hawke Government came to office. Can the Minister advise whether job growth remains strong in my own State of New South Wales? Mr DAWKINS —The Prime Minister referred yesterday to this great achievement of the Government, but it is such an important and good story that I cannot resist repeating some of the important information today. There has been a very impressive growth in the labour market since the Government came to office. This demonstrates very clearly the underlying strength of the economic policy the Government has been pursuing and, indeed, intends to pursue consistently in coming months and years. The fact that we have achieved the very great target of around one million new jobs since 1983 has been the result of the very strong growth in recent months. Although we were under no apprehension that we would not achieve early this year the figure of one million, I think the fact that it was achieved as quickly as it was is very much due to the strong growth that occurred during November, December and January. If we look at the details, State by State, of where that growth occurred, we see that the most impressive growth in job creation was in New South Wales, where some 93,000 jobs were created in that three-month period. That represents in excess of 53 per cent of the national total. We are obviously entitled to conclude from that that the economy of New South Wales is in robust health and that New South Wales is obviously being well-governed. What is important under these circumstances is consistency in policy and consistency in approach in order to ensure that this strong growth in the labour market is maintained. Mr SINCLAIR —I ask the Prime Minister: Will he confirm the statement by his colleague the Leader of the Government in the Senate that the question of time charged local telephone calls is still in the melting pot? Mr HAWKE —In regard to a matter which obviously gives considerable delight to those opposite-the Adelaide by-election-we took the message from Adelaide. I have made it quite clear that the question of time charging is off the agenda. It is finished, it is dead, and that is a position which is accepted by the Leader of the Government in the Senate, Senator Button, as he accepts most of my positions. Madam SPEAKER —I inform the House that we have present in the gallery this afternoon a former member and former Speaker of this House, Sir William Aston. On behalf of the members of the House, I bid him a very warm welcome. Honourable members-Hear, hear! Mr BEDDALL —Can the Prime Minister inform the House of the Government's response to the recent statement by the leader of the Soviet Union, Mr Gorbachev, on the withdrawal of forces from Afghanistan? Mr HAWKE —The Government welcomes Mr Gorbachev's statement. As is well known, the Soviet occupation of Afghanistan has been a great source of concern to the Government since we came to office in 1983. I think is a concern which is shared across this place. Our concern has been consistently raised with Soviet representatives at all appropriate opportunities. Afghanistan was, indeed, a major issue of discussion with Soviet leaders during the visit Mr Hayden and I made to the Union of Soviet Socialist Republics last December. I then strongly expressed the view that Soviet forces should be withdrawn at the earliest opportunity so that there could be the emergence of an independent, sovereign and non-aligned government in that country. I emphasised that a constructive role in the Asia-Pacific region by the Soviet Union must comprise more than concepts and intentions. I said then, and I repeat, that we are looking for deeds, not words, as an indication of the seriousness of the Soviets in this matter. I took some encouragement from the Soviet response on this issue. Mr Gorbachev's statement of 8 February is without any question a step in the right direction. As my colleague the Acting Minister for Foreign Affairs and Trade has said, for the first time an actual date-that is, 15 May 1988-has been announced for the commencement of Soviet troop withdrawals with completion within 10 months. The Government notes that Mr Gorbachev has made it clear that withdrawal is conditional upon agreement being reached at the next round of the Geneva negotiations. We certainly hope-again I expect that this hope is shared by members right across this House-that the announcement will contribute to the success of those negotiations in Geneva. On 7 December in this House the Leader of the Opposition, referring to my discussions in Moscow on Afghanistan and other issues, said: You have been played like a trout-a great successful exercise with Gorbachev. I just note in conclusion that the honourable member for Bennelong borrowed that expression from Bill McMahon, the Liberal Party leader, who, by comparison, looms as a giant. Mr PEACOCK —I refer the Minister for Industrial Relations to the latest plans of the Australian Council of Trade Unions (ACTU) for wage increases to be based on anticipated increases in the consumer price index. I refer also to the fact that Australia's unit labour costs are growing at more than double the average rate of our major Organisation for Economic Co-operation and Development trading partners, thereby obviously eroding our competitiveness. In view of the relatively poor productivity performance in Australia, I ask the Minister whether the ACTU's plan would bring about a reduction in the rate of growth of unit labour costs to that of our trading partners. Mr WILLIS —It is ironic that a question of this nature comes from a person who was a Minister in the previous Government which, in its last year in office, had a rate of increase of wages 10 per cent higher than that of our trading partners. Under this Government there has been no such disparity. The fact is that the wages system that is being pursued by the present Government is one which, by any standards, has been a fair but tough policy and one which has resulted in a reduction in real wages which has been sought, by the way in which that has happened, to protect the lower paid workers as much as possible. Nevertheless, across the spectrum of wage and salary earners it has resulted in a substantial reduction in real wages. In the process of that happening, in the last year or two there has been a higher rate of wage increase than in that of our trading partners. With the severe devaluation of the Australian dollar our price levels were inevitably pushed up. In those circumstances, if we were to have a rate of wage increase at the level of our trading partners, we either had to have a much greater reduction in real wages, which is presumably what the Opposition wants to see happen, or we had to have a system which was a bit balanced and which met the need for reductions in real wages while seeking, so far as was possible and was economically responsible, to protect the living standards of wage and salary earners. That has been the policy that we have pursued. That policy encompasses the approach that we will seek to bring the rate of increase of Australian wages closer to that of our trading partners. As the inflation rate comes down, as is now occurring, that becomes more possible. Also, in terms of ensuring that our competitiveness is maintained, we are taking various steps to ensure that productivity is increased. For the first time in our history as a nation the wages system has been put on a basis where, as part and parcel of receiving a wage increase, there is a requirement for increased productivity or improved efficiency. The whole second tier element is based on that. Of course, there have been considerable delays in many people getting a second tier increase because of the need to negotiate and to work out ways in which productivity and efficiency could be improved. As that system moves into place we can expect that productivity will increase as a result of that action. We would expect-indeed it will remain our policy-the wages system to continue to evolve. Doubtless it will change somewhat from what it is at present, but in our view an element of increasing productivity and efficiency will be retained as a key part of that wages policy. The ACTU has made its position broadly known. The Government will be having discussions with the ACTU, with the Confederation of Australian Industry and with the Business Council of Australia in the near future as we move towards the May review and we will make our position absolutely clear on the wages system in the future. But let me give this absolute assurance to the House: It remains our policy to try to bring the rate of growth in wages and the unit labour costs in Australia as close to our trading partners' as we possibly can. That involves not only consideration of wage increases but also consideration of productivity improvement. On both counts the Government is taking the right approach. Ms McHUGH —My question is directed to the Minister for Social Security. In the light of the rally held today outside Parliament by the Australian Pensioners Federation can the Minister inform the House of how Labor's achievements in government have provided help for the aged? Mr HOWE —I thank the honourable member for her question. I think the present Government can be proud of its record in terms of maintaining the real income of pensioners during a time of economic restraint and during a time in which the country has faced quite severe economic difficulties. The annual cost of maintaining the indexation of pensions is around $1 billion a year and I think one has to recognise the magnitude of the achievement which has seen an increase of around $40 to the pension since 1983. Of course, 65 per cent of the social security budget is paid to pensioners who are aged, are invalids or are widows. We have to contrast the relative security under which pensioners live because of the policy of the present Government with the massive insecurity that they would face under alternative economic policies. Only a few months ago the Leader of the Opposition was talking about the need for $11 billion worth of cuts. When he talks about that level of cuts he is careful not to alienate anyone. Indeed, the hallmark of this irresponsible Opposition is that it is prepared to criticise, to groan and to weep about what the Government may be doing. It is not prepared to be specific in terms of its own policies but it throws out that kind of figure which must represent a threat to the potential living standards of every Australian pensioner. It is true that the strongest plank in this Government's platform has been the maintenance of the income of the elderly and retired people on low and fixed incomes. In 1983 the Prime Minister promised that we would achieve 25 per cent of average weekly earnings-that is, we would maintain and improve the relationship between the living standards of pensioners vis-a-vis the wage earning population. We have virtually achieved that standard. There has been an 8.2 per cent real increase in the rate of pensions in the period we have been in government. That compares with a situation when we came into office where the pension was as low as 22.7 per cent of average weekly earnings or pensions had dropped in real terms by 2.4 per cent. To be in government is always to be placed in a situation where there are difficult decisions to make. It is a mark of the responsibility of the present Government that, despite all the difficult decisions that have been made, we have maintained and improved the real living standards of age pensioners in Australia. It is a mark of the irresponsibility of the Opposition that, when it was in government, it reduced the living standards of those people and, in opposition, it promised airily to cut $11 billion while at the same time it said to people such as the pensioners outside, `You do not need to worry about us. We will find $11 billion from somewhere else'. No one really believes that. People know that this Government has been marked by fairness and equity and they know that ultimately, whenever the Opposition is confronted with a tough decision, it will run away from that decision, particularly when its friends want their business lunches and when its friends who have assets of more than $1m want pensions. Those people will be protected by the Opposition and the living standards of the age pensioners will be chopped into. Mr REITH —I refer the Attorney-General to the fact that on 24 June last year, the very same day that the Secretary of the New South Wales division of the Australian Labor Party, Mr Loosley, wrote to Harris-Daishowa (Australia) Pty Ltd advising that its $10,000 donation would be used to assist the New South Wales branch of the ALP in its administration, $6,000 from the New South Wales ALP was deposited in the election campaign account for Eden-Monaro. Will the police investigation into the Harris-Daishowa affair include this? When will the police report be available? Does the Minister intend to table it and will the Minister give an assurance that any report from the Director of Public Prosecutions will also be tabled? Finally, has the Australian Federal Police been instructed to investigate not only possible breaches of Commonwealth laws but also possible breaches of State laws and to convey such material to State police? Mr LIONEL BOWEN —The honourable member should know that the Minister responsible for these matters is Senator Robert Ray. I will arrange for the matters that he has raised to be directed to him. I am aware of the fact that Senator Ray has indicated to the Senate that the police are investigating the matter and that that report would be given to the Electoral Commission. Mr LAMB —Is the Minister for Employment, Education and Training aware of complaints made by Hong Kong students who have paid full fees to attend the MDA Grammar School in Victoria? If so, can the Minister inform the House of the nature of those complaints, what implications this incident may have for Australia's full fee program for overseas students and what action the Government has taken in relation to this matter? Mr DAWKINS —I am aware of complaints that have been made, particularly through our consulate in Hong Kong, in respect of students attending the MDA Grammar School in Victoria. About 60 of the 100 students from Hong Kong at the school have formally registered complaints with us. The complaints fall into a number of categories. First of all, there is concern about the marketing practices of MDA and its agents in Hong Kong. Specific allegations relate to misrepresentation on matters such as fees and facilities. Secondly, there have been complaints about the school facilities. Accommodation arrangements have been unsatisfactory and the intensive English language program in particular did not meet students' expectations and had not been properly accredited. Other matters relating to the welfare and treatment of students are also of concern to the people making the complaints. A report by my Department, which I instigated, has confirmed the validity of many of these complaints. But I want to emphasise that this is just a one-off incident in what has been a very successful program of offering full fee courses in Australia to overseas students. This has been a rapidly growing program and it is perhaps not surprising that there have been some teething problems of this kind. However, the Government is determined to ensure that this incident will not be allowed to tarnish the high reputation that Australia has developed for its education system, particularly in Hong Kong from where the greatest number of students coming to Australia originate. The welfare of the students affected has been immediately addressed. My Department has been instructed to facilitate the transfer of students to other schools where this is requested by the student with parental consent. Members of the Melbourne community have assisted by offering alternative accommodation, help in transferring to new schools and counselling on legal rights. The Government is co-operating with Victorian authorities in examining the operations of the school. For the time being, the school has been suspended from offering places to overseas students. Mr KATTER —I address my question to the Minister for Administrative Services. Have all compensation claims received by the Parliament House Construction Authority (PHCA) associated with the banning of rainforest timber from north Queensland now been received and assessed? Does the Minister still assert that the value of these claims is $500,000? What has been the additional cost to the Parliament House Construction Authority of the Commonwealth ban on Queensland rainforest timbers? Finally, could the Minister advise whether or not the timber used in construction as an alternative to the Queensland timber was supplied locally or was imported? Mr WEST —When I present the thirteenth report of the Parliament House Construction Authority sometime within the next six weeks, we should be in a position to give the full cost of the decision not to use rainforest timber in the new Parliament House. The question of whether or not we should use rainforest timber in the new Parliament House was discussed some months ago and there are a number of misconceptions around relating to the decision that was taken. The Parliament House Construction Authority, in recognition of its obligations under the Australian Heritage Commission Act, required those seeking to use timber felled from heritage areas after 6 March 1986 to seek prior and written approval from the PHCA. No approvals have been sought or given in that regard. We announced the intention of nominating the wet tropics area of north Queensland for World Heritage listing. As a result, at that time a north Queensland company placed bans on the delivery of rainforest timbers ready for shipment to manufacturers of furniture for the new Parliament House. Also the main construction company would not give assurances that the timber had not been felled after 6 March 1986 in accordance with the contract in relation to areas excluded by the PHCA's timber agreements. At that time the Authority and I had to discuss the situation. Companies which had a contract to supply something like 40 per cent of the timber for the furniture were simply refusing to supply to score a political point. Obviously we could not continue to tolerate that situation. At any rate, the contracts stipulated that the timber ought not to come from national heritage areas. I know that the Authority, after discussion with me, sought assurances from the main contractor concerned that the timber in fact did not come from areas which were stipulated in the contract as not being acceptable. At that point we certainly had to take a decision on whether or not the whole series of contracts for the provision of furniture would be delayed or not. So we assessed the situation and took an overall decision that in fact we would not take the timber anyway and, furthermore, that we would not accept any rainforest timber that was not in the hands of the manufacturers after a date early in August. That was a tough decision to take. We had to take it. We had a position where this Government had legitimately decided to nominate the wet tropics of Queensland for World Heritage listing. We had contracts which stipulated that the timber was not to come from areas that had been listed by the National Heritage Commission. We could not get the assurances on supply source from the companies concerned which were to supply something like 40 per cent of the timber. So we were faced with having to make a decision about what to do. We took the tough decision, in effect to cut our losses and to get out. The question of how much that decision will cost will be reported in due course. However, in the main, the timber for the furniture in the new Parliament House will be local and imports will be minimised-in fact, I do not think that any imported timber will be used at all in the new Parliament House furniture. Finally, the figures that have been bandied about in the newspapers as to the cost of this decision being around $15m are simply wildly exaggerated and I doubt whether the final figure, when it is determined, will exceed $900,000. In fact, it should be less. We had deadlines to meet and, as the Minister, I would not tolerate a company in north Queensland attempting to stand over this Government. Mr LINDSAY —Has the attention of the Minister for Defence been drawn to claims that the Australian Defence Force is bored and underutilised and should be used to back up Australia's foreign policy objectives? If so, is the Australian Defence Force bored? Are members of the Defence Force given opportunities to serve abroad? Does the Australian Defence Force contribute to developing better relations with our regional neighbours? Mr BEAZLEY —The honourable member for Herbert could probably answer his question better than I can because of the contact he has with servicemen in his area. I have seen the Opposition's claims to the effect that it believes that members of the Australian Defence Force are bored and that it would be quite useful to use them overseas to overcome that boredom. However, my impression of our servicemen is that they are not bored and that they are now very highly geared to developing doctrine and tactics associated with the White Paper strategies of defence self-reliance. Indeed, while many of them are preoccupied this year with bicentennial activities, they are working up to extremely big exercises next year in Kangaroo 89, which will exercise the capabilities of our defence forces, particularly our ground forces, right across northern Australia. Apart from those activities, members of the Australian Defence Force are intensively and increasingly involved in activities overseas associated with the defence co-operation program (DCP). In fact, each year some 1,300 members of the Australian Defence Force travel abroad for combined exercises and 500 are overseas on long term training and exchange programs or DCP projects. That is quite a sizeable proportion of them. In addition, 122 visits were made by the Royal Australian Navy to 16 countries last year. I think the evidence of our experience last year should suggest to all honourable members that, where we define it as being in our national interests and where we seek either to advance these interests or our relations with other countries, this Government is not at all loath to use our military forces appropriately. But we will use them overseas in connection with the national interest; we will not send them there just because we believe them to be bored. Mr HOWARD —I refer the Prime Minister to the answer he gave me on superannuation at the commencement of Question Time. Given the evident interest of the New South Wales Premier in this matter, can the Prime Minister assure the House that he will give precisely the same answer to that Premier at Friday's Economic Planning Advisory Council meeting in the event that Mr Unsworth raises the issue? Mr HAWKE —I may well give it to him before then. Mr COHEN —I direct my question to the Prime Minister. I am sure I speak for the whole House when I say that we all appreciate the stunning success of the Australian film industry in giving Australia an extremely high profile internationally. It has probably done almost as much for Australia internationally as the work done by my colleague the Hon. John Brown, with his excellent series of advertisements with Paul Hogan. I welcome him up here to the `feather duster' section of the House. Is the Prime Minister aware of the appalling state of the industry at the moment? Its gross production has fallen from $186m in 1986-87 to $50m and is on the verge of collapse. I am sure he is aware that this is caused by the changes to the 10ba system, with its gradual reduction from 150 per cent, to 120 per cent and, of course, the reduction in the marginal tax rates which have had an impact. What action does the Government propose to take to ensure that we have this strong and viable film industry of which we, as Australians, are all so proud? Mr HAWKE —I certainly share with the honourable member for Robertson the pride that he properly has in the quality of the Australian film industry. I think that it has been one of the great developments of Australia over recent years-and not simply in the last five years; this is something which has occurred over a longer period. All of us take pride in that. I assure the honourable gentleman that I have noticed the reference to the meetings that have recently been held on this matter and the concern that has been expressed. At this point I am not aware of any representations that have been made to Government. I am not saying that they have not been made. They may have been made to the appropriate Minister but they have not come across my desk. Mr Cohen —I was the appropriate Minister at one stage! Mr HAWKE —Perhaps we can enter into some discussions about some honorary positions! Seriously, I am not aware of anything that has come across the Government desk so far, but if the industry wishes to make an approach to us we will, as we have in the past, be more than prepared to listen to its representation. Mr BEALE —Is the Minister for Immigration, Local Government and Ethnic Affairs aware of the fact that, in its first month of operation, nearly 100,000 air travellers have refused or failed to pay the new arrival tax? Is he aware of the fact that the air carriers will have to make up the difference of half a million dollars and that the worst hit airline will be Qantas Airways Ltd, which carries the most passengers? Why is the Government inflicting this penalty on Qantas? Why is the Government's new tax, called an arrival fee, collected on departure? Finally, does this out of touch Government know whether it is coming or going? Mr HOLDING —I am aware of the matters that the honourable member has raised. First of all, I point out that this matter is a question of general policy. This Government is endeavouring to raise very considerably the standards of our airports and the way in which passengers are processed as they come through so that there are minimal time delays and to update facilities. The policy question is whether the burden of those costs should be borne by all Australian citizens or whether we should adopt the user pays principle. This legislation passed through the Parliament. The airlines which are now complaining asked the former Minister whether they could adopt a methodology for the collection of that fee. The Government easily could have set out in the legislation the method by which the fee could be collected, but the airlines specifically asked for this right. Having asked for that, and having not been prepared to put in a system which produces an effective collection, they are now blaming the Government for their own failure. At this stage I have indicated a willingness to meet the officers representing the airlines on this matter next Tuesday, but I suggest that Opposition members who run around Australia talking about the need to cut costs, going for the quick political exercise, should first address the policy question. Do they believe that the cost of updating and producing modern immigration facilities at airports which are very expensive, should be borne by all Australian taxpayers? If that is their policy, then that is a legitimate position. However, I doubt whether that is the Opposition's position. Do honourable member's opposite believe that the prime burden should be borne by those who use the facilities? Some of the arguments used in respect of this matter are absolutely specious. It is palpable nonsense to suggest that Australia will lose Japanese tourists because they will have to pay the equivalent of the cost of a cup of coffee in the Ginza. Mr LAVARCH —Has the attention of the Minister representing the Minister for Finance been drawn to the severe flood damage suffered last weekend by the south-west Queensland town of Cooyar within my electorate of Fisher? Will the Commonwealth provide financial assistance in conjunction with the Queensland Government to those residents of the town who have suffered loss and hardship due to the flood? Mr DAWKINS —I thank the honourable member for Fisher for his question. I note his great concern for the residents of Cooyar. I am aware of the destruction caused by the flood which struck the town in the early hours of Saturday morning. In just 15 minutes flood- waters swept away three houses, two shops, the town's community hall and several motor vehicles. Virtually all other homes and buildings in the town were quite severely damaged. Most tragically of all, two lives were lost, and I extend my condolences to the families who have lost loved ones and to those residents who have lost their homes. I assure the honourable member for Fisher that the Government will provide financial assistance in matching expenditure by the Queensland State Government under the long standing natural disasters relief arrangements. The arrangements recognise that the States have the primary responsibility for the administration, provision and financing of natural disaster relief measures in line with their constitutional relief responsibilities in this area. The Commonwealth will reimburse the Queensland Government at the level of at least 50 per cent for grants made to relieve personal hardship and distress by the provision of such items as emergency clothing and accommodation. Further, as expenditure by that State in the current financial year has previously exceeded the agreed threshold for Commonwealth assistance, all approved expenditure by Queensland on the restoration matters will be matched dollar for dollar. Such assistance may take the form of concessional loans to small businesses, voluntary non-profit bodies and needy persons as well as grants to eligible public authorities for the restoration of public assets such as roads, bridges and buildings. Mr CONNOLLY —I direct my question to the Minister for Social Security. I refer the Minister to a letter sent by the Minister for Finance to Mr Mansfield, the Assistant Secretary of the Australian Council of Trade Unions (ACTU), which discussed proposed changes to the Commonwealth employees workers compensation scheme. Will the Minister confirm that the Government has agreed to a scheme that will retrospectively cut workers compensation already awarded to former Commonwealth employees over the age of 65? Will the Minister also confirm that it is the Government's intention to remove the ability to sue under the negligence provisions of the common law? Is it a fact that this proposed scheme has not been made known to the 8,500 people receiving Commonwealth workers compensation-those who will be on the receiving end of this decision because the ACTU refuses to agree with its recommendations and has threatened industrial disputation if it goes ahead? Mr HOWE —It is true that the Government has given a great deal of consideration to the reform of the Commonwealth compensation system. It is also true that we seek to create a system of Commonwealth compensation which does much more to encourage rehabilitation, and which discourages exaggeration and maintenance of a disabled role. Some elements of the new scheme have been announced, but the Government has been giving further consideration to a balance of quite difficult questions. The honourable member for Bradfield referred to purported correspondence with Senator Walsh. I saw the report in a newspaper. It is true that there has been a great deal of discussion with the ACTU, and there may well need to be further discussions with that body and indeed with other parties. When the Government is in a position to announce the final details of the scheme, it will do so. Mr HAWKE(Wills-Prime Minister) —I seek leave to make a brief statement on comments that were made yesterday following a question from the Leader of the Opposition (Mr Howard). Madam SPEAKER —Is leave granted? There being no objection, leave is granted. Mr HAWKE —I am indebted to the Leader of the Opposition and I will seek to make this statement not in terms of argument and expressing my confidence in Senator Tate; that has all been done. When the issue of Senator Tate's having misled the Parliament first arose, I sought an explanation of what had happened from him. He explained what had happened. He did in fact pass me the material provided to him by the Australian Federal Police, including the two paragraphs of the AFP memorandum of 14 September, which he had drawn upon but not quoted directly in his answer to the Senate on 14 December. I was satisfied by his explanation and his assurance that he would express his apologies to the Senate for having inadvertently given a misleading impression of the nature of his briefing. I add the following in terms of what was said yesterday. I appreciate that nothing has been said about it, and therefore my answer seems to have been understood, but in case there is any misunderstanding I want to add the following. Yesterday the Leader of the Opposition asked me: I ask the Prime Minister: Has he read the document made available by Senator Tate to his opposite number on the Opposition front bench, the honourable member for Flinders? If not, how can he give the categorical assurance that he gave just a moment ago? The Leader of the Opposition referred to `document' in the singular. As is clear from Senator Tate's personal explanation yesterday, he provided the honourable member for Flinders with two documents: the full briefs of 14 September and 13 November. I began to give an answer to the Leader of the Opposition explaining that I did not know precisely what document Senator Tate gave to the honourable member for Flinders. I was aware, as I stated in my earlier answer yesterday, that the Opposition spokesman on justice had been provided with a confidential section of material from the police, but I did not know precisely the extent of documentation that Senator Tate had shown to the honourable member. I was not therefore able to say that I had read the document which the Leader of the Opposition was referring to. It is clear from the Hansard that the Opposition interjected-I am not complaining about that-and was not interested in what was being put, so I confined my answer to the essential point, namely, that I satisfied myself on the issue of Senator Tate's answer to the Senate on 14 December. Mr HOWARD(Bennelong-Leader of the Opposition) —Madam Speaker, I seek leave to make a short statement on the same matter. Madam SPEAKER —Is leave granted? There being no objection, leave is granted. Mr HOWARD —The point at issue here is a fairly simple one, and that is that a document or documents furnished in confidence by Senator Tate to the honourable member for Flinders (Mr Reith) which, as I understand it-and it is open to the House to allow the honourable member for Flinders to illuminate this matter further, which may well be appropriate for him to do-contain some material which the Australian Federal Police sought to retain as confidential, were, in the view of the member for Flinders, at odds with the claim made by Senator Tate that he did not mislead the Parliament. It is upon that basis that my colleague said that he did not accept Senator Tate's argument. It is upon that basis that I asked the Prime Minister (Mr Hawke) whether he had satisfied himself by reading that particular document containing that material. In the absence of having read it I was at a loss to understand how the Prime Minister could express the confidence he did in Senator Tate. I am still unclear from the elaboration the Prime Minister gave a moment ago as to whether he has, in fact, read the material that has been read by the honourable member for Flinders. They might like to go behind the chair to talk about it. The Prime Minister sought to add to the matter. I make the point that it is still not clear to me whether the material read by the honourable member for Flinders has been read by the Prime Minister. I also make the point that perhaps the best way to resolve the whole matter is for the material to be tabled in this Parliament and for the Parliament to make an assessment of whether the confidence of the Prime Minister in Senator Tate is properly placed. Mr HAWKE(Wills-Prime Minister) —Madam Speaker, I seek your indulgence. I am indebted to the Leader of the Opposition (Mr Howard). I would have thought that what I had said was clear. I was not sure yesterday, in terms of the question of the Leader of the Opposition whether the whole of the area that the Leader was talking about had been perused. I did not know at that point whether additional documents other than the one that is in question had been provided. I, of course, did read-- Opposition members interjecting- Mr HAWKE —I am saying that in respect of what was provided I have confirmed to myself that I have read that document. There was nothing further. There was the answer and the material from the police. I read that. I had spoken to the Minister for Justice (Senator Tate) and he told me what had happened. I had provided to me, after I had spoken to him, the material. So I can assure the Leader of the Opposition that there is nothing tricky about this. I have, in fact, read the material, but I was not sure yesterday whether there was more than that. As to the more substantial point that the Leader of the Opposition has gone to, I think he would appreciate, if he thinks about it, the inappropriateness of the course of action that the material that was provided should be made available generally. The whole point of the difficulty that arose was that the senator had been provided with the advice from the Australian Federal Police and, as I should think the honourable member for Flinders (Mr Reith) can indicate, a clear indication from the Federal Police that certain parts of it should not be exposed for reasons which are quite clear. However, the Minister, Senator Tate, in the circumstances made it available, and in my judgment properly made it available, because he had full confidence that the honourable member for Flinders would respect the confidentiality of the matter. This was the request, and the proper request, of the Federal Police that the necessary confidentiality of the matter should not be breached. I know that the confidence Senator Tate had in the honourable member was properly placed and that there would not be any problem in his having access to it. But it would not be appropriate, and I hope that the Leader of the Opposition will agree, to make it generally available to the House. Mr HOWARD(Bennelong-Leader of the Opposition) —Madam Speaker, I seek leave to make a further statement. Madam SPEAKER —I call the Leader of the Opposition. Mr HOWARD —I could appreciate in normal circumstances what the Prime Minister (Mr Hawke) has put about the publication to the House and therefore to the community at large, if this material is valid, as a general proposition. The difficulty of applying a general proposition in this case is that the honourable member for Flinders (Mr Reith), having been given access to the material and having, may I say, preserved the complete confidentiality, has not sought to reveal the contents of that document and has, therefore, behaved quite properly. But he has formed a contrary view to that of the Minister for Justice (Senator Tate) and that of the Prime Minister about the substance and the meaning of that document. In those circumstances, while I acknowledge that in a general state of affairs what the Prime Minister has put would be correct, when we are dealing with a question of ministerial candour and propriety and the enforcement of standards it seems to me, and I hope the House, entirely appropriate, given the difference of views taken by the Prime Minister and the honourable member for Flinders, that the material be made public. Mr REITH(Flinders) —Madam Speaker-- Madam SPEAKER —Order! Is the honour- able member seeking leave? Mr REITH —Yes, I am. Madam SPEAKER —Leave is granted. Mr REITH —I will briefly detain the House to put this matter into some perspective as it relates to me. When this matter was first broached, I understood that the Minister for Justice (Senator Tate) had had a conversation with a daily newspaper. As a result of that a member of staff from the Minister's office contacted a member of my staff and said that the Minister had a proposition for this matter to be resolved. The proposition was that the document would be made available to me and I could satisfy myself-to use the Minister's words-that he had not, in terms of the substance of the answer he gave to the Senate in December, misled the Senate. My response was that if the matter was 100 per cent clear, if I was in a position of reading a document in my possession on the condition that it was 100 per cent certain that I would not therefore be placed in an embarrassing position, that is, having a document which I could not disclose, then I was prepared to receive the document. I had a conversation with Senator Tate the next morning. That was stated to him, and two conditions of my access to the document were that, firstly, I would keep the document confidential and, secondly, that my receipt of the document would not prejudice any existing application by my colleague the honourable member for Dawson (Mr Braithwaite) under the Freedom of Information Act. The document was then supplied to me by fax machine and I read the document. I rang the Minister and said quite frankly, `I have now read the document and I fail to see on what basis I can support your interpretation and therefore the answer that you gave in the Senate.' Mr Cleeland —Surprise, surprise! Mr REITH —It was a surprise. I am quite upfront about this. It was a surprise because I was told that any interpretation of the document would not place me in the embarrassing position of being in conflict with the Minister over a document that I could not release. I can tell the House that I am not pleased about the matter, being bound by the confidentiality provision which I gave to the Minister. I think there are still some questions that remain unanswered in regard to this matter. The Prime Minister (Mr Hawke) says that he-- Mr Beazley —I raise a point of order, Madam Speaker. This is going well beyond your indulgence. The honourable member is debating a matter of substance. If he wants to debate a matter of substance he can give notice of motion like anybody else in this House, but your indulgence, Madam Speaker, is being strained to breaking point on this. The Leader of the Opposition has had an opportunity to answer the Prime Minister. Mr Howard —He got leave. Mr Beazley —No, he asked for indulgence and he got Madam Speaker's indulgence. It was not leave. The Leader of the Opposition asked for leave. The honourable member for Flinders asked for indulgence and he got it. Mr REITH —The Prime Minister today has raised this matter by way of further explanation-- Madam SPEAKER —Order! The Chair is no longer giving leave or indulgence for any further debate on this. There are proper forms of the House that the honourable member should use if he wishes to take the matter any further. I suggest he look at them. Mr REITH —Then I seek leave, Madam Speaker, to make a statement on this matter. Madam SPEAKER —If you are seeking leave to make a statement you must ask for leave of the House. Mr Fife —On a point of order, Madam Speaker: the honourable member sought leave and leave was granted. He is entitled to speak. Madam SPEAKER —And I heard him. If he is seeking leave to make a statement to the House he will need the House's concurrence by seeking leave. Will he please ask for leave of the House to make a statement? Mr Fife —Madam Speaker, on the point of order: the honourable member sought leave and leave was granted. Under those circumstances he is entitled to be heard. Madam SPEAKER —He sought leave to do what the Prime Minister and the Leader of the Opposition did, and that was to speak on this topic. He now seeks leave, as he stated clearly to the House, to make a statement. He therefore asks for leave of the House to make a statement. Mr Reith —Madam Speaker, I sought-- Madam SPEAKER —The honourable member sought leave of me to add to what had been brought up by the Prime Minister. Mr Reith —Madam Speaker, if I may, on a point of order: there was some dispute as to whether or not leave had been granted. It seems to me that you granted leave on the question in regard to my response to remarks made by the Prime Minister. I can assure you that those remarks are not yet complete. Mr Beazley —On the point of order, Madam Speaker: the honourable member sought leave of you. He did not seek leave of this side of the House. He sought your indulgence, which you are allowed to give. I ask for your interpretation of the extent of your indulgence as to whether you would permit him to proceed further along those lines. Madam SPEAKER —The Chair gave leave to the Prime Minister to add to a question he answered yesterday. The Chair then gave leave to the Leader of the Opposition. He finished his statement. The Chair then gave leave to the Prime Minister again and the Leader of the Opposition again and then to the honourable member for Flinders. That has finished. If the honourable member wishes to make a statement on this matter, he is requested to seek leave of this House. Mr Howard —I take a point of order, Madam Speaker. With respect, Madam Speaker, your recollection of the chain of events is in error in that, as I recall it, the honourable member for Flinders had not completed his explanation. He was, in fact, interrupted by the Leader of the House who sought to take a point of order. It would seem to me that, until that interruption, the honourable member for Flinders was still enjoying the benefit of the leave that had been given. As you rightly said in not your last explanation but the one immediately preceding it, he was given precisely the same leave to speak on this matter as was given to the Prime Minister and me. That, as I understand it, was leave that is normally given. I remind the Leader of the House that one does not seek the leave of the Government or the Opposition to make a statement; one seeks the leave of the House. The honourable member was given leave. I put it to you that he is entitled to finish his statement and not to be interrupted by the Government. Mr Beazley —Madam Speaker, I take a point of order to that point of order. There is a difference between the Speaker's indulgence and leave. The first time the Prime Minister spoke he did so with Opposition leave, which effectively is leave of the House. The second time the Leader of the Opposition spoke he did so with Government leave, which is effectively leave of the House. The second time the Prime Minister spoke he spoke with the Speaker's indulgence. Those were the words he used and that is what he asked for. When the honourable member for Flinders came forward to the box he asked for the same form of indulgence. My point of order was whether the indulgence of the Speaker had been taken beyond the point which it ought to and whether or not he ought to be either seeking leave to make a statement or putting a proposition before the House. Madam SPEAKER —The Chair is of the opinion that it gave to each of the people who asked for indulgence a fair go. If there is any further debate on this issue-- Mr Reith —On a point of order, Madam Speaker-- Madam SPEAKER —I have ruled on the point of order. The Chair believes that it has given a fair go to each of the speakers. Mr Reith —Madam Speaker, I was interrupted. I have not had a fair go at all and there are questions that remain to be answered. Mr Fife —On a point of order, Madam Speaker: when the honourable member first rose he sought your indulgence and you corrected him. You said that he would need to seek leave. Madam SPEAKER —I said that I would give him leave. Mr Fife —He sought leave and leave was granted. Madam SPEAKER —From me. Mr Fife —Leave was granted by the House and, under those circumstances, he is entitled to be heard. Madam SPEAKER —Leave was granted from me. It was not granted from the Government. I gave him leave to continue. The Chair has ruled that the matter has now come to a conclusion. Mr Shipton —Madam Speaker-- Madam SPEAKER —Does the honourable member for Higgins wish to raise a point of order? Mr Shipton —Yes. Madam SPEAKER —If everyone will be quiet I will hear it. Mr Shipton —There are two points of order which I wish to make relevant to the subject under discussion. The first relates to the Leader of the House debating the issue. I refer to page 446 of Pettifer's House of Representatives Practice, which says: A request for leave cannot be debated, nor can leave be granted conditionally, for example, on the condition that another Member is allowed to make a statement on the same subject. My point of order is that a request for leave cannot be debated. The Leader of the House cannot debate the issue. The second point, which is relevant to the rights of the shadow Attorney-General, the honourable member for Flinders, is that once leave has been granted it cannot be withdrawn. Madam Speaker, you gave the honourable member for Flinders leave. In accordance with the footnote reference No. 56 at page 447 of House of Representatives Practice relating to House of Representatives debates on 13 March 1953, the honourable member for Flinders has the right to continue uninterrupted as you have granted leave. That leave cannot be withdrawn. Mr Beazley —Madam Speaker, on the point of order: it is quite clear that the rules relating to leave of the House are as outlined by the honourable member for Higgins. That is not the point here. The point is one of leave or indulgence granted by the Speaker, which is a totally different matter and is exercised at the discretion of the Speaker. It is not at the discretion of the House. If the Speaker chooses to end the period of indulgence, as the Speaker always does effectively on a question of personal explanation, that is a matter for the Speaker and not the House. My question was related to the extent of the Speaker's indulgence. I submit, Madam Speaker, that you have expressed the extent of your indulgence and have informed the honourable member that if he wants to proceed he needs further leave. Madam SPEAKER —I point out to the House that what happened in this instance was that the Prime Minister sought leave. I asked the Leader of the Opposition whether leave was granted and he said, `Yes'. He then wanted to speak. I asked the Prime Minister whether he gave leave and he said, `Yes'. The second time the Prime Minister spoke, he spoke by indulgence. The second time the Leader of the Opposition spoke-he will not remember it because he had started to speak-he did not get leave of the House; he got indulgence. The shadow Minister, the honourable member for Flinders, asked for indulgence and I said that he had leave. I therefore rule that he has finished, because my indulgence is now withdrawn. If he wishes to make a statement he has to get leave of the House. Mr Wilson —On a point of order, Madam Speaker: if one accepts the ruling you have just given, should it be interpreted that you will withdraw your indulgence at the request of the Leader of the House, or will you exercise that as the Speaker of the House? Madam SPEAKER —No, I think that it would be quite out of order for the honourable member to suggest that. I would not suggest that he continue with that. Mr REITH(Flinders)(3.08) —I move: That the Speaker's ruling be dissented from. I am not surprised that the Government is very anxious to bring this matter to a conclusion today because there are a lot of unanswered questions in regard to the conduct of the Minister for Justice, Senator Tate. To put this matter in some perspective, I go back to the history of it. In the Senate in December a question was put to Senator Tate concerning certain matters relating to Federal Hotels Ltd. The senator was asked a question containing three questions. Mr Beazley —On a point of order, Madam Speaker: I go to the question of relevance. The topic is that of dissent from your ruling. It is not canvassing the issue of Senator Tate. The honourable member is obliged to address the Standing Orders question entailed here; not what he is saying. Madam SPEAKER —Order! It would be appreciated if the honourable member for Flinders would get to the point of his dissent from my ruling. Mr REITH —I certainly will get to the point, Madam Speaker. These matters arise out of a question put to and answer by the Minister for Justice in December. He was asked three questions. Madam SPEAKER —Order! You are speaking to your motion to move dissent from my ruling. What you have to say must be relevant to what I said, to what you said, to what the Prime Minister said and to what the Leader of the House said. You must speak on the topic that I have ruled on, that your indulgence has been recalled. Mr REITH —Madam Speaker, the motion that I have moved is intertwined with the substantial matters. Madam SPEAKER —Order! I point out that it may be intertwined, but you must prove to the House why my ruling was out of order. Mr REITH —I would be very happy to prove this matter to your conclusive satisfaction, Madam Speaker. I have moved dissent from your ruling because I was in the process of responding to remarks made by the Prime Minister, which remarks were intended amplification of a response and answer that he gave to the House yesterday. The need for this House to have a conclusive and appropriate statement on this Tate matter has been brought about by the Prime Minister's additional response which he raised today of his own initiative. Mr Beazley —On a point of order, Madam Speaker: this has absolutely nothing to do with whether your ruling on the question of indulgence was in order or not. Madam SPEAKER —Order! The honourable member for Flinders must show the House why he is moving dissent from a ruling made by the Chair. The relevant points in that are the matters that took place from the Prime Minister's two addresses to the House and from the two addresses to the House by the Leader of the Opposition, one with leave and one without, and your-- Mr REITH —The basis of the motion is very clear, Madam Speaker, and that is that in my submission to you and to the House I was given leave to address a matter, the substance of which had been raised by the Prime Minister. Madam SPEAKER —Correct. Mr REITH —Madam Speaker, I was halfway through my response to remarks from the Prime Minister when you peremptorily withdrew my leave to address the House. Therefore, I am entitled in this motion for dissent in my view, to raise before the House the matters of substance that I was then addressing. Madam SPEAKER —No. The honourable member is not correct. Mr REITH —Well, yes, Madam Speaker. Madam SPEAKER —Order! The honourable member for Flinders can debate only the matter before the Chair, which is dissent from my ruling. Mr REITH —Madam Speaker, the dissent from your ruling is based on the fact that I had not concluded my remarks, remarks made as a result of receiving leave. Madam SPEAKER —Indulgence. Mr REITH —I can only show to the House the fact that my remarks were not completed by referring to the substance of the remarks. For you, Madam Speaker, to suggest otherwise is to withdraw my right to refer to these matters in substance and in support of my motion. Madam SPEAKER —The honourable member may not debate the matter. He may only dissent from my ruling and debate the reasons why he is dissenting. Mr REITH —The reasons I am dissenting, Madam Speaker, are very simple; they are the fact that my leave to make remarks on this matter was withdrawn before I had concluded my remarks. It is part of the forms of this House that members who are given leave to address the House are given leave so as to address fully all the matters the subject of the remarks by the Prime Minister. What would be the point of giving leave to members if, halfway through their remarks, they were asked to desist? The only reason we were asked to stop was that they did not want to hear what had to be said about Senator Tate. That is the reality. This is nothing but the gag. Mr Beazley —Madam Speaker, on a point of order, once again the honourable member for Flinders-- Mr REITH —This Minister has not got a clue what the standards are. Mr Beazley —I am the only one you have at the moment, I am afraid. Again, Madam Speaker, I take the point of order that the honourable member for Flinders started on the subject of his motion and moved straight off it. He is consistently defying your instructions. Madam SPEAKER —Order! The Minister is incorrect. The honourable member for Flinders had not moved on to the substance of what he had to say. I am listening very carefully. Mr REITH —Thank you, Madam Speaker, because your ruling then highlights the fact that these people are not interested in anything other than trying to keep this Tate matter under wraps. This is why I am to be prevented from addressing the basic issues. Honourable members in this House must ask themselves why it is that the Prime Minister was sufficiently concerned about what he had said and what he had seen in regard to Senator Tate that he was back in the House today to try to give us some explanation. It was, I must say, a half explanation at best. Madam SPEAKER —Order! You are now moving on to the substance of the debate. Mr REITH —Madam Speaker, I move on to the substance merely to illustrate the procedural devices being put to test today by the Government so as to attempt a gag on those substantial matters. Madam SPEAKER —What the honourable member is debating is not the Government but a motion of dissent from the ruling of the Speaker. Mr REITH —Madam Speaker, it is all very well to attempt to compartmentalise and to put in categories some of these issues, but the reality is that the points of order raised by the Leader of the House have behind them a political motive-a political motive to gag debate on Senator Tate. I think it is common knowledge that in the last few days Senator Tate was off to the Prime Minister to discuss with him his possible resignation and Bob said, `We have two already. I cannot take a third'. Madam SPEAKER —Order! Would the honourable member either get back to the dissent debate or sit down. Mr REITH —I am very happy to get back to the dissent debate, if I ever departed from it. Madam SPEAKER —Order! The honourable member will take the Chair's ruling that he has departed very strongly and, if he continues, I will require him to resume his seat. Mr REITH —Madam Speaker, I moved the dissent from your ruling because I believe that in the forms and procedures of this House it is important that when honourable members arise, having gained leave, they have a full opportunity to meet the subject matter which caused them to seek leave in the first place. It is a question of the sorts of basic democratic rights of honourable members as to whether or not they will be entitled to speak on these issues, or whether or not they are to face the gag. On that basis I moved a dissent from your ruling for the very simple reason that I had commenced to address in my remarks a number of matters of great substance and halfway through those remarks a point of order was raised by the Leader of the House, who, as I said, was simply politically motivated, on which you then made a ruling, which we dispute, as to my rights to proceed. This is a matter of great significance because it relates, as a matter of substance, to the future of Senator Tate. Madam Speaker, as a member of the House, I wish to raise a range of matters in the House so we can give much greater consideration to the future of Senator Tate. As I have said to you, Madam Speaker, the fact that the Prime Minister came in here today concerned about what he had said has given rise to the debate that we have found ourselves in. Moving for dissent is not a motion that I put to you lightly, Madam Speaker. It is one of those circumstances where an honourable member should be given the fullest possible opportunity of broaching and of canvassing the many issues that have been raised. These issues have also been raised in the Senate. Given the manner in which the Prime Minister raised the issue, it is only appropriate that leave be given to me to respond to those remarks. If, for example, the Prime Minister (Mr Hawke) had come in and sought leave to make a statement and there had been some discussions between the Leader of the House and the Manager of Opposition Business (Mr Fife) this matter may have been raised. In fact, if we had had a more experienced Leader of the House these matters may have been raised as matters of discussion and within the Standing Orders; but, no, the Prime Minister waltzed in here-he did not have the benefit of the advice that he might have had from the previous member for Port Adelaide-and we saw a half-hearted response come up from the Prime Minister. On that basis, Madam Speaker, I think that in your interpretation of the Standing Orders, it was an obligation to consider the manner in which the issue was raised, the Prime Minister's response, and you should have taken that matter into account when you gave me leave; and, Madam Speaker, you should have taken that matter into account when you were making the decision as to whether or not that leave would be withdrawn. My submission is that the future of Senator Tate is a matter of great significance. It is an issue which this Parliament ought to be debating. We understand that the Government has real worries about this and that Senator Tate was persuaded to stay on. Madam SPEAKER —Order! The honourable member is deliberately flouting the Chair now and getting back to the same subject. Mr REITH —I conclude my remarks by saying this: I got up, in all honesty, to respond to remarks made by the Prime Minister, to give this House some account of the role that I played in Senator Tate's position. I did so in a quite straightforward manner so as to inform the House and give it proper facts upon which it might make some decision in respect of Senator Tate. I was not wanting an hour of the House's time, but just a few short minutes to make a simple explanation of my position so that people could understand how the situation had developed. I was quite straightforward and acted in good faith and I would have thought, Madam Speaker, that you would have encouraged me to take sufficient time so as to give all honourable members an idea of the background of this Tate matter. I must say that I was greatly disappointed that, simply as a result of a point of order from this second-hand new Leader of the House, halfway through my remarks, I find myself gagged and asked to withdraw and have leave taken out from underneath me. This is a matter of great significance. I think it is absolutely wrong that halfway through a member's address on a matter of great significance he should be asked to withdraw. Why should he be asked to withdraw? Why is it that members on the other side of the House do not want to hear the truth about the Tate matter? Madam Speaker, I commend this motion, even to members on the other side, and ask them to vote with us on this motion so that even they can hear the full facts of the Tate matter. Mr HOWARD(Bennelong-Leader of the Opposition)(3.24) —I second this motion. I wish to make two very simple propositions. The first of those is, with great respect, Madam Speaker, to remind you that before the plethora of procedural exchanges really got under way you made the very interesting and, I would submit to you, totally relevant observation that the honourable member for Flinders (Mr Reith) was speaking under the same conditions as I had been speaking. Mr Cunningham —Indulgence. Mr HOWARD —The honourable member for McMillan interrupts and says, `Indulgence'. The fact of the matter is that, even on the most rigid interpretation that I understand to have been made by you, Madam Speaker, the Prime Minister (Mr Hawke) and I were, at least on the first occasion that each of us spoke, speaking under leave and not under indulgence, so that disposes of what the honourable member for Cunningham, or the honourable member for Phillip, or whatever you are-we know who you are-- Mr Cunningham —I take a point of order, Madam Speaker. I ask that the Leader of the Opposition address a member of this House by his correct title. Madam SPEAKER —Order! The honourable member will resume his seat. Mr HOWARD —That has to be the most penetrating debating point he has made in the seven years he has been here! The simple point and the unavoidable fact is that on your own admission, Madam Speaker, my colleague was speaking with leave. I put it to you, as properly pointed out by the honourable member for Higgins (Mr Shipton), that, leave once having been granted, it simply cannot be taken away. It is simply not good enough, Madam Speaker-and I say this with the greatest of respect to you and to the office that you occupy-for you to rule, and we put it to you that your ruling is wrong, that the honourable member for Flinders be required to desist. A ruling to the effect that you think everybody, roughly speaking, has had a fair go is simply not good enough, because this whole thing started because people's assessments of what was correct and what was incorrect were at variance. It is because the honourable member for Flinders does not have the same benignly charitable view of the Minister for Justice (Senator Tate) as held by the Prime Minister that this matter is now before the Parliament. I remind the House, Madam Speaker, that when you were ruling on these matters you made the very clear point that the honourable member for Flinders was speaking in the same circumstances and on the same conditions as the Prime Minister and I had been speaking. You subsequently said, Madam Speaker, that the honourable member for Flinders had leave. That is the irreducible minimum of the argument that is put forward by the Opposition and it cannot be avoided. One either has the leave of the House to speak or one does not have the leave of the House. It does not matter what the Leader of the House (Mr Beazley) says or the Prime Minister says or I say; once leave has been granted, I put it to you, Madam Speaker, and to the Parliament, it cannot simply be wrenched away as it has been from the honourable member for Flinders. I think it is a great pity that a procedural imbroglio has prevented this House from addressing its mind to the real substance of this issue. It is important that that be understood, because if ever anybody displayed a sensitivity towards a Minister's position, the Prime Minister did today about the Minister for Justice. This House is entitled, quite beyond a resolution of the procedural matter that is now before it, to have a proper and full ventilation of that. These procedural problems have arisen because of quite legitimate attempts by the Opposition. I say to the House again, with all sincerity, and to those opposite who may be just weighing in their minds how they may vote on this motion of dissent, that their rights are as much at stake in this motion as are the rights of members of the Opposition, because they often speak with leave, their Prime Minister speaks with leave, and their Leader of the House speaks with leave. I put it to this House that if this motion is not carried we will have written into the procedures and conventions of this House a totally undesirable new rule, and that is that once leave has been granted it can summarily be terminated because the Leader of the House finds the going a bit uncomfortable. That is exactly what has happened on this occasion. I have very great pleasure in seconding the motion of the honourable member for Flinders. I say again that we are dealing here merely with the procedural surroundings of this issue. The Prime Minister's sensitive intervention at the end of Question Time has certainly confirmed our interest in the matter, and there are issues of substance that have to be addressed. It may well be said that he has further reignited our interest in the matter because he has added nothing except a guilt-ridden response. We will say more about that at an appropriate time. I second the motion moved by the honourable member for Flinders. Mr BEAZLEY(Swan-Leader of the House)(3.29) —There are quite simple issues involved in your ruling, Madam Speaker, which I support, and I oppose the motion of dissent. Several types of leave to speak can be granted in this House. One is the type of leave that was granted at the beginning of this discussion to both the Leader of the Opposition (Mr Howard) and the Prime Minister (Mr Hawke). That was leave of the House. The process by which that is obtained is quite simple. When it is leave of the House that is being sought by a Government member, the Manager of Opposition Business or whoever is responsible at the table is asked whether or not that leave is given; and if that leave is given, the discussion will proceed. The House does allow an unlimited time for that. Once leave has been so given, a quite wide range of matters can be canvassed. Certainly, this discussion began on exactly that basis. The second time the Prime Minister stood to speak, he did not ask for leave of the Opposition to do so; he asked for your indulgence, Madam Speaker. That implies a totally different type of leave. It is indulgence you usually grant to consider with brevity a specific matter, scarcely to canvass at length a whole plethora of issues or to canvass issues in very great detail. It is obviously sensible for you to have that power because it enables points of clarification of the sort that the Prime Minister was engaged in essentially in adding to the answer to a question. Leave to add to a question is another form of leave that again is given with the indulgence of the Speaker. It is given with the indulgence of the Speaker and may be taken away at the indulgence of the Speaker, and it is unlimited only to the extent that the Speaker permits it to be unlimited. That is all there is to it. When the honourable member for Flinders (Mr Reith) stood up, Madam Speaker, you did not turn to me and ask me whether or not I, as manager of Government Business in the House, granted leave for the Opposition member to speak. You spoke directly to him and gave him your indulgence. Whether you term it your indulgence, your leave or whatever, you gave it to him. You did not seek leave from me and, through me, from the whole House, which is the tradition. All that is being reaffirmed here by your ruling is the Standing Orders of this House-no more and no less. We are not here attempting to canvass the issues. If Opposition members wish to canvass the issues they can do so by giving a notice of motion and have the matter debated tomorrow. That course is clearly open to all members of the House. It is clearly a reasonable interpretation of your indulgence, Madam Speaker-the sort of interpretation that you gave-that you offer opportunities to members of this House to make points of clarification, not to subvert the normal processes by which this House undertakes its business. When there is a matter of substance to be discussed, it is brought on by a motion or with formal leave. So your interventions in this regard were entirely proper. I think you made the point very clear when you made your initial ruling concerning the processes by which you understood the discussion to have taken place. I think that discussion has proceeded satisfactorily to this point. Therefore, I move: That the question be now put. The House divided. (Madam Speaker-Hon. Joan Child) Ayes . . . . . . . . . . . 76 Noes . . . . . . . . . . . 54 —— Majority . . . . . . . . . 22 —— Baldwin, P. J. Howe, B. L.Beazley, K. C. Humphreys, B. C.Beddall, B. 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 Kerin, 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.Cohen, B. McHugh, J.Courtice, B. W. McLeay, LeoCross, M. D. Martin, S. P.Cunningham, B. T. (Teller) Mildren, J. B.Darling, E. E. Milton, P.Dawkins, J. S. Morris, AllanDubois, S. C. Mountford, J. G.Duffy, M. J. O'Keefe, N. P.Duncan, P. O'Neil, L. R. T.Edwards, Ronald Price, L. R. S.Fatin, W. F. Punch, G. F.Fitzgibbon, E. J. Saunderson, J.Free, R. V. Scholes, G. G. D.Gayler, J. Sciacca, C.Gear, G. Scott, J. L.Gorman, R. N. J. Snow, J. H.Grace, E. L. Snowdon, W. E.Griffiths, A. G. Staples, P. R.Hand, G. L. Theophanous, A. C.Harvey, E. R. Tickner, R. E.Hawke, R. J. L. West, S. J.Holding, A. C. Willis, R.Hollis, C. Wright, K. W. Aldred, K. J. Lloyd, B.Andrew, J. N. (Teller) McArthur, F. S.Beale, J. H. McGauran, P. J.Blunt, C. W. MacKellar, M. J. R.Braithwaite, R. A. Macphee, I. M.Brown, N. A. Miles, C. G.Burr, M. A. Millar, P. C.Cadman, A. G. Nehl, G. B.Cameron, Donald Peacock, A. S.Cameron, Ewen Porter, J. R.Cameron, Ian Pratt, M. P.Carlton, J. J. Prosser, G. D.Cobb, M. R. Reith, P. K.Connolly, D. M. Robinson, IanCowan, D. B. Rocher, A. C.Downer, A. J. G. Ruddock, P. M.Edwards, Harry Shack, P. D.Fife, W. C. Shipton, R. F.Fischer, Tim Sinclair, I. McC.Fisher, Peter Smith, W. L.Hall, Steele Spender, J. M.Hawker, D. P. M. Sullivan, K. J.Hewson, J. R. Tuckey, C. W.Hicks, N. J. (Teller) Webster, A. P.Howard, J. W. Wilson, I. B. C.Hunt, R. J. D. Woods, R. L.Katter, R. C. Wooldridge, M. R. L. Question so resolved in the affirmative. Madam SPEAKER —The question now is that the motion be agreed to. Mr Shipton —Madam Speaker, I have a relevant point of order on the issue of leave. I refer to Hansard. Madam SPEAKER —Order! The honourable member is quite out of order. The question has been put. Original question put: That the motion (Mr Reith's) be agreed to. The House divided. (Madam Speaker-Hon. Joan Child) Ayes . . . . . . . . . . . 54 Noes . . . . . . . . . . . 76 —— Majority . . . . . . . . . 22 —— Aldred, K. J. Lloyd, B.Andrew, J. N. (Teller) McArthur, F. S.Beale, J. H. McGauran, P. J.Blunt, C. W. MacKellar, M. J. R.Braithwaite, R. A. Macphee, I. M.Brown, N. A. Miles, C. G.Burr, M. A. Millar, P. C.Cadman, A. G. Nehl, G. B.Cameron, Donald Peacock, A. S.Cameron, Ewen Porter, J. R.Cameron, Ian Pratt, M. P.Carlton, J. J. Prosser, G. D.Cobb, M. R. Reith, P. K.Connolly, D. M. Robinson, IanCowan, D. B. Rocher, A. C.Downer, A. J. G. Ruddock, P. M.Edwards, Harry Shack, P. D.Fife, W. C. Shipton, R. F.Fischer, Tim Sinclair, I. McC.Fisher, Peter Smith, W. L.Hall, Steele Spender, J. M.Hawker, D. P. M. Sullivan, K. J.Hewson, J. R. Tuckey, C. W.Hicks, N. J. (Teller) Webster, A. P.Howard, J. W. Wilson, I. B. C.Hunt, R. J. D. Woods, R. L.Katter, R. C. Wooldridge, M. R. L. Baldwin, P. J. Howe, B. L.Beazley, K. C. 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 Kerin, 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.Cohen, B. McHugh, J.Courtice, B. W. McLeay, LeoCross, M. D. Martin, S. P.Cunningham, B. T. (Teller) Mildren, J. B.Darling, E. E. Milton, P.Dawkins, J. S. Morris, AllanDubois, S. C. Mountford, J. G.Duffy, M. J. O'Keefe, N. P.Duncan, P. O'Neil, L. R. T.Edwards, Ronald Price, L. R. S.Fatin, W. F. Punch, G. F.Fitzgibbon, E. J. Saunderson, J.Free, R. V. Scholes, G. G. D.Gayler, J. Sciacca, C.Gear, G. Scott, J. L.Gorman, R. N. J. Snow, J. H.Grace, E. L. Snowdon, W. E.Griffiths, A. G. Staples, P. R.Hand, G. L. Theophanous, A. C.Harvey, E. R. Tickner, R. E.Hawke, R. J. L. West, S. J.Holding, A. C. Willis, R.Hollis, C. Wright, K. W. Question so resolved in the negative. Mr REITH(Flinders)(3.46) —I move: That so much of the Standing and Sessional Orders be suspended as would prevent the member for Flinders moving forthwith that this House requires the Prime Minister to table all material forwarded by the Australian Federal Police to the Minister for Justice regarding an application by Federal Hotels for a casino licence on Christmas Island. Mr Howard —I second the motion. Mr DEPUTY SPEAKER(Mr Leo McLeay) —We will have a seconder after the member has made his contribution. Mr REITH —Thank you very much, Mr Deputy Speaker, for the invitation to make a contribution because today I have been gagged on a matter of fundamental importance. I want to talk about a question asked of Senator Tate and an answer given by him in the Senate as they relate to matters raised by the Prime Minister (Mr Hawke) today. The basis of the motion to suspend Standing and Sessional Orders is to allow the Prime Minister to come into this House and, for the sake of resolving this issue at last, place on public record a document which is now the subject of great dispute between the Opposition and Senator Tate. Of course, that document has already brought forward an apology from Senator Tate, for what that is worth, and an admission that he misled the Senate. It is pretty clear in the Westminster system-as the honourable member for Parramatta (Mr John Brown) ought to know-that if one misleads the House one is obliged to tender one's resignation forthwith. Well might members of this House ask: why is it that Senator Tate has not as yet tendered his resignation? We understand that he has had a discussion with the Prime Minister along the lines, `Bob, I think I ought to go', and Bob saying, `I do not think you can go now. We are not having a very good stretch at the moment'. The tabling of this document would put this matter beyond doubt. I make the point that the Minister for Justice (Senator Tate), on his own admission, misled the Senate, and on that ground alone he ought to go and he ought to go now. It is not just that matter of the omission of a relevant part of a document that motivates the Opposition to raise this matter. Of equal significance is the substance of what Senator Tate had to say in the Senate back in December. Before I was gagged after Question Time in attempting to respond to the Prime Minister, I was advising the House that I was provided with a copy of the document on the basis that it would remain confidential to me. It will remain confidential to me, it has so remained since I gave that undertaking and it will continue to be so in the future unless I am released from that undertaking by either the Prime Minister or the Minister for Justice. I believe that the time has come for that document to be so released because it is only by the release of that document that finally we and the public will be able to see whether or not the allegation that I have made is in fact an allegation of substance. I say it is. The Prime Minister came in at the end of Question Time today and attempted to amplify the response that he made yesterday. I must say that I listened carefully to what the Prime Minister had to say and I am still at a loss to understand exactly what role he has played in the Tate affair. Let the Prime Minister come back into this House and tell us when he first saw the document or a document, because he did not make clear what he has seen. Let him tell us when he saw what he saw. Let him come into this House and tell us exactly what documents he has read. It is interesting what the Prime Minister did not say. He did not come into this House and give a personal substantiation of Senator Tate's claims about the substance of this document. This was a very revealing omission because, when it came to the substance of that document, the Prime Minister was not prepared to go out on a limb with the Minister for Justice. Oh no, he just came in here with his typescript. Someone had handed it to him as he came into the House today and said, `Read that, Bob'. He came into the House and read it but it is no answer to the matters that the Opposition has raised in this House today and that were raised in the Senate yesterday. Mr Brumby —Mr Deputy Speaker, I take a point of order. As I understand it, the honourable member for Flinders is speaking to a motion for the suspension of Standing Orders. Having listened very carefully to his comments, it seems to me that he is canvassing in a very specific way matters which go to the subject matter of the foreshadowed motion. In my view, the honourable member for Flinders is clearly out of order. He is raising a specific subject matter which goes to the foreshadowed motion. I have not heard him once yet argue why Standing Orders should be suspended, which is the motion before the House. Mr DEPUTY SPEAKER —I draw the attention of the honourable member for Flinders to the fact that he should be canvassing why Standing Orders should be suspended. He should not be canvassing the substance of the matter that he may wish to raise later on. I am sure he is getting to that. Mr REITH —Quite frankly, Mr Deputy Speaker, I have had enough of members on the other side raising points of order to try to gag debate on the matter concerning Senator Tate. I simply invite you, Mr Deputy Speaker, to listen carefully to what I have to say. All that I have said today has been directed towards the motion calling for the suspension of Standing Orders, so that we can see the document, so that we can put an end to this matter, so that the doubts hanging over Senator Tate can be removed-doubts which obviously are very much in the Prime Minister's mind and which were the motive for him coming in here today to give us a convoluted explanation of what he said yesterday. There are questions now arising not only about what Senator Tate said but also about what the Prime Minister said yesterday. The Prime Minister obviously came into this place in an attempt to clarify his own explanation, which presumably now bears very close examination by the Senate. I have said on a number of occasions that I will not go back on the undertaking that I gave in regard to the release of this confidential document. But I call publicly for the release of that document. In doing so, I go to none other than Senator Tate himself because Senator Tate in the Senate yesterday, in the Senate back in December and in public utterances to the newspapers of Australia has said that his answer in no way misinterprets or in no way is inconsistent with the report. If that is what the senator says, what is the harm in his releasing that report? He says that everything in that report is already on the public record. I say to the Prime Minister that there is a cloud hanging over Senator Tate. It is time that the Prime Minister came back into this House and gave a full explanation on this Tate matter. The only way he can do that to the satisfaction of members of this House is to come back into this House and table that police report, a police report that Senator Tate says the contents of which are all on the public record. This issue is not going to just fade away. This is an issue of very considerable significance. It is an issue not just about Federal Hotels Ltd but about ministerial standards. Mr DEPUTY SPEAKER —Order! The honourable member's time has expired. Is the motion seconded? Mr HOWARD(Bennelong-Leader of the Opposition)(3.56) —I second the motion. I remind the House that the dispute between the Government and the Opposition about the fitness of Senate Tate to remain a Minister in the Hawke Government revolves around conflicting interpretations of three people. On the one hand, we have Senator Tate and the Prime Minister (Mr Hawke) saying that in their view nothing in the material that has not been made public conflicts with the substance of the answer given by Senator Tate, although Senator Tate, be it remembered without dispute, is on record as admitting that he misled the Parliament. On the other hand, we have the interpretation of the honourable member for Flinders (Mr Reith), the shadow Attorney-General, to the effect that so far from his examination of material supporting the interpretation of the Prime Minister and the Minister for Justice (Senator Tate) that there is no conflict between the unpublished material and the answer given in the Senate, there is a conflict. That is the situation at present. Is it not a supreme exercise in commonsense that that material be made public and that this House and the Australian public have an opportunity to make a decision as to whether the interpretation arrived at by Senator Tate and the Prime Minister is to be preferred or whether the interpretation arrived at by the honourable member for Flinders is to be preferred? It ought to be remembered by honourable members opposite that this issue is back before us today because of a bungled attempt by their Prime Minister to cloud the issue. In the process, all that the Prime Minister has done is deepen the suspicion on the part of the Opposition that the Government has something to hide. If ever we have seen an exercise in prime ministerial bungling, we have seen one today because, far from resolving doubts about the issue, all that the Prime Minister has done is to parade in stark form his sensitivity about the issue. I say to the Prime Minister, I say to Senator Tate, I say to the Leader of the House (Mr Beazley) and I say to members of the Government: What do you have to hide? Why do you not make this material available? Why will you not allow Parliament to make its judgment as to whether the Prime Minister is to be believed? I will put my money on Reith any day. We are not engaging in a piece of barracking such as at a football game. What this is all about is the cardinal principle that underpins our parliamentary system-whether Ministers and Prime Ministers are to be believed. If honourable members opposite want us to believe their Prime Minister, if they want us to believe their Minister for Justice, why do they not have the guts to have the documents tabled? It is as simple as that. The honourable member for Flinders, the shadow Attorney-General, has acted in a totally bona fide fashion. He has given his word and that word is now being hidden behind in a craven fashion by the Prime Minister and the Minister for Justice. If they really want us and this Parliament to believe that they are not petrified of another ministerial resignation, they will comply with the terms of this motion and have the document tabled. If it is the judgment of this Parliament that the version of the Prime Minister and the Minister for Justice is to be believed, that will be the end of the matter, but until such time as they can back their statements with facts, we will continue to pursue this matter. The only way it can be resolved and the cloud over Senator Tate's head removed is for the Prime Minister to have the courage of his assertions. He should come in here, table the documents and let the public and the Australian Parliament determine the matter for themselves. Mr BEAZLEY(Swan-Leader of the House)(4.02) —I oppose the motion. The Leader of the Opposition (Mr Howard) said that he would put his money on the honourable member for Flinders (Mr Reith). I guess that is why his deputy, the honourable member for Kooyong (Mr Peacock), makes money out of horse racing and he does not. Opposition members interjecting- Mr DEPUTY SPEAKER(Mr Leo McLeay) -Order! Mr BEAZLEY —It was a vain attempt, I admit. In another 12 months I will be up to Mick's standard! The substance of this matter has been widely canvassed by the Opposition spokesmen, well beyond the requirements of simply arguing why this should be open to debate. That is fine; I believe that in a motion such as this that is entirely appropriate. However, I will take similar liberties in answering the points that have been made, provided, of course, that I am indulged. Mr DEPUTY SPEAKER —Order! The Minister will keep to the issue before the House in the same way as the previous two speakers. Mr BEAZLEY —I am happy to live with that, Mr Deputy Speaker. The Leader of the Opposition challenged us to table these documents. He asked us why we had not come into the House prepared to do so. He pointed out that the Opposition spokesman was prepared to protect confidentiality, and asked why we did not go ahead and table documents in this Parliament. In all the portfolios I have had-or in at least two of the three I have held-I have considered it necessary, as have most other members of the Government who have held similar portfolios, to keep Opposition members briefed well beyond what should be made publicly available on a wide variety of topics. Obviously in the defence area that goes to matters of national security. That is an accepted position. Occasionally, it has been my experience that I have briefed in areas in which the Opposition spokesman may not agree with me or with the course of action proposed. In those circumstances I would really expect that, when I did that, the Opposition spokesman would not say, `I have received a secret briefing but I do not agree with what the Minister has said, so perhaps the Minister might table the document'. That has never happened to me even though I have given a considerable number of briefings. The second point I would make is that I have had responsibilities exactly along the lines of those of the Minister for Justice (Senator Tate). His responsibilities came originally in the area of Special Minister of State, a portfolio that I once held. It was obvious to me, as Special Minister of State, that, firstly, there were matters I received from time to time on which the Opposition would have to be briefed, and that, secondly, the matters that were considered by the Minister for Justice, then the Special Minister of State, were likely to be of such a nature that to breach the confidentiality further than the proper advice to the Opposition spokesman would have a number of consequences. On some occasions it would imperil a person's rights-a person who had not been formally charged or brought before a court. To reveal that detail publicly would, in a court of public opinion, as opposed to a court of justice, effectively convict that person illegally without a full right of reply. Mr Spender —Do you claim such is the case here? Mr BEAZLEY —I recall some excellent speeches on exactly that sort of subject by the honourable member who is interjecting. A second circumstance in which such matters might arise is when a criminal investigation is proceeding. Naturally one has to argue these matters hypothetically. When a criminal investigation is proceeding it is reasonably proper to report progress in that investigation to Opposition spokesmen, but at the same time to reveal that sort of information would imperil it. Those sorts of considerations-not necessarily those specifically; and I can think of many other nuances to both those propositions-obviously motivated the Minister for Justice in releasing documents to the honourable member for Flinders on the basis on which he did so. That has been a position that has always been respected in this place. It is very understandable that the Minister for Justice would wish to defend that position. The matter of substance which concerns the honourable member for Flinders is whether Senator Tate misled the House. I agree that remarks made by Senator Tate could be construed as meaning that on rereading the material he had not exactly, accurately and to his satisfaction presented his view to the Senate in the way in which he would have wanted. It was not that he told the Senate something different in principle from what he would have said had he tabled the entire document or revealed a copy of it. His point of difficulty was that he had to correct himself on a point of fact related to detail. Historically this occasionally happens to Ministers on both sides of this House. In this case the point of fact related to detail was that he had implied that he had tabled all the actual words before him instead of all the matters of principle. Subsequently he apologised to the Senate for that fact. I would have thought that this debate should be taking place not in this House, but in the Senate. This is why we are a little puzzled as to why the Opposition, which has sought over the last few days to tout the possibility that it would come here and do this Government over on the subject of ministerial responsibility related to former Ministers and on the subject of whether we were still in touch with our base, has not acted. One would have thought that these matters might have attracted a degree of concentration from the Opposition, but nothing has emerged. What has emerged from the Opposition benches is an expression of concern relating to a matter that was debated at length in the Senate yesterday. That is another reason why the Standing Orders should not be suspended to consider these matters here. As is the wont of the Senate, this matter was debated at great length in the Senate yesterday with full opportunities for the relevant Opposition spokesmen to get stuck right into Senator Tate and us on this subject. As is the wont of Government senators, they had a full opportunity to explain themselves at extraordinary length as to why they felt they were not worthy of censure on this occasion. The only unusual feature that I can detect in yesterday's proceedings in the Senate was that the censure motion was not carried. This must be a first for the Senate for some considerable time. I am aware that a number of our Ministers are censured regularly in the Senate. Senator Walsh has experienced that on a few occasions, as has Senator Gareth Evans. Censure motions in the Senate do not come as frequently as they do in the House of Representatives, but they come frequently enough and generally they are carried against the Government. It was unusual that this censure motion was not carried. Even though the Government is in a minority of six or seven, the Senate did not carry the motion of censure. That was a remarkable occurrence in the first instance, as indeed it was in the second instance. Here was a body in which the Government did not have a majority which, when it had the opportunity to deliberate at great length, decided that the Minister was not worthy of censure. For those reasons, this motion should not be carried. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! The time for debate has expired. Question put: That the motion (Mr Reith's) be agreed to. The House divided. (Mr Deputy Speaker-Mr Leo McLeay) Ayes . . . . . . . . . . . 55 Noes . . . . . . . . . . . 74 —— Majority . . . . . . . . . 19 —— Adermann, A. E. Lloyd, B.Aldred, K. J. McArthur, F. S.Andrew, J. N. (Teller) McGauran, P. J.Beale, J. H. MacKellar, M. J. R.Blunt, C. W. Macphee, I. M.Braithwaite, R. A. Miles, C. G.Brown, N. A. Millar, P. C.Burr, M. A. Nehl, G. BCadman, A. G. Peacock, A. S.Cameron, Donald Porter, J. R.Cameron, Ewen Pratt, M. P.Cameron, Ian Prosser, G. D.Carlton, J. J. Reith, P. K.Cobb, M. R. Robinson, IanConnolly, D. M. Rocher, A. C.Cowan, D. B. Ruddock, P. M.Downer, A. J. G. Shack, P. D.Edwards, Harry Shipton, R. F.Fife, W. C. Sinclair, I, McCFischer, Tim Smith, W. L.Fisher, Peter Spender, J. M.Goodluck, B. J. Sullivan, K. J.Hall, Steele Tuckey, C. W.Hawker, D. P. M. Webster, A. P.Hewson, J. R. Wilson, I. B. C.Hicks, N. J. (Teller) Woods, R. L.Hunt, R. J. D. Wooldridge, M. R. L.Katter, R. C. Baldwin, P. J. Howe, B. L.Beazley, K. C. 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 Kerin, 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.Cohen, B. McHugh, J.Courtice, B. W. Martin, S. P.Cross, M. D. Mildren, J. B.Cunningham, B. T. (Teller) Milton, P.Darling, E. E. Morris, AllanDawkins, J. S. Mountford, J. G.Dubois, S. C. O'Keefe, N. PDuffy, 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. DFree, R. V. Sciacca, C.Gayler, J. Scott, J. L.Gear, G. Snow, J. H.Gorman, R. N. J. Snowdon, W. E.Grace, E. L. Staples, P. R.Griffiths, A. G. Theophanous, A. C.Hand, G. L. Tickner, R. E.Harvey, E. R. West, S. J.Holding, A. C. Willis, R.Hollis, C. Wright, K. W. Halverson, R. G. Kerr, D. J. C.Dobie, J. D. M. Hayden, W. G.Jull, D. F. Morris, Peter Question so resolved in the negative. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General) —Mr Deputy Speaker, I seek your indulgence to say that yesterday the honourable member for Flinders (Mr Reith) asked me a question as to whether I was aware of an Australian Federal Police minute dated April 1985 in which a Federal Police officer claimed that there had been political interference during proceedings against Tina Wong. The honourable member also asked what investigations had been conducted into the allegation of political interference. I repeat that I was not aware of that matter until the honourable member raised the issue. I have had inquiries made. I now table a minute paper by Australian Federal Police Detective Senior Constable Hely, dated 10 April 1985, in which that matter is adverted to. Because of that and the second part of the honourable member's question, I have had a further report from Mr Lamb, Assistant Commissioner for Police, dated today, related to that second aspect of the question as to the investigation. I table that matter. Mr BEAZLEY(Swan-Leader of the House) —In accordance with the resolution of the House, papers are tabled as listed on the schedule circulated to honourable members earlier today. Details of papers will be recorded in Hansard and the Votes and Proceedings. The schedule read as follows- 1. Federal Airports By-laws-section 72 of the Federal Airports Corporation Act 1986. 2. Australian Broadcasting Corporation-Annual Report 1986-87-together with the Auditor-General's Report-section 72 of the Australian Broadcasting Corporation Act 1983 and section 63m of the Audit Act 1901. 3. Victorian Grants Commission-Annual Report 1986-87-section 13 of the Local Government (Financial Assistance) Act 1986. 4. Western Australian Local Government Grants Commission-Annual Report 1986-87-section 13 of the Local Government (Financial Assistance) Act 1986. 5. Poultry Industry Assistance Act 1965-Annual Report;1986-87-section 8 of the Poultry Industry Assistance Act 1965. 6. Snowy Mountains Hydro-electric Authority-Annual Report 1986-87-together with the Auditor-General's Report-section 26 of the Snowy Mountains Hydro-Electric Power Act 1949 and section 63h of the Audit Act 1901. Motion (by Mr Beazley) proposed: That the House take note of the paper. Debate (on motion by Mr Fife) adjourned. Mr SPENDER(North Sydney) —I want to raise a question under standing order 152, which relates to the administration of the Chair. We have had a very contentious debate in which a great number of points of order were taken. It is, of course, greatly important to this House that the Chair be, and appear to be, impartial. I noticed that, after the honourable member for Flinders (Mr Reith) had been speaking for some two minutes in the last debate, the Leader of the House (Mr Beazley) approached you, Mr Deputy Speaker, and had a discussion with you on some matter. Of course, we do not know what that matter was. I ask whether it is correct procedure, given such a contentious situation, for a private conversation to be had between the Leader of the House, who had been buffeted around on a number of points of order, and the Deputy Speaker, who may be having to rule on points of order shortly to arise. Mr DEPUTY SPEAKER(Mr Leo McLeay) —Order! I have just had a look at standing order 152. The method by which I understand that standing order is used is to ask the Speaker, who is the administrative head of a number of parliamentary departments, questions relating to the administration of those parliamentary departments. I do not recall that standing order being used to ask questions of the Speaker relating to private conversations the Speaker or anyone else in the Chair may or may not have heard from what was raised by other members. I do not think it would be appropriate that I should reveal conversations that honourable members from either side of the House have with the Chair in the course of the business of the House. As to the particular matter to which the honourable member refers, I do not think I actually heard what the Leader of the House said because I was quite busy listening to the honourable member for Flinders. Mr SPENDER —I see. So you did not hear what he had to say to you, Mr Deputy Speaker? Mr DEPUTY SPEAKER —I said that I do not recall it. Mr Beazley —I ask what the honourable member-- Mr DEPUTY SPEAKER —Order! The Leader of the House will resume his seat. Having said all that, I do not believe that that standing order is the appropriate mechanism by which to raise a question such as the one the honourable member for North Sydney has raised. Mr SPENDER —Since the Leader of the House was going to give an explanation, perhaps you could give him the indulgence to give an explanation, Mr Deputy Speaker, and at the same time advise him of the care he needs to exercise in approaching the Chair during a contentious debate such as the one that took place. Mr DEPUTY SPEAKER —I find that the honourable member would be putting an encumbrance upon all other members if he suggested at any time that the Chair should not be willing to listen to what other members of the House have to say, either in private, sometimes during debate or in the course of events. I can give the honourable member an undertaking that I will listen to what honourable members on his side of the House say and what Government members have to say either during a debate or when they come to advise the Chair of matters they may wish to raise in personal explanations or at other times. I do not think that we should circumscribe the rights of honourable members in such a way as the honourable member for North Sydney is asking. As to giving the Leader of the House indulgence, I think we have got ourselves into enough trouble with indulgences today. Mr Peacock —That is a reflection on the Chair. Mr DEPUTY SPEAKER —Order! I take the point that was raised by the Deputy Leader of the Opposition. What I said cannot and should not be construed in any way as being a reflection upon anybody. The Clerk —Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers: To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth: We most strongly oppose the process of Food Irradiation by radioactive Cobalt 60 or any other radioactive substance. We oppose the introduction of regulations that will facilitate the food irradiation process by State Governments. We express our deep concern at this attempt to extend the use of radioactive substances and exposure of workers to radiation. We call on the Government to immediately ban the importation of radioactive Cobalt 60 or other radioactive substances and to immediately disallow the regulations that permit the irradiation of food here in Australia. by Mr Beale,Dr Blewett and Mr Milton. To the Honourable the Speaker and Members of the House of Representatives, in Parliament assembled. The petition of the undersigned respectfully showeth that there is widespread concern by farmers and consumers about the proposal to irradiate food in Australia. Your petitioners most humbly pray that the House of Representatives in Parliament assembled, should: (1) Block the introduction of food irradiation into Australia; (2) Ban the import of Cobalt-60 and Caesium-137 and Caesium-134 to be used to irradiate food products; (3) Ban the import of all machinery used for food irradiation (Electron Beam, X-ray, etc.); (4) Ban the importation and sale of irradiated food in Australia. And your petitioners, as in duty bound, will ever pray. by Dr Blewett. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth: The irradiation of food by any means degrades the nutritional value of food and is potentially harmful to the health of all consumers and to the environment. Your Petitioners therefore humbly pray that your Honourable House: 1. Withdraw from the Asian Regional Co-operative Project on Food Irradiation and from the International Consultative Group on Food Irradiation. 2. Take all possible steps to prevent and disallow the irradiation of food in Australia. 3. Ban the export and importation of irradiated foods and animal feeds. 4. Take steps to obtain a testing device to make possible the identification of irradiated foods, as soon as one becomes available. And your petitioners, as in duty bound, will ever pray. by Mr Scott. To the Honourable the Speaker and Members of Parliament assembled. We the undersigned citizens, respectfully showeth: 1. That we are totally opposed to the Government's discriminatory Anti-Smoking legislation in the workplace bans and on Domestic Airline travel. 2. Note that so-called Environmental Tobacco smoke has not been proved as a major pollutant either in the workplace or on aircraft. 3. This legislation will discriminate against thirty per cent of the citizens of Australia, and 4. Call upon the Government to lift all bans and not proceed with any discriminatory smoking legislation. And your petitioners, as in duty bound, will ever pray. by Mr Beale. 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 action to ban smoking on domestic aircraft. 2. That this regulation will discriminate against 30% of the adult population who smoke and who, due to the tobacco taxes paid, are the highest taxed people in the country. 3. That the government is being hypocritical by allowing smoking on V.I.P. flights while denying this to the general populace. Your petitioners therefore call upon the Government to lift the regulation banning smoking on domestic aircraft and request that they do not proceed with any further anti-smoking legislation. And your petitioners, as in duty bound, will ever pray. by Dr Blewett. To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of the electorate of Hume respectfully showeth that: The introduction of time-charging for local telephone calls by Telecom Australia would seriously disadvantage thousands of elderly and disabled people and families, and would add a further burden to the already prohibitive cost of living borne by every Australian. Your Petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to reject out of hand any plans by Telecom to time-charge local telephone calls and prevent the Australian people from being seriously affected by yet another ludicrous charge. And your petitioners, as in duty bound, will ever pray. by Mr Fife and Mr Moore. To the Honourable the Speaker and Members of the House of Representatives assembled in Parliament. The petition of certain electors of the Division of Hinkler draws to the attention of the House: 1. the opposition to the proposal of Telecom to time-charge local telephone calls; 2. the belief that time-charging of local telephone call will cause distress for the elderly, pensioners and Community Service agencies. Your petitioners therefore pray that the Government should reject any proposal for time-charging of local calls. by Mr Courtice. To the Honourable the Speaker and the Members of the House of Representatives in Parliament assembled. The petition of the undersigned shows that: There is widespread concern at the increasing breakdown of public order in the A.C.T. This breakdown is shown by the recent increase in reports of violent assault, one of which concerned the tragic death of a young man at a school fete. The involvement of groups of youths in some of these assaults causes particular concern. Such behaviour is affected by the ready availability, to young people, of alcohol and video and films which depict extreme violence. Your petitioners therefore ask the Parliament to make unlawful the creation of a public nuisance by loitering; ensure the enforcement of laws which prohibit the public consumption of alcohol by under-age persons, and legislate to restrict the production, distribution and sale of material which depicts extreme violence. by Mr Beale. To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned shows that the petitioners are concerned that the Minister for Health proposes to delete from the Medical Benefits Schedule those item numbers covering the treatment of sun-damaged skin and warts by specialists. They fear that those patients suffering chronically from these problems cannot always be treated successfully by a general practitioner. They protest that they will be financially disadvantaged. They also realise that their problems require early detection and expert treatment, if the petitioners are not to be exposed to increased risk of skin and other cancers. Your petitioners request that the House of Representatives, in Parliament assembled, should recognise our concern and permit the abovementioned items in the medical schedule to be reinstated. And your petitioners, as in duty bound, will ever pray. by Dr Blewett. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned shows that recent changes and further planned changes to Social Security Benefits payments will unduly prejudice and unfairly discriminate against certain members of the Australian community least able to cope with further financial loss. Your petitioners request that the House of Representatives in Parliament assembled should: (i) restore the Supporting Parent's Benefit and the Widow's A Pension to parents whose youngest child is both aged between 16 and 24 and is a full-time student: and restore the Class B Widow's Pension; and (ii) pay the full Family Allowance Supplement to all Australian Social Security Beneficiaries with dependent children in addition to their existing entitlements; and (iii) that student allowances and conditions at least equivalent to those available before the changes in October 1986 be re-introduced for those sole parents who desire to further their education. by Dr Blewett. 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 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 km 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. We, the undersigned citizens, respectfully showeth: that we are totally opposed to any suggestion that a time charging system be introduced for local telephone calls. The proposal is anti-community and will disadvantage the aged and the disabled who depend on the telephone. Your petitioners humbly pray that the Government will recognise the inequity of the proposal and will advise the Australian Telecommunications Commission not to proceed with the proposal to introduce time charging on local calls. And your petitioners, as in duty bound, will ever pray. by Mr Downer. To the Honourable The Speaker and the Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens respectfully showeth that your petitioners are gravely concerned at the failure of the government to honour its election promises to pensioners. In particular those promises relate to the following commitments: 1. That within three years of its election to office, a Hawke Labor Government would raise the level of the standard pension to 25% of Average Weekly Earnings; 2. That the lag time between the announcement of the Consumer Price Index figures and the subsequent adjustment of pensions would be reduced to one month, and 3. That the disproportionate tax burden borne by low income earners would be lifted. None of these promises has been honoured to date. Your petitioners are extremely angry at the failure of the Government to live up to its commitments and as in duty bound will every pray that these serious omissions will be given the attention they deserve. by Mr Hawker. 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 Miles. 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 Miles. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia shows: Our objections to local calls being metered as it will cause inconvenience and added expense to Incapacitated people, the blind, Lifeline, family services, emergency services, pensioners etc. Your petitioners humbly pray that the House of Representatives, in Parliament assembled, urge the Government to please leave local calls as they now stand and penalize those who are exploiting the system. And your petitioners, as in duty bound, will ever pray. by Mr Millar. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens respectfully showeth: That we are strongly opposed to the proposal for metering of local telephone calls by Telecom since- (i) higher phone bills would add more pressure to the family budget, and some would not be able to pay them; (ii) elderly, sick and lonely people, many of whom are pensioners, rely on the telephone as their communication with the outside world. We therefore request the House to give this matter a lot more thought before acting on the proposal. And your petitioners, as in duty bound, will ever pray. by Mrs Sullivan. To the Honourable the Speaker of the House of Representatives assembled in the Parliament: we the residents of the Division of Dobell draw to the attention of the House the fact that recipients of Social Security and Veteran's Affairs pensions are required to pay income tax once non-pension income exceeds $3.72 per week. Your petitioners request that Parliament increase the Income Tax Pensioner Rebate for Social Security and Veteran's Affairs pensioners. by Mr Lee. To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of certain citizens of Queensland, Australia, respectfully showeth that we are totally opposed to any change in the Australian National Flag as declared in the Flags Act (1953). Your petitioners humbly pray that Parliament in its wisdom will take no action to change the Australian National Flag. And your petitioners, as in duty bound, will ever pray. by Mr Millar. Petitions received. Mr DEPUTY SPEAKER(Mr Leo McLeay) -Madam Speaker has received a letter from the honourable member for Bradfield (Mr Connolly) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The growing community concern resulting in early retirements due to the Government's failure to clarify its intentions regarding superannuation changes. 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- Motion (by Mr Beazley) put: That the business of the day be called on. The House divided. (Mr Deputy Speaker-Mr Leo McLeay) Ayes . . . . . . . . . . . 71 Noes . . . . . . . . . . . 54 —— Majority . . . . . . . . . 17 —— Baldwin, P. J. Jakobsen, C. A.Beazley, K. C. Jenkins, H. A.Beddall, D. P. Johns, G. T.Bilney, G. N. Jones, BarryBlanchard, C. A. Kelly, R. J.Blewett, N. Kent, L.Bowen, Lionel Kerin, J. C.Brown, Robert Klugman, R. E.Brumby, J. M. Lamb, A. H. (Teller)Campbell, G. Langmore, J. V.Charles, D. E. Lavarch, M. H.Charlesworth, R. I. Lee, M. J.Chynoweth, R. L. Lindsay, E. J.Cleeland, P. R. McHugh, J.Courtice, B. W. 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'Keefe, N. P.Duncan, P. O'Neil, L. R. T.Edwards, Ronald Price. L. R. S.Fatin, W. F. Punch, G. F.Fitzgibbon, E. J. Saunderson, J.Free, R. V. Scholes, G. G. D.Gayler, J. Sciacca, C.Gear, G. Scott. J. L.Gorman, R. N. J. Snow, J. H.Grace, E. L. Snowdon. W. E.Griffiths, A. G. Staples, P. R.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. Wright, K. W.Humphreys, B. C. Adermann, A. E. Katter, R. C.Aldred, K. J. Lloyd, B.Andrew, J. N. (Teller) McArthur, F. S.Beale, J. H. McGauran, P. J.Blunt, C. W. MacKellar, M. J. R.Braithwaite, R. A. Miles, C. G.Brown, N. A. Millar, P. C.Burr, M. A. Nehl, G. B.Cadman, A. G. Peacock, A. S.Cameron, Donald Porter, J. R.Cameron, Ewen Pratt, M. P.Cameron, Ian Prosser, G. D.Carlton, J. J. Reith, P. K.Cobb, M. R. Robinson, IanConnolly, D. M. Rocher, A. C.Cowan, D. B. Ruddock, P. M.Downer, A. J. G. Shack, P. D.Edwards, Harry Shipton, R. F.Fife, W. C. Sinclair, I. McC.Fischer, Tim Smith, W. L.Fisher, Peter Spender, J. M.Goodluck, B. J. Sullivan, K. J.Hall, Steele Tuckey, C. W.Hawker, D. P. M. Webster, A. P.Hewson, J. R. Wilson, I. B. C.Hicks, N. J. (Teller) Woods. R. L.Hunt, R. J. D Wooldridge, M. R. L. Kerr, D. J. C. Halverson, R. G.Hayden, W. G. Dobie, J. D. M.Morris, Peter, Jull, D. F. Question so resolved in the affirmative. Dairy Produce Levy (No. 1) Bill Bill presented by Mr Kerin, and read a first time. Mr KERIN(Werriwa-Minister for Primary Industries and Energy)(4.35) —I move: That the Bill be now read a second time. The purpose of this Bill is to remove an inequity in the imposition of levy on dairy products and to streamline the administration by the Australian Dairy Corporation (ADC) of the dairy product levy system. The Dairy Produce Levy (No. 1) Act 1986-the Act-provides for the imposition of levy on dairy products that have been produced at a factory on or after 1 July 1986. The levy is payable by dairy manufacturers upon the sale of specified dairy products, currently butter and cheese, to fund supplementary market support of the dairy product export sector over and above the primary market support funded by the all milk levy. As the levy is intended to support domestic prices, a person who exports butter or cheese may seek an exemption from payment of the levy. Subject to certain limitations these arrangements also apply to butter and cheese contained in mixtures which are exported. Exemptions are issued by the ADC. The arrangements reflect those which operated under the old dairy arrangements, the stabilisation levy on major dairy products operating prior to 1 July 1986-where consignments of mixtures for export under 15 tonnes weight, one container load, and mixtures with less than 25 per cent dairy product content were not eligible for exemption. The intention of these limits was to avoid the need to process small consignments, or consignments involving only minimal dairy product content, which would involve disproportionately high administrative costs with little benefit to the exporter. When the new arrangements commenced, in order to be consistent with the market support element the limit on refund of levy relating to minimum percentage of leviable product in mixtures, as set down in sub-section 9 (3) and prescribed in sub-section 9 (4) of the Act, was reduced to one per cent. However, the minimum weight of 15 tonnes per consignment was retained through sub-sections 9 (3) and 9 (4) of the Act as it was thought that the administrative costs relating to applications for consignments of less than one container load would be prohibitive. The ADC has since indicated that, in fact, the cost of administering the minimum weight limit outweighs the benefit derived from the exclusion. In addition, the limit discriminates against a manufacturer who exports a large amount of butter or cheese in a small consignment compared with one who exports small amounts in large consignments. The Government has decided to accept the ADC recommendations that the situation be remedied by deleting sub-sections 9 (3) and 9 (4) of the Act to eliminate the weight and dairy produce content constraints. The result will be that any amount of butter and cheese exported in a mixture will qualify for levy exemption. The amendment will apply from 1 July 1986 to put all applicants on an equal basis from the commencement of the new dairy marketing arrangements. Retrospectivity will also validate some exemptions which the ADC has already given but which would on a strict interpretation be inconsistent with the existing provisions of sub-sections 9 (3) and 9 (4) although not inconsistent with the intention of this amendment. The amendment will result in savings in administration costs to the Australian Dairy Corporation and hence to the dairy industry at large and it will place the payment of levy on dairy products on a more equitable basis. It will have no financial implications for the Commonwealth. I commend the Bill to honourable members and I present the explanatory memorandum to this Bill. Debate (on motion by Mr Tim Fischer) adjourned. Bill presented by Mr Kerin, and read a first time. Mr KERIN(Werriwa-Minister for Primary Industries and Energy)(4.39) —I move: That the Bill be now read a second time. The purpose of this Bill is to amend the Export Inspection (Service Charge) Act 1985 to remove limitations on the imposition of charge for export inspection services performed outside export registered establishments. The Export Inspection (Service Charge) Act 1985 is one of three Acts introduced by the Government to give as much flexibility as possible in determining appropriate export inspection charging systems for different sectors of the primary produce export industry-the other Acts are the Export Inspection (Quantity Charge) Act 1985 and the Export Inspection (Establishment Registration Charges) Act 1985. At the time the Act was introduced most export inspection was carried out in establishments that were registered for the preparation of goods for export. Increasingly, export inspection services are being performed at places outside export registered establishments in response to requests by persons who are not occupiers of registered establishments. In many cases inspection is not for the purpose of enforcing Australian export controls but to facilitate exports by providing certification required by the importing country. The registration of these places would be wasteful and would place an unnecessary burden on industry. Consequently the Government believes further flexibility is needed to permit effective cost recovery for these services while ensuring that industry is not burdened with unnecessary legislative requirements. The Bill amends those provisions of the Export Inspection (Service Charge) Act 1985 which prevent the imposition of charge for export inspection services provided in places which are not registered export establishments. The Bill will have only a minor financial impact, as any charge imposed will in the main replace cost recovery measures that currently apply. I present the explanatory memorandum to this Bill and commend the Bill to honourable members. Debate (on motion by Mr Tim Fischer) adjourned. Bill presented by Mr Kerin, and read a first time. Mr KERIN(Werriwa-Minister for Primary Industries and Energy)(4.42) —I move: That the Bill be now read a second time. The principal purpose of this Bill is to revise the definition of `prescribed commodity' to allow charges to be imposed for the export inspection of fruit, vegetables, live animals and animal reproductive material. The changes will enable effective cost recovery measures to be implemented for all export inspection, consistent with the Government's cost recovery policy. The Bill also amends the provisions of the Export Inspection Charges Collection Act 1985 to enable charges to be collected for export inspection services performed at places which are not registered export establishments. These amendments complement the amendments to the Export Inspection (Service Charge) Act 1985 which are included in the Export Inspection (Service Charge) Amendment Bill 1988. An explanation of this initiative is given in the second reading speech on the Export Inspection (Service Charge) Amendment Bill 1987. The Bill will have only a very minor financial impact, as charges collected will replace cost recovery measures that currently apply. I present the explanatory memorandum to this Bill and commend the Bill to honourable members. Debate (on motion by Mr Tim Fischer) adjourned. Bill presented by Mr Duffy, and read a first time. Mr DUFFY(Holt-Minister for Trade Negotiations and Acting Minister for Foreign Affairs and Trade)(4.44) —I move: That the Bill be now read a second time. This Bill will amend both the Diplomatic Privileges and Immunities Act 1967 and the Consular Privileges and Immunities Act 1972 which give legislative effect to the provisions of the 1961 Vienna Convention on Diplomatic Relations and the 1963 Vienna Convention on Consular Relations respectively. The Bill provides that tax imposed under any of the various sales tax Acts is not payable in respect of goods intended for the official use, and not resale, of a diplomatic mission or consular post of a prescribed overseas country provided the goods are purchased from a registered sales tax payer. These amendments have become necessary due to increasing criticism which Australia has received in relation to our interpretation of particular provisions of the two Vienna Conventions. Under those conventions the personnel at foreign missions and posts are exempt from direct taxes but must pay indirect taxes of a kind which are normally incorporated in the price of goods or services. The Government has consistently maintained that the Australian sales tax system is, due to its manner of operation, an indirect tax and as such is payable by foreign missions and posts. However, the Government also takes the view that the sales tax and value added tax systems operated by the United States of America and certain western European countries are direct taxes from which Australian personnel are exempt. This interpretation has been disputed and on a number of occasions other countries have sought to collect sales and value added tax not only from Australian personnel but also from missions and posts. In order to maintain our exemption overseas it may, therefore, be necessary while maintaining our interpretation of the Conventions to grant certain countries exemption from Australian sales tax in respect of their official purchases. At the present time it is not possible to accurately determine the financial impact of these amendments. However, it is the Government's intention that a foreign state will be proclaimed a prescribed overseas country only where Australia is receiving a reciprocal exemption from sales or value added tax and where the cost of providing sales tax exemption in Australia is outweighed by the financial benefits of such reciprocal exemption. Therefore, the Bill is not expected to have an adverse effect on Government finances. I commend the Bill to the House and I present the explanatory memorandum to this Bill. Debate (on motion by Mr Tim Fischer) adjourned. Bill presented by Mr Barry Jones, and read a first time. Mr BARRY JONES(Lalor-Minister for Science, Customs and Small Business)(4.48) —I move: That the Bill be now read a second time. This Bill proposes to amend the Customs Tariff (Uranium Concentrate Export Duty) Act 1980, to incorporate into that Act the tariff proposal tabled in the House of Representatives on 15 September 1987. As part of the 1987-88 Budget, the proposal increased the export duty on uranium concentrate produced from the Alligator Rivers Region in the Northern Territory from 80c to $1.02 per kilogram as from 15 September 1987. This export duty, which has been imposed on uranium since 1980, is to partially offset the special costs of environmental monitoring and research activities by the Office of the Supervising Scientist associated with uranium mining operations in the Alligator Rivers Region. The increase in the duty proposed in this Bill will recover about 75 per cent of those costs. The Office of the Supervising Scientist was created in recognition of the special need to protect the environment of the Alligator Rivers Region, an area of great beauty and world-wide environmental significance, from the effects of uranium mining operations both in the short and the long term. To this end, the Office of the Supervising Scientist has, amongst other things, conducted significant research on uranium tailings management, including the conduct of geomorphological studies to provide the information necessary to ensure that radioactive tailings can be contained or isolated from that environment for thousands of years. The office also monitors the effects of radiation exposure on workers involved with uranium mining, as well as on people living in the Alligator Rivers Region, and is developing strategies for the revegetation of decommissioned mine sites, so that the long-term rehabilitation of the habitat of surrounding mining areas can be planned. The Government's continued commitment to the Office of the Supervising Scientist will ensure that the Alligator Rivers area, which includes the Kakadu National Park, is fully protected from any possible effects of uranium mining operations. Clause 4 of the Bill provides an exemption from the increased levy in the standard transitional situations where uranium concentrate was loaded on to a vessel, or was part of a consignment, the loading of which commenced prior to 15 September 1987-the commencement date of this Bill. Financial Impact Statement The proposed increased duty is expected to raise an additional $0.6m during that part of the 1987-88 financial year to which it applies, and an additional $0.9m in a full year. At the proposed new rate, the total uranium export levy is expected to raise $3.7m in the 1987-88 financial year and $4m in a full year. The proposed levy will now recover approximately 75 per cent of the annual cost of the uranium related monitoring and research activities of the Office of the Supervising Scientist for the Alligator Rivers Region. I commend the Bill to honourable members and present the explanatory memorandum to the Bill. Debate (on motion of Mr Tim Fischer) adjourned. Debate resumed. Dr WOOLDRIDGE(Chisholm)(4.52) —In speaking to the amendment that this House condemn the Government, I wish to speak on two particular points: that this House condemns the Government for placing Australian Airlines at a $4.9m per year competitive disadvantage with its major competitor, Ansett Airlines of Australia, and that this House condemns the Government for its complete failure to openly announce its intention to privatise Australian Airlines. The amount of $4.9m may not seem great; however, in a situation where Australian Airlines is already significantly hampered, it is a further competitive disadvantage to this company. What constraints exist on Australian Airlines? They are many. If one examines the corporate structure of Ansett Airlines and Australian Airlines, one notes that Ansett is a company that owns airline passenger, airline freight, road passenger and road freight services; general trading, manufacturing, hotel, resort and restaurant operations, insurance interests, furniture removal and furniture storage subsidiaries, and has other associated company investments. When one compares that with Australian Airlines, one notes it has very narrow diversification: passenger service, airline freight service, Hertz Rent-a-Car and two tourist resorts. What other constraints exist? Within the network that feeds the airlines, Ansett Transport Industries (Operations) has Air Western Australia; Air New South Wales; Skywest, New South Wales; Skywest, Western Australia; Kendall Airlines; and Lloyd Airlines; and, through its parent company, owns Bodas, which operates Aeropelican. What did Australian Airlines do? It bought Air Queensland for $9m two years ago, which went broke and closed down. What other constraints exist? There are government constraints on Australian Airlines that inhibit its capacity to function adequately in the marketplace, constraints whereby it needs to receive Australian Loan Council approval for major equipment purchases; constraints whereby the Government has discretion to alter profit objectives; constraints whereby, being an Australian Federal organisation, it does not have access to intrastate routes; constraints whereby remuneration of board members can be influenced by tribunals; and constraints whereby broader government policies on industrial relations may hamper the airline's operations. I give an example from the Caucus discussion paper of the Minister for Transport and Communications (Senator Gareth Evans), in which he said how Australian Airlines is hampered by industrial relations considerations. During lengthy industrial disputes Ansett has achieved an earlier return to work while Australian Airlines has awaited government approval for a settlement. The negotiating status of airline management is diminishing through unions' knowledge that government approval is required. Administrative arrangements reinforce the Public Service image of the airline and, most importantly, they restrict the ability of the airline management to respond directly to industrial disputes. What further constraints already exist on Australian Airlines? The board of directors is one of the most glaring examples of the differences between the two companies. Ansett Airlines has 11 directors with an average length of service of 9.2 years. There are seven alternates who may stand for individual board members. They have an average length of service of 6.1 years. Of the alternates, five out of seven have a strong background in transport or aviation. Nine out of 11 directors have an strong background in transport or aviation. That is a very experienced and successful board. What does Australian Airlines have to compete with? It has nine government appointees for a period of five years. The average length of service is 3.8 years. Only three have any experience in business and only one has any experience in transport or aviation. What other constraints already exist? There are constraints on efficiency. The most recent data we have on that comes from the Government's own inquiry, the May Independent Review of Economic Regulation of Domestic Aviation. An appendix to that inquiry's report is the report of the firm of accountants, Travers Morgan, which was asked to study the relative efficiency of the two airlines, one a government operation and the other a private operation. That report is very telling. The company examined five measures of efficiency. In only one did Australian Airlines come out on top. In aircraft utilisation, Australian Airlines had to use its aircraft more, but perhaps only because it was strapped for cash. In unit cost-that is, cost per passenger kilometre-Australian Airlines cost 10.5 per cent more than Ansett for any given length of flight. In passenger revenue yield-that is, the revenue per passenger kilometre-Australian Airlines was 15 per cent down on Ansett. It got 15 per cent less revenue per kilometre. In labour productivity, Australian Airlines was 8 per cent down. In profitability-that is, the return on assets-Ansett's was 9 per cent and Australian Airlines was 5.1 per cent-76 per cent down. Mr Deputy Speaker, I wish to address some of the comments that some of the previous speakers have made. The honourable member for Aston (Mr Saunderson) made five points, to which I which to allude. He said, firstly, it was strange that the Opposition was not letting Australian Airlines pay its way in its superannuation liabilities. It is really very simple. It is not a matter of not letting it pay its way; it is a matter of not allowing another competitive disadvantage to affect an airline that is already struggling to compete. It is not $4.9m once-off; it is this amount of money for every year to come. Secondly, the honourable member seemed to think incorporation would solve the problems. Yet, according the Minister's own documents, incorporation will still not remove the controls or solve the capital requirements of the airline. Thirdly, the honourable member for Aston said there was nothing logical to suggest that a public company is less efficient than a private company. I suggest he read something other than his Labor Party briefing notes. David Davies from the Duke University, Peter Forsyth from the University of New South Wales, Richard Hocking from the University of Melbourne, Michael Kirby and Robert Albon from the Australian National University, have written extensively on this subject for the last 18 years in the Economic Record and United States Journal of Law and Economics. Everyone studying Australia's two airlines has come to exactly the same conclusion: other things being equal-which they are in the case of the two airlines, running the same routes with the same fares-a private company is more efficient than a public company. This is backed up by the May report. The fourth point raised by the honourable member for Aston was a criticism of the previous Government for not injecting capital into Australian Airlines. He looks at the issue very superficially. The originally capital injection of $15m in 1961 was considered adequate at the time. Subsequent to that, Australian Airlines met its requirements through borrowings. It had no trouble with Loan Council requirements. It was only in the very late 1970s that this became a disadvantage and an inquiry was set up by the Fraser Government to look at the capital requirements of Australian Airlines. When that reported in 1982 a further $25m was injected as an interim measure. This is quite important. The report of the Department of Aviation for the year 1983 says very clearly that in December 1982 the then Government approved an interim increase in Trans Australian Airlines capital of $25m. The honourable member for Aston seems to be heartily congratulating his Government on injecting a further $90m eight weeks after it went into government. All that was said in his own Party's policy at that time was that it would review airline capital requirements. If he really suggests that anything more than the Minister's name on the letterhead was changed and that the full results of that inquiry were carried through eight weeks before the decision was made, he is kidding himself. If capital injection was such a vitally important issue, why did Australian Airlines itself not make any reference to it in its submission to the May committee? It was the May committee, not Australian Airlines, that brought up the issue of capital injection. The history of capital injection into Australian Airlines was very proper until the late 1970s, when the circumstances changed and the appropriate measures were taken. Criticism of the previous Government is quite irrelevant. I note that nothing was done in the period of the Whitlam Government. The honourable member for Aston in his fifth point cited page 62 of the May report as supporting his argument as to why Australian Airlines should remain under Government control. I have with me one volume of the May report. It is a 1,000 page document. The honourable member for Aston has picked out three lines, made in passing, in a paragraph of a chapter dealing with policy options. This paragraph is couched in such terms as `it may', `assume', and `be more reasonable' and follows a statement that `it is unlikely that Australian would force Ansett out of the market'. If the honourable member looks again at his Minister's own Caucus document he will see that his own Minister has stated that `public ownership provides an absolute guarantee against the emergence of a private monopoly; however, the same outcome can be assured by making Australian a viable competitor and subjecting the industry to the application of the Trade Practices Act'. If all the honourable member for Aston can do to support his argument is to take three lines in this document out of context, he has a very weak argument. The honourable member for Chifley (Mr Price) made several points. He talked at length of the history of the airline agreement. I found it very interesting to learn what was happening here when my father was finishing high school, but I am afraid that I do not see the point. All the legislation that he talked about, in his own words, to remove competitive advantage, is not as he painted it. It is quite reasonable in an industry which has barriers to entry for government to ensure that new competitors can enter that field. Because of the enormous capital requirements of any entry into the airline industry, again it is a reasonable role for government to ensure that barriers to entry do not stop other players. Secondly, a government-owned organisation may very well have unfair competitive advantages. It is a reasonable role for government to ensure that those unfair competitive advantages do not stifle new industry. It was a very appropriate policy 35 years ago; it is not an appropriate policy now. The policies of the Opposition, when implemented in government, will free up the airline industry so that that competition is appropriate for the 1990s. The honourable member for Chifley was very good in looking back 35 years. I prefer to look to the future, not to the past. If Australian Airlines is not to remain a second rate irrelevancy, it will need to be privatised, allowed access to cash, and allowed access to the competition that a private firm would give it. Mrs KELLY(Canberra-Minister for Defence Science and Personnel)(5.04) —In speaking on behalf of Minister Holding, I do not want to make many comments. Mr Beale —It was actually Minister Staples. Mrs KELLY —I know, but Minister Holding is the responsible Minister. I just take this opportunity to thank the Opposition for supporting this legislation. Many of the points that have been raised in this debate do not relate specifically to the text of the legislation before the House. Mr Beale —But they do to the amendment. Mrs KELLY —They do, indeed, to the amendment. Many of the matters raised relate to wider issues concerning the corporate funding of Australian Airlines. Rather than holding up the processes of the House, I think we should now proceed to putting the question. Question put: That the words proposed to be omitted (Mr Beale's amendment) stand part of the question. The House divided. (Mr Deputy Speaker-Mr C. A. Blanchard) Ayes . . . . . . . . . . . 73 Noes . . . . . . . . . . . 54 —— Majority . . . . . . . . . 19 —— Baldwin, P. J. Jenkins, H. A.Beazley, K. C. Johns, G. T.Beddall, D. P. Jones, BarryBilney, G. N. Kelly, R. J.Blewett, N. Kent, L.Bowen, Lionel Kerin, J. C.Brown, Robert Klugman, R. E.Brumby, J. M. Lamb, A. H. (Teller)Campbell, G. Langmore, J. V.Charles, D. E. Lavarch, M. H.Charlesworth, R. I. Lee, M. J.Chynoweth, R. L. Lindsay, E. J.Cleeland, P. R. McHugh, J.Cohen, B. McLeay, LeoCourtice, B. W. Martin, S. P.Crawford, M. C. Mildren, J. B.Cross, M. D. Milton, P.Cunningham, B. T. (Teller) Morris, AllanDarling, E. E. Mountford, J. G.Dubois, S. C. O'Keefe, N. P.Duffy, M. J. O'Neil, L. R. T.Duncan, P. Price, L. R. S.Edwards, Ronald Punch, G. F.Fatin, W. F. Saunderson, J.Fitzgibbon, E. J. Scholes, G. G. D.Free, R. V. Sciacca, C.Gayler, J. Scott, J. L.Gear, G. Snow, J. H.Grace, E. L. Snowdon, W. E.Griffiths, A. G. Staples, P. R.Hand, G. L. Theophanous, A. C.Harvey, E. R. Tickner, R. E.Holding, A. C. Uren, T.Hollis, C. West, S. J.Howe, B. L. Willis, R.Humphreys, B. C. Wright, K. W.Jakobsen, C. A. Adermann, A. E. Katter, R. C.Aldred, K. J. Lloyd, B.Andrew, J. N. (Teller) McArthur, F. S.Beale, J. H. McGauran, P. J.Blunt, C. W. MacKellar, M. J. R.Braithwaite, R. A. Miles, C. G.Brown, N. A. Millar, P. C.Burr, M. A. Nehl, G. B.Cadman, A. G. Peacock, A. S.Cameron, Donald Porter, J. R.Cameron, Ewen Pratt, M. P.Cameron, Ian Prosser, G. D.Carlton, J. J. Reith, P. K.Cobb, M. R. Robinson, IanConnolly, D. M. Rocher, A. C.Cowan, D. B. Ruddock, P. M.Downer, A. J. G. Shack, P. D.Edwards, Harry Shipton, R. F.Fife, W. C. Sinclair, I. McC.Fischer, Tim Smith, W. L.Fisher, Peter Spender, J. M.Goodluck, B. J. Sullivan, K. J.Hall, Steele Tuckey, C. W.Hawker, D. P. M. Webster, A. P.Hewson, J. R. Wilson, I. B. C.Hicks, N. J. (Teller) Woods, R. L.Hunt, R. J. D. Wooldridge, M. R. L. Kerr, D. J. C. Halverson, R. G.Hayden, W. G. Dobie, J. D. M.Morris, Peter Jull, D. F. Question so resolved in the affirmative. Amendment negatived. Original question resolved in the affirmative. Bill read a second time. Leave granted for third reading to be moved forthwith. Bill (on motion by Mrs Kelly) read a third time. Debate resumed from 9 December 1987, on motion by Mr Holding: That the Bill be now read a second time. Mr DEPUTY SPEAKER(Mr Blanchard) —I understand that it is the wish of the House to debate the Taxation Laws Amendment Bill (No. 5) 1987 concurrently with the Income Tax (Offshore Banking Units) (Withholding Tax Recoupment) Bill 1987. There being no objection, the Chair will allow that course to be followed. Mr PEACOCK(Kooyong)(5.15) —We are debating today the Taxation Laws Amendment Bill (No. 5) 1987 and the Income Tax (Offshore Banking Units) (Withholding Tax Recoupment) Bill 1987. The Taxation Laws Amendment Bill (No. 5) contains a substantial number of amendments to the existing taxation laws. It is another of the Government's large omnibus Bills of around 50 pages and clauses. Many of those 50 clauses deal with what the Treasurer (Mr Keating) euphemistically calls `unintended consequences' arising from his previous tax changes. The other shorter Bill, the Income Tax (Offshore Banking Units) (Withholding Tax Recoupment) Bill, which we are dealing with cognately, provides for the imposition of a penalty where alterations to the laws affecting withholding tax paid by offshore banking units are abused. The Opposition will not be opposing either Bill. However, we will be moving an amendment to the motion for the second reading of the Taxation Laws Amendment Bill (No. 5) to highlight the general taxpayer's total dissatisfaction with the heavy burden of the Government's taxation policies. Accordingly, 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 notes that: (a) this Government is the highest taxing government in the post-war history of Australia; (b) an estimated 24.5 per cent of GDP in 1987-88 will be collected in tax revenue; (c) there will be an estimated $71 billion in taxation revenue in 1987-88, a $5.5 billion increase on the previous year's collection; (d) the Government has increasingly burdened not only individuals but business with new incentive-sapping taxes like the fringe benefits tax and capital gains tax; and (e) without the incentive to invest and work productively, Australia will find it increasingly difficult to extricate itself from its $83 billion foreign debt strait jacket without further reductions in our standard of living'. I said in the amendment that I have just moved that this Government is the highest taxing government in post-war history. An estimated 24.5 per cent of gross domestic product will be collected in Commonwealth taxation revenue in the financial year 1987-88. This Government unquestionably thrives on revenue collection. Little attention has been given to cutting back its wasteful expenditures because it has no compunction in squeezing more income out of the long-suffering taxpayer. The reaction to this was seen in the Adelaide by-election when a meandering Prime Minister, muttering about not a question of principle but imposing further taxes and charges on an electorate, could not comprehend, because he is the leader of a government that has lost touch with the Australian people, that they have been squeezed and squeezed dry. The Budget Papers estimate that total revenue collection in 1987-88 will increase by a massive $5.9 billion. That is an increase from an already very high level. Total collections of $72.2 billion were made in 1986-87. Of course, the Prime Minister (Mr Hawke) has been talking of announcing cuts in both business and personal tax rates at the time of the mini-Budget which is to be brought down in May. But we on this side of the House warn the people about expecting too much. After all, the New South Wales election will be before the May statement, the mini-Budget, and once it is out of the way that incentive will disappear. It appears from the polls that the Prime Minister's cynical grab for votes will not succeed. The Prime Minister has given no indication of rates, nor any indication as to when a cut in the rates will actually be delivered. In fact, the Treasurer's office is putting it out that nothing is planned definitely in any case. So it is the old smokescreen again to try to tidy up New South Wales. But, as we have seen in the desperate endeavours by the Premier, that is a lost cause. What are they going to tell us in the days ahead? Will it be next financial year, as the Prime Minister's statements have tended to imply, or the financial year after that, as the spokesman for the Treasurer has implied? For how long will the Government rake in the windfall increase in revenues from bracket creep before deigning to give taxpayers relief? The Government has used bracket creep to finance its huge expenditures. Such cuts would not be real reductions but simply stopping tax rises from which the Government will otherwise automatically benefit. A reduction in the tax burden requires cuts in wasteful Government expenditure. In short, the Prime Minister's discussion on tax cuts is, as I say, a cynical political exercise which he cannot hope to deliver. But he has raised the expectations of Australians who clamour for relief from Labor's high taxation burden. These expectations will just not be fulfilled and the Government, then, will receive the condemnation it justly deserves from an electorate wrung dry as the lemon is squeezed more and more. There is little evidence that the Government is in fact prepared to cut expenditure to finance meaningful tax cuts for low and middle income earners. Let me turn to a more specific area of taxation, namely, business taxation. The Taxation Laws Amendment Bill (No. 5) 1987 implements proposals to exempt from interest withholding tax interest paid to non-residents by offshore banking units that operate in Australia. This interest withholding tax exemption is basically intended to encourage offshore transactions, in particular on-lending to non-residents. The Opposition welcomes these proposals which in effect represent a further encouraging step along the road of financial deregulation. However, put in context, they do not go far enough in that one of the real disadvantages in attracting off-shore banking on investment generally is our comparatively high corporate tax rates. Of course, this topic has come to the fore over the last two weeks following the announcement across the Tasman of New Zealand's proposed tax reforms. Those recent announcements highlight yet again Australia's comparative lack of international competitiveness. Australia's corporate tax rate structure is just out of step with many of our competitors in the world marketplace. If the Prime Minister and the Treasurer do not realise this, they simply are shutting their eyes to reality. Indeed, given their single-minded approach to grasping more revenue, it is more a case of turning an already blind eye to the reality. Last year the Government raised company tax from 46c in the dollar to 49c. At a time when the Government was talking tax relief, the corporate rate actually rose to 49 per cent. That compares unfavourably with the top effective rates in Pacific Basin countries of 39 per cent in the United States of America, 28 per cent in Canada, 45 per cent in Japan, 48 per cent in Malaysia, 33 per cent in Singapore, 25 per cent in Taiwan, 18 per cent in Hong Kong, 43.7 per cent in South Korea and, now, 28 per cent in New Zealand. These figures may seem slightly different from those which are usually quoted. For example, we often hear that the United States company tax rate is 34 per cent. However, the figures that I have just given include all levels of government. Therefore, in the United States, there is beside the Federal tax an estimated 5 per cent effective States' tax. This data, taking into account all of the accumulated taxes, is even more relevant in a comparison of countries. That data shows that Australia has the highest rate of all of the significant trade competitors that I have mentioned. Many commentators have argued that just examining top marginal rates is too narrow and that other taxation concessions should be taken into account. However, on that point a study commissioned by the Business Council of Australia has revealed that Australia's depreciation rates, particularly when depreciation on buildings is taken into account, are not significantly more generous than those of other nations. In addition, the Government has increasingly introduced incentive sapping taxes such as its capital gains tax. Honourable members will note that tax Bill (No. 5) also contains changes to the capital gains tax provisions. Roll-over relief will be given where a resident company is interposed between a unit trust and its unit holders who dispose of their units to the company in exchange solely for non-redeemable shares in the company. This amendment is just one more in a long list of changes to the capital gains tax legislation since its introduction in 1986. During the debate late last year on the Taxation Laws Amendment Bill (No. 3) 1987, I noted the sorry state of this taxation legislation and what a complicated burden the Government has placed on taxpayers. Because of the capital gains tax, uncertainties, unintended consequences and, therefore, injustices abound. It was plain that further roll-over relief for business was needed. I said then, when speaking on taxation Bill (No. 3), that we would obviously be seeing more legislation-and here it is-in this House in the coming years. Unfortunately, that prediction does not change even today as this Government stumbles on in this bewildering arena, altering its hastily prepared and ill-considered legislation. Of course, taxes are not the only factor influencing the location of investment. The Government has yet to reveal the results of its deals with the Australian Council of Trade Unions over wage-tax cuts trade-offs. What the Prime Minister and the Treasurer have continually failed to mention is that wages policy is a major reason why Australia remains a relatively unattractive place for foreign investment, as evidenced by our low level of investment in plant and equipment. Indeed, the figures that came out yesterday showed a further significant decline in investment in plant and equipment in this country. So the engine for growth is just slowing down. The Government has consistently supported across the board increases in nominal wages without productivity offsets. Wage increases without productivity offsets simply lead to inflation, leaving nobody better off. Australia cannot afford inflation indexed wage rises in addition to tax cuts, as suggested by the Prime Minister during the weekend. There seems to be a whole web of confusion on this issue in the Government. I note that, on the Sunday program last weekend, when the Prime Minister discussed wages he did not even mention productivity. The Prime Minister talks blandly about raising people's standards of living. The major reason our standard of living has not improved much in recent years is the abysmal productivity performance in Australia. It is simple: Labor's economic policies have failed to raise productivity. Let me now turn to another important business taxation area which is dealt with in tax Bill (No. 5). The legislation seeks to remedy some minor shortcomings in the existing taxation laws with respect to lump sum superannuation and kindred payments. While these amendments appear acceptable, the Government should realise that they have been causing enormous-and that is not too strong a word-distress in the community over the general issue of superannuation. I do not say in relation to these specific measures but in respect of other measures that have been the subject of some discussion in the House today. My office and the offices of all other Opposition members have been deluged with calls from people, many of whom, quite frankly, are distraught over the possible changes to the taxation of superannuation and their ability to receive lump sum payments. We have heard that over a dozen-is it 17?-senior pilots from Qantas Airways Ltd have recently retired for this very reason. We have also heard stories about similar large retirements sweeping through firms and organisations. The stories can be substantiated. Only last week we were notified that large numbers of people had left or were close to leaving the Gas and Fuel Corporation of Victoria-all over the fear arising from the rumours about superannuation. This fear did not result from the changes in this legislation, but a number of amendments in it may have touched off the rumours in the broader field. It is the role of government to allay those fears, not to create them. This Government must explain what it is doing and ensure that it does not impose changes with a retrospective effect-and I will come back to that in a moment-on people's financial positions. This Government has created fear in people's minds. The Treasury has been working on a paper that provides for taxing the superannuation funds and their profits. God knows what Treasury officials have been working on in relation to lump sum payments. Nobody knows. It is as if the Government is treating this whole matter with contempt. People plan their whole life span with a nest egg at the end of it. Successive generations in this nation have been encouraged to put something aside for their retirement. That could be jeopardised and not explained. There is an underlying fear and in that case it is understandable. Of course, this has created a very different form of fear in the mind of the plodding Premier of New South Wales-that is, the fear of losing. He has just lumbered-or stumbled-into the arena and called on the Federal Government to come clean and get its hands out of people's superannuation. Just as the reality of defeat is dawning on him, he feels that he had better alert the attention of the Federal Government to the plight of people. He too recognises the charge that the community is making on this Government, that it has lost touch with ordinary Australians. Poor old Barrie! I have never seen a fellow who more consistently looks like the man who has just missed the last train. No doubt a major contributing factor is this particular concern at the moment. It is fear, but a differently motivated fear from that which the community has at present. For the life of me I do not understand why this Government has created this fear in the community and why it will not come clean. We did not get much out of the Prime Minister today, other than the reality that this Government is looking at the matter. Honourable members will not hear from the Treasurer on this matter because he has a vastly different sort of fear. He fears that, if he makes the running on this matter, he may not get up as the successor, the anointed one. There is not much doubt on this side of the House that the current Prime Minister will be gone by December. I take no notice of all the backgroundings from his office that the Prime Minister's retirement is certainly not on. He does not want to be regarded as the so-called lame duck. The Prime Minister will deny this, but he is cutting and running. The end of this Government is in sight. The Prime Minister is going before the end and the anointed one will take over. One never hears from the Treasurer on an issue such as this. Where was he on the ID card-this essential element of economic policy? Where was he in the ID card debate, on the matter of collecting the tax due? Cut it out, mate! He fled from that as fast as he could. Where was he in the Adelaide by-election? He dropped in one morning, dumped the time charges issue on the Prime Minister-the so-called economically rational approach-and skedaddled to Europe. Where is he on this issue? Oh, no! With all the signs of erosion in front of the Government of opposition to the transition and with all the mutterings about the capacity of the Minister for Defence (Mr Beazley), who is now the Vice-President of the Executive Council and Leader of the House-God knows where he is leading us after the last two days of confusion in this House-we have the image of the macho Treasurer who takes the tough decisions running from every tough political issue in the course of the last six months. That is why he will not come clean. People out there are confused and they are entitled to know what this Government is doing. Should the Government go ahead, that decision will not affect the Government's superannuation; it will affect individual people and their futures. I am sure that it will not be introduced before the current Prime Minister flees. It may well be that poor blundering Barrie is making these noises not so much out of fear for the electorate, but out of fear that, having won his seat by only 54 votes, he is a rolled-gold, lay-down misere to lose it in a few weeks time. He wants to shore up his own, either way. The motivation for the confusion and concern is the fear of a great many people in the electorate. What this Government is doing to them is cruel and unnecessary and, unless it comes clean on the matter, I predict that the fears will be exacerbated in the minds of so many who are already considering leaving their places of employment. Furthermore, the Government is adopting a blinkered approach to corporate tax reform. It is talking of a revenue neutral outcome. This means that, instead of making the expenditure cuts to allow a reduction in the tax burden, it will simply shift that burden around. In the process, it is understood that it is seeking company tax reductions as an offset to increase tax in the area of superannuation. I do not know precisely what the Government intends, nor does the Premier of New South Wales, but this could be the wrong policy focus. I mentioned the matter of retrospectivity in this arena, for there is a whiff of retrospectivity in the air. People have been organising their financial affairs, based, I assume, on existing arrangements. To change these rules with any retrospective or retroactive effect would be similar to breaking an implicit contract with the taxpayer. The Government should now reduce the increasing uncertainty in the community by giving an indication of its intentions, especially as to whether people will be allowed to receive lump sum payments and whether any retrospectivity is proposed. Lastly, I note that there is strong doubt that the provisions in the Taxation Laws Amendment Bill (No. 5) relating to the exclusion of what are called `variable annuities' from the category of annuities eligible for taxation concessions are exactly the same as those announced in the Treasurer's Press release of 12 January 1987. Mr Deputy Speaker, it would not be inappropriate to draw your attention, as a member of this House, to this matter. Although you are sitting in an unbiased way at present, I know of the pungent attacks that you have made, when you are not in such an objective frame of mind as you are now, on legislation by Press release. I urge you to examine this carefully and, should you agree with what I say, on leaving the chair to join me in bringing this particular point to the attention of the people of Australia. If it is the case that the legislation differs from what is contained in the Press release of 12 January 1987-a fair time ago-a fair number of people would have been operating precisely in terms of that Press release. If the legislation is different I would welcome the view of whichever Minister is here-and they seem to rotate from time to time-at the end of this debate. Given that the legislation's operation is backdated to the Press release, there is again a strong element of retrospectivity. I have no problem with legislation operating from the date of a Press release, but I expect that legislation to be brought in speedily after the announcement and for it to mirror accurately-no more-what the Press release states. On this element of retrospectivity, this is especially the case for those taxpayers who have been operating on the basis of the Press release that was issued by the Government. This would then simply be another case of the Government causing unnecessary distress by delayed legislative action after the issue of that Press release. In summary, let us hope that the Government presents substantive changes to taxation this year but, as we proposed, financed by cutting wasteful expenditure in the Budget. When we talk about tax cuts, we relate them to cuts in government expenditure. We say that one depends on the other. This Government should not rely simply on the increases in revenue inflow resulting from bracket creep as inflation bites at low to middle income families. The Government should embark on genuine tax reform financed by cuts in expenditure rather than meaningless revenue neutral exercises which do not address the fundamental problem of the tax policy-and that is Labor's `big government' fixation. This is the only way to reduce the burden on individuals and businesses. It is the only way to create the incentive to work and to invest to pave the way for the release of resources so that we can trade our way out of the $83 billion foreign debt straitjacket without a continual decline in our standard of living. Mr DEPUTY SPEAKER(Mr Rocher) —Is the amendment seconded? Mr Shack —Yes. Mr MARTIN(Macarthur)(5.42) —It is a great pleasure to take part in this debate on the Taxation Laws Amendment Bill (No. 5) 1987 and the Income Tax (Offshore Banking Units) (Withholding Tax Recoupment) Bill 1987. These are the latest in a group of Bills which reflect the Government's commitment to attack, through legislation rather than through Press release, which the Deputy Leader of the Opposition (Mr Peacock) referred to earlier, the subject of tax reform. For a number of years this Government has been committed to ensuring that taxpayers pay their fair share, and that all income earners contribute to the provision of services which this Government and other levels of government in this country must equally contribute. I have no compunction whatever in suggesting that a number of points made in the opening remarks of the Deputy Leader of the Opposition and shadow Treasurer were made purely with political intentions in mind. The fact that the New South Wales election is coming up may have had something to do with it. I suspect that some of the honourable member's comments went straight to the heart of that issue. I will be pleased to respond to some of those matters later in my remarks. The Minister, in his second reading speech, stated that the Taxation Laws Amendment Bill (No. 5) will amend various taxation laws to a range of policy decisions of the Government. That issue is most important. There is a vast difference between Labor members and Opposition members, because Labor has policies. I have been in this place for just over three years and have spoken quite often in this place on the subject of taxation and the policy issues associated with taxation and finance. I continually come back to the same position and find myself asking the same basic questions: Where are the Opposition policies that can be shown to the people of Australia which can stand scrutiny and pass the most important test of all, the test of the ballot box? I have not yet seen those policies, and will return to that issue in a moment. Mr Duncan —It will be a long time off, too. Mr MARTIN —As my colleague the Minister suggests, it will be a long time off. The measures in the Taxation Laws Amendment Bill (No. 5) are many and various. The Deputy Leader of the Opposition said that changes were continually being occasioned by the Government's reform packages and the policies that were coming forward. He saw that as a bad position to adopt. I would ask the honourable member to check with his Opposition colleagues who formerly occupied the Treasurer's role whether there have been previous examples of government finding it necessary to amend taxation laws. Because of changed circumstances, because of arguments advanced by people in the community, have there been no earlier examples when taxation laws were found to be in need of alteration? If one looks at the volume of taxation legislation, one can see the changes which have occurred over a period of time. The answer to my questions obviously must be in the affirmative. In regard to the developments set out in the two Bills that are now before the House, I would point out that the proposals will give effect to the Government's decision announced on 1 July 1986, and expanded on 9 April 1987, to provide an interest withholding tax exemption to facilitate offshore banking in Australia, primarily for dealings in foreign currency for non-residents. Effect is also being given to the proposal announced on 29 September 1987 to extend roll-over relief-that is, deferral of liability-from tax on capital gains for certain reorganisations of resident unit trusts. The Bill implements two additional changes announced in November last year to the concessions for expenditure on scientific research and other qualifying research and development activities. Clearly, this will ensure a more efficient use of revenue available for research and development activities by simply focusing on more productive and innovative investment. I am sure that honourable members will have heard-indeed, they have probably read about them-the Government's commitment to ensuring that more productive and innovative investments are focused on research and development initiatives. The Minister for Science, Customs and Small Business (Mr Barry Jones) is constantly preaching this need in Australia. The Minister for Industry, Technology and Commerce (Senator Button) has also become a fervent supporter of the need for innovative changes in Australian industry to make it more productive and competitive. The Government recognises that. Indeed, some of these measures are aimed at facilitating that process. Honourable members who have had the chance to travel overseas in the Pacific Rim area and further afield will have visited some of the countries with which we are directly competing. I am sure many members have taken the opportunity to look at what Japanese industry has to offer and the lessons to be learned there. We also have seen the lessons that can be learned from what is happening in the Republic of China and Taiwan. Again, we can learn from that experience. It is now incumbent on industry to take up those measures which the Government, through its taxation policies, has put in place to enable that process to take place. The Bill also ensures that measures are included which are complementary to those introduced in the Taxation Laws Amendment Bill (No. 4) to permit a newly incorporated company-commonly referred to as a shelf company-to be eligible for various company grouping provisions of the income tax law. All those measures tidy up somewhat matters that were identified in the broad community when this legislation was proposed and in existing tax laws and are a direct reaction to the Government's responsibility to make changes as the need arises. The Deputy Leader of the Opposition spoke of reacting to changes in taxation laws, as I mentioned earlier. He spoke of unintended consequences which perhaps the Government did not foresee when drawing up the variety of legislation on tax reform. I do not accept that that is the case. This legislation is a reaction to the fact that the Government, through successive taxation amendments, is seeking to ensure that people pay their fair share, that there is equity in the tax system, and that people and companies which previously did not pay their fair share and which perhaps indulged in tax evasion and avoidance but have now been found out are now contributing to this country. As I have said previously in debates on taxation, we have to go a little beyond speculating about why governments collect taxes. We have to look to the reasons why that is necessary. As I have indicated, it is because this Government-in fact, any government at the Federal, State or local level-is responsible for providing a variety of services to the people of this country. Money, much as we would like to see it, does not grow on the proverbial tree. People have to contribute to their upkeep and contribute fairly and equally to ensure that that burden of responsibility is borne right across the spectrum. The Government is of the view that through its various taxation reform measures in the business and personal income tax areas, that aim is being achieved. The Deputy Leader of the Opposition talked about the heavy burden of the Government's taxation policies. Is reducing the top marginal rate from 60c to 49c a heavy burden? Are all the other consequential changes that collapsed those tax scales downwards a burden on the ordinary pay as you earn taxpayer? I suspect not. If we look back five years, before the Australian Labor Party came to government, we see what was in place then. We have heard the empty rhetoric about changes that were on the way, but they were not in place. When the Liberal and National parties went out of government they left behind a 60c in the dollar top marginal tax rate and a series of other business imposts which they did not have the political will to tackle, yet they purport to represent those people in the community. Now they sit back and wonder why that support has deserted them in droves. I certainly know why that is the case. They complain about the Government's imposition of the fringe benefits tax (FBT) and the capital gains tax, saying that they are incentive-sapping taxes, to use the words of the honourable member for Kooyong. The people in the low and middle income brackets are not too concerned about the FBT and the capital gains tax. I remember when those taxes were being brought in the scare campaign that was being run by honourable members opposite about who the taxes were going to affect. I remember this being one of the tough political issues referred to by the Deputy Leader of the Opposition that the Treasurer (Mr Keating) did not run away from. The Deputy Leader went to great pains to say that the Treasurer runs away from every tough political issue. Let me tell the House that I will put my money on the Treasurer against the Deputy Leader of the Opposition any time when it comes to financial and economic matters and taxation issues. In the last five years we have seen that the Treasurer of this country has had the political will, the guts and the integrity to take forward the changes necessary in taxation. This is reflected in the Bills with which we are dealing this afternoon and in other taxation measures that have been put in place. He has been prepared to shape policy, to drag this country forward, to give it a competitive edge so that people in the business community can have some advantage to compete on the world scene. He has been able to drag down those marginal tax rates so that those at the lower end of the scale, as well as the middle income earners, have been able to get some relief from the taxation burdens that have been imposed, not by us but by those on the other side of the House before they went out of government. Those opposite should not come in here and tell me that there has not been tax reform. They should not tell me that the Treasurer runs away from tough political issues. We could list every tough political issue in this country over the last five years and show that the Treasurer has been at the forefront of the fight. He has not run away from anything. The Deputy Leader of the Opposition also made some comments about corporate tax rates. He went to great pains to talk about the fact that we have a 49c in the dollar corporate tax rate, which is in excess of the rate of most other Pacific Rim countries, if not all, and he gave some tax rates. It has been the wont of many people in recent days to make comparisons with New Zealand. But any comparison with New Zealand has to be balanced, I believe, with a consideration of the relative sizes of the economies of the two countries. The Deputy Leader talked about legislation by Press release, but what has to be remembered also is that what has been announced in New Zealand is a proposal. It has not been put in place; it is a proposal. We also have to remember, when talking about the corporate tax rate in New Zealand, that that rate will come in without any exemptions whatsoever. That is not the case in Australia. Sure, we have a 49c in the dollar rate but we have many exemptions. New Zealand is just the opposite: it has a lower rate with no exemptions. So let us balance the facts to get a fairer representation of those corporate tax rates. Let me talk also about the question of retrospectivity. The honourable member for Kooyong referred to that matter in his treatment of superannuation. This is an issue that I have personally raised with the Treasurer because, like him and many other members in this place, I suspect that we have been lobbied by certain interest groups on the question of superannuation and retrospectivity. Perhaps the same Qantas pilots who spoke to me also spoke to the Treasurer. One pilot phoned me asking me to do something about the matter. I remember him well. On election day in July he was standing outside a polling booth in the western part of my electorate handing out how to vote cards for the Liberals. The Liberals did not get up in Macarthur, naturally. Nevertheless, he now comes along and says, `What about this superannuation, mate? Can you give us a bit of a hand, mate? What you blokes are proposing to do is not fair'. Nothing has come out yet, so what he thinks we might be proposing to do is starting to affect him a little. I can understand his concern. I did the right thing, as a good local member would do, and raised with the Treasurer the issue of retrospectivity for the Qantas pilots and some others. I put to him that we had to be a bit careful about this. One never knows, the Qantas pilot out there at The Oaks might change his vote one day and it might be important to us. More importantly, we have to consider these people and the question of retrospectivity. We have to consider any review that goes on within the corporate tax sector, or with superannuation or anything else, with an eye to the people who may be hurt in some way by actions that any government might take. That brings into question the basic issue of why superannuation was put in place. This Government has deliberately pursued a policy of trying to get superannuation in place because of its recognition that Australia's population is ageing. As the population ages, so too does the requirement on government-any government that is in power at the Federal level-to provide social security benefits of varying degrees for those aging members of our society. If through the working life of those people we can get them to contribute to superannuation and if they know that at the end of that working life there is something that will see them through after the age of 65, it is our duty and our right to look at that in a fair and reasonable way. The Government has already indicated in regard to superannuation, and the Prime Minister (Mr Hawke) referred to this in Question Time today, that there are aspects that are being examined as part of our total review of the corporate tax structure and the taxation structure generally. Unlike those opposite, who again have no policy in this area-or in any other area for that matter, from what I recall-we are progressively changing, as circumstances dictate, our approach to taxation policy, to social security policy or to any other policy, because we respond to the needs of the community. This Government will continue to do so. I conclude by saying that I totally agreed with the Federal President of the Liberal Party, Mr John Elliott, when he stated recently that the Liberal and National parties did not deserve to win the election in July because they simply were not ready. They were not ready because they did not have policies which they could put to the people as an alternative government. They had no policy then and they have no policy now. I return to a point that I made during my contribution today: for three years now I have debated issues of finance, taxation and economics generally in this House. During earlier tax debates, such as that on the fringe benefits tax and so on, I have pleaded with the Opposition to put forward what it would propose as alternatives and how it would fund the $11 billion cuts in Government expenditure that we looked at last year. I still have not received a satisfactory answer. I am not the only one who would like to know. That is what this chamber is for-debate on policies and issues. The people of Australia would also like to know what the Opposition has to offer, rather than the empty rhetoric that the Deputy Leader of the Opposition comes in here with. He talks about retrospectivity, corporate tax rates and so on and says that the Treasurer is running away from the hard decisions. It is an absolute nonsense to suggest that that is the case. This Government will not run away from the hard decisions; it will face up to its responsibilities in this area of taxation reform and any other reforms that are needed. Mr ALDRED(Bruce)(6.01) —I rise to support the remarks made by the Deputy Leader of the Opposition, the honourable member for Kooyong (Mr Peacock), earlier in this debate on the Taxation Laws Amendment Bill (No. 5) and the Income Tax (Offshore Banking Units) (Withholding Tax Recoupment) Bill which are before the chamber. However, although I will address some matters related to those raised by the Deputy Leader of the Opposition, essentially I will deal with some fairly different material and will also pick up some of the comments that have been made so far in this debate. The proposal in the Bills to exempt from interest withholding tax interest paid to non-residents by offshore banking units that operate in Australia is a further encouraging sign pointing towards financial deregulation. However, yet again, the Government has failed to maximise the full benefits for Australia. The proposals do not go far enough because the major problem in trying to attract offshore banking is our corporate tax rates which remain unacceptably high. However, they are unacceptably high for some only. It is interesting in that regard to look at this morning's Canberra Times and the economic comment in that newspaper by Ian Davis. In a very interesting way he drew out the differing company tax rates paid by various categories of companies. At the top of the article he listed some of those companies which are among the highest corporate taxpayers. As a percentage of pre-tax profit in 1987, the tax paid ranged from 73.71 to 50.02. The companies which are paying, in a very generous way, their due share of tax among the highest corporate taxpayers include AGC, the ANZ Bank, ICI, Rothmans, Alcan and Metal Manufacturers. It is also interesting to read some of the further comments in Ian Davis's article which are not exactly complimentary to this Government in terms of tax equity. I will quote directly from the article, particularly the comments which Ian Davis made about those companies that are among the lowest corporate taxpayers. For companies in the lowest category, in terms of percentage of pre-tax profit for 1987, the range was from 0.18 to 12.22. In respect of those com- panies and the corporate tax review which is in front of us, Ian Davis said: It is equally to be hoped that the close associations between Mr Hawke and the heads of a number of the companies in the list of low-taxpayers-Westfield, Northern Star, Bond Corp, Bell Group and News Corp-does not sway the Government from constructing a more equitable company-tax structure in which com- panies which have borrowed heavily to fund takeovers, or which receive the benefits of dividend imputation, pay more company tax, thus easing the burden for other corporate citizens. In this way, nominal rates can be reduced without sacrificing concessions for research and development and the depreciation allowance which encourages investment in those activities which need to be encouraged if Australia's competitiveness is to be enhanced. One would hope that, when the corporate tax review goes further down the track, the situation I have discussed will be recalled and something will be done to remedy the present very inequitable situation of corporate tax. I now move on to some of the other general issues regarding taxation. I remind the House that much of the problem we have regarding the high tax burden on corporations and families in Australia, which the Bills before us today do nothing to relieve, is very much a direct consequence of the whole spectrum of this Government's inept economic policies. For instance, Australia's overseas borrowings currently stand at a staggering $115 billion and are growing at an incredible $200m a week. This debt is equal to a crushing $16,000 for every taxpayer. The interest payments paid on borrowings, of course, lead to higher taxes, charges and prices, which means that each income earner must in effect now find approximately $25 a week to meet interest payments. Although Australia's highest marginal rate has been reduced to 49 per cent or, more accurately 50.25 per cent when the Medicare levy is included, the high rate cuts in on salary levels far below those of other countries and it is the modest middle income earner in Australia who is hardest hit. If an Australian receives $1 of income more than $35,000 he or she moves into the top tax rate of 49c in the dollar. Yet if one compares that with the situation in a number of other countries, one finds that it is a very unflattering comparison. No Englishman would pay 49c in the dollar until he earned $A60,000 or more. No Japanese would pay 49c in the dollar until he earned $A200,000 or more and no American would ever pay 49c in the dollar. So much for the concern being expressed from the other side of the House about the middle income earner! Compounding the taxation burden now faced by Australian families is the fact that there is little relief available to them through tax exempt deductions. Furthermore, rebates for dependants are laughable when compared with those in many other countries. This Government seems to forget that Australia's future lies in its children. It is little wonder that our birth rate has been so depressingly low in recent times. Australians have few legal means of limiting their tax. The most significant item, of course, is the deductibility of contributions to certain superannuation funds to a limit of $1,500 for wage and salary earners. However, when one takes an overseas comparison, that limit is shown to be quite minuscule. In Canada, the deductible maximum for an employee is $A8,060; in the United States of America it is $A2,800, and in Sweden it is $A11,095. In Australia, a married man is entitled to a maximum tax rebate for a wife and child, or children, of $1,030, reducing by $1 of every $4 by which the income of the dependants exceeds $280 a year. Therefore, if a wife earns as little as $75 a week the rebate disappears. It should be pointed out that, generally, personal allowances in most other countries far exceed those in Australia. In Canada, the single taxpayer can claim a basic personal allowance of $A4,537, indexed for inflation, and a further $A3,978 is available as a spouse allowance. This allowance does not reduce until the spouse's income exceeds $A600. I think that the most interesting thing to note is that, under this Government, the big business friends of the Prime Minister (Mr Hawke) have increased their personal wealth to unimaginable levels while the average Australian family, which this Government makes so much of, has suffered under even more onerous taxation and pseudo-taxation impositions. The cost in 1987 of supporting a five-year-old child was estimated to be $37.63 a week, or $1,956.76 a year. The cost of supporting a teenager was $92.16 a week, or $4,792.32 a year. The costs of raising a family in Australia are continuing to rise, yet still we see no sign that this Government intends doing anything to help the bulk of Australia's families-and certainly not through tax relief. I shall now turn to the separate but related issue of superannuation, which is also addressed by the legislation before us tonight. These Bills are introducing some changes to superannuation. There is no doubt that superannuation is a matter of great importance to Australians, who are increasingly taking advantage of superannuation policies in an effort to ensure that they are able to enjoy a comfortable lifestyle in their retirement, a lifestyle denied to them during their working lives under the favoured mates taxation policies of this Government's New South Wales-based right wing and particularly of the Prime Minister. This Government has succeeded in frightening everyone to death through its mishandling of the superannuation issue. As evidence of this, I can tell the House that my own electorate office has been absolutely inundated by constituents worried about what the Government may be considering for superannuation. Some are so frightened by what the Prime Minister and the Treasurer (Mr Keating) may do, to deprive them of their rights to decide for themselves how best to use their invested superannuation, that they are seriously considering early retirement in an attempt to prevent the Prime Minister and the Treasurer taking away something for which they have struggled long and hard. This brings me to my next point. If the Government has any understanding at all of the electorate's mood, it should move now, rather than wait for the May economic statement, to allay the fears of the electorate on the issue of superannuation. We do not need any more procrastination such as we saw during Question Time today by the Prime Minister. I remain pessimistic that the Government will do this. With the Prime Minister and the Treasurer now spending so much of their time rubbing shoulders with Australia's super-rich, they have come to regard the majority of Australians, that is, those struggling to make ends meet, as inconsequential. The Prime Minister and the Treasurer no longer have any idea of what issues are of concern to middle Australia. My colleague the shadow Treasurer and I believe that any changes to superannuation should be made in the context of a complete retirement income policy package and not part of a blanket overhaul to offset changes to company taxation. I am against any proposal at all to further restrict the rights of Australians reaching retirement to do as they see fit with their superannuation. I am opposed to any changes that would further limit the amount that a person retiring from the work force could take as a lump sum payment. It would appear from the Press this morning that battling Barrie Unsworth, the beleaguered Premier of New South Wales, shares that view. For instance, this morning's edition of the Melbourne Age reported what he had to say: Mr Unsworth said that `one of the things I want to put an end to is the suggestion that there might be a tax on superannuation funds'. He is further quoted in the Canberra Times: Mr Unsworth admitted that Labor's traditional supporters were disillusioned that their wages had declined in real value in recent years while wealthier sections of the community had prospered. I guess that is what the result in Adelaide was very largely all about. Finally, Mr Unsworth sums it up, I guess very succinctly, in today's Australian Financial Review: Mr Unsworth said he opposed the taxation of superannuation funds and suggestions of curtailing lump sum payments because both proposals would disadvantage people who had saved for many years to finance their retirement. `They're matters I want to put to rest,' he said. I am sure that he does want to put them to rest before the electors of New South Wales put him to rest for all time. In overall terms, the Opposition does not oppose the Bills now before the House, but it expresses great reservation about the current state of the Government's corporate and personal tax regimes and, in particular, the terrible financial position in which they have placed the average family in middle Australia. Mr WRIGHT(Capricornia)(6.15) —At the outset I should like to comment on some of the remarks made by the honourable member for Bruce (Mr Aldred). I take the last point about superannuation because people everywhere across the nation are seeking clarification on what the Government intends to do on superannuation, but let it be clear that the reason for concern and trauma is that the employers, whom the honourable member for Bruce represents, being a tory, have been sending letters to employers saying that the Government intends to take away their lump sum entitlements or intends to increase the tax on superannuation lump sums. The insurance companies and the representatives have been saying exactly that-not that it is under review by the Expenditure Review Committee but that it is going to happen. David Barnett, a great journalist-I am told-who worked for Malcolm Fraser, has been saying exactly the same thing in his columns across this nation, hyping up the issue and creating fear and trauma. That is the reason we need clarification. This Government has been totally responsible in its management of superannuation funds and in its attitudes and policies on superannuation funds. If we are to start doing something about the massive amount of money going overseas from those funds, I would totally agree with any measure that will be a deterrent to that escape of money. Something like $7 billion a year is going overseas from this country. It ought to be used in this nation to build houses and roads, for investment in small business, and to develop the nation. If the honourable member for Bruce wants to say that he supports that approach, he should do so. If he supports the employers causing this trauma and insurance companies telling blatant lies, he should stand up and say so. He commented on the list of companies paying low taxes, but I noted that no mention was made of Elders IXL. Why did he leave Mr John Elliott out? Why, I wonder. It is easy to see that he picks his information and is very selective in what he tells the House. I hope that those who read his speech follow on to my speech and those of other speakers. Mr Duncan —Who is John Elliott? Mr WRIGHT —John Elliott, the head of the Liberal Party, to whom the honourable member for Bruce kowtows. The honourable member talked of high tax burdens but did not bother to say that nothing was done by his Party when it was in government for 23 years out of 28. It was this Government, the Hawke Labor Government, that slashed the tax rates from 60c to 49c, and from 48c to 30c, and from 30c to 24c. This Government is taking heed of the situation and is lifting the threshold so that no-one pays tax on approximately the first $5,000. The honourable member had the audacity to suggest that, when comparisons between this country and others are made, our people are worse off. He did not bother to say that, when one goes to those countries, there is a built-in tax, an indirect tax, of 5 to 15 per cent on everything one buys. I suggest he should not be so selective in what he is saying and ought to present the facts when he starts talking about what the Government has done. The amendments before the House are further proof of this Government's willingness to act to eliminate anomalies that arise in the Australian taxation system. They are further proof of the Government's willingness to continue to ensure that the taxation system remains fair and just. As the responsible Minister explained earlier, the amendments include measures that will encourage offshore banking in Australia through a withholding tax exemption of interest to non-residents who buy offshore units. Other amendments relate to the provision of a deferral of liability or relief from capital gains tax for certain reorganisations of resident unit trusts. A number of other legislative changes are proposed and they will correct deficiencies that exist in the tax system. The honourable member for Bruce mentioned the superannuation system. Some deficiencies will be corrected there as well. It is not as if the Government has not acted. The point is that it has. In a matter of five years it has tried to come to grips with all these difficulties. Although I realise that there are still difficulties, some of which I shall mention shortly, credit should be given where credit is due. I hope that one day I will be able to say in here that all the problems are over. That really is a magic wand land. Regardless of the changes the Government makes, there will be those anomalies. Too often concerns have been created by the people I mentioned before, like the employers and the David Barnetts. If I had one wish I would like one day to pick up my own Morning Bulletin in central Queensland to read the David Barnett column and find one comment that he makes that is positive and supportive of the Hawke Government. Mr Aldred —Hard to find. Mr WRIGHT —We never hear him say it. I think that he must get up in the morning and suck lemons before he begins writing his column. I should like to think that one day I will see that. I should also like to hear some employers start telling the truth when they are explaining what the Government intends to do. I suggest that the Hawke Government has earned an excellent and well-deserved reputation as a tax reforming government, perhaps the tax reforming government of the twentieth century. We have seen major changes, as I said before, in the pay as you earn (PAYE) tax system, and in company taxes, where we have removed the double tax that existed on company dividends. Every Australian has benefited because the average tax rates have been changed. The task has not been easy; any true critic would have to realise that we face enormous troubles in the economic circumstances caused by international factors and by the poor economic management of the previous Howard and Fraser Government, particularly between 1980 and 1983. However, despite that, the Treasurer (Mr Keating) and the Prime Minister (Mr Hawke), the Cabinet and this Caucus that represents the Labor Party and this Government have been able to bring down major changes and resolve many of the anomalies. There will always be problems, and I want to mention one problem that I believe needs to be addressed, that is, the loophole that seems to exist in the prescribed payments tax. I have talked with the Building Workers Industrial Union, the Builders Labourers Federation, the plumbers union and the painters union. I note the Deputy Speaker smiling when I mention them, but they have a special interest in their membership and, in this instance, they are taking a very strong national interest in the issues they are raising. They have pointed out that we are plagued at the moment with pseudo-contractors in the construction industry. There are 103,000 people in the construction industry and it has been suggested that the minimum bottom line would be that one in 10 of these are not PAYE employees but are playing the game of the subcontractor and are doing it in a false way. In doing so, they are paying, in most instances, only 15 per cent tax under the current prescribed payments tax system. Their employers are happy with it because there are some advantages to them, too, and I will explain that in a moment. There are so many of these fellows, and if the figure is one in 10, that means we are talking about 10,000 just in the construction industry. There are another 50,000 people in the motor vehicle industry and there are some five industries tied under the prescribed payments system. Therefore, we are talking about a lot of people. I have spoken to the Australian Taxation Office about it, and it has said, `Our hands are tied. We are virtually handcuffed because we have not had the human resources. Our inspectors have not been able to get out there and follow it up'. The employers encourage workers to register as subcontractors under the prescribed payments system. The advantage to an employer is that he pays no holiday pay or loading, no workers compensation, no payroll tax and no overtime payments. He is also in a very good position to lower his tender price when fighting for contracts. However, it is a very costly practice for Australians. From the subcontractors' point of view, there are also some advantages, because these pseudo-subcontractors are paid slightly above the award; they are often paid in cash; and they have to pay, in most instances, only 15 per cent tax up front and sometimes that is all the tax they pay. Sometimes, I am told, they use bodgie tax file numbers. As the House is aware, under the law, no employer can ring up the Taxation Office and check a tax file number. He has to take what the employee says to be true. These subcontractors pay no more tax, because they tend to move around the industry. As the tax fellows have said to me, at least they are getting 15 per cent from these people. Under the Liberals and Nationals, before 1983 when this Government introduced the prescribed payments tax system, the Taxation Office was getting nothing. At least it is now getting 15 per cent. Obviously this is wrong, and it is a costly practice because, in 1986-87, the total amount of money derived in tax revenue from the prescribed payments system was $765m. That is a massive amount of money when one considers that that is 15 per cent of the gross earnings of people within five industries. It is estimated that next year it could be as much as $900m. I put it to honourable members that if one in 10 are involved in this rort we are talking about a loss in the coming year of some $90m. But it is as some of the union leaders have told me-that it could be 20 per cent, 25 per cent or one in three-we could be talking about a $200m loss in the coming financial year. When one adds to this the black cash practices in the domestic market where the prescribed payments tax applies on jobs over $10,000, the problem just boggles the mind. It is a common practice for builders and painters who are going around painting houses, extending rooms and so on to say to people, `Look, it is $3,000, but pay me cash and I'll drop it to $2,500'. It is a major problem that tax cannot be collected. There are some solutions to the current problems, the first of which is that we must change the definition of `subcontractor' within the Income Tax Assessment Act. We also have to tidy up the master-servant relationship that tax officers have to work upon. We must ensure that only those who are true subcontractors are involved in the prescribed payments tax system, and we must also lower the threshold on domestic contracts from $10,000. It may sound revolutionary, but I suggest that the tax form ought to be changed in some way so that people can be asked to list the payments that they have made to builders and to painters in the last financial year. They would not be required to pay any tax on it, but the contractor and the painter would know that there was a chance of cross-checking, that if the customer they dealt with during the year lists their name and how much he spent, there is a chance that the taxation people could follow it up. If that occurred, I believe we could stop that black cash transaction racket overnight. From the subcontractors' point of view, however, we must consider the problems in the Taxation Office and give more human resources, revamp the definition of subcontractor to make it tougher, and develop some link or parallel between the PAYE system whereby the employer collects tax on behalf of other employees and the prescribed payments system. As the law says, if the subcontractor does not supply a tax file number, he does not have 15 per cent taken from his earnings or the invoice statement of labour content; he has 30 per cent taken. I suggest that if we were to introduce a prescribed payment tax rate of at least 25 per cent and let the employer take that out, our problem would be resolved. We could be saving ourselves $100m, $150m or even $200m a year. Action is being taken, and this coming Friday I will meet in Brisbane with leaders of the four major unions, and a union dossier will be given to the Taxation Office naming businesses and those who we believe are the pseudo-subcontractors. I mentioned also the problem of pensioners paying provisional tax. I raised this issue in the House two years ago. I appreciate that the review is under way and that reviews take time, but the present exemption threshold is only $1,000 and any person or pensioner who earns in excess of $1,000 in addition to his or her income, salary or wages-and that includes pensions-from interest or dividends or any other investment must pay provisional tax. The threshold of $1,000 has been there for almost 10 years. In 1979 it was $400 and was raised in the Budget at the time by the previous Government to $1,000. I am told that the cost of increasing the threshold from $400 to $1,000 was $15m. It may not seem important to many people who they say that it is only a one-off payment by the pensioners because the next year they will get that payment back if they do not earn more than $1,000. But we appreciate the fact that today it is not a lot to have $12,000 in the bank earning 10 per cent interest and to be over the $1,000 threshold. In 1984-85, 240,000 pensioners were affected by provisional tax in this nation. In 1985-86 the figure rose to 260,000, and I am told by tax authorities that in this coming financial year the figure will jump to a massive 340,000 to 350,000 pensioners paying provisional tax. I just do not believe that is how it ought to be. It means that something like 350,000 of the two million aged pensioners and veterans face provisional tax bills this year; 350,000 people with a limited ability to pay; people who have their money in fixed term investments and who are going to dislocate and dislodge that investment in order to pick up the $500 or $900 they are now called upon to pay in provisional tax. Every credit should be given to this Government for what it has done in raising pensions and introducing tax rebates for those people who earn up to $1,000. But we cannot leave it at that. It was excellent when people were earning $20 a week over and above their pensions and they knew there was a total tax rebate of $250 to cover that. However, that is no longer the case, because people can earn $40 a week and find that they have to pay tax on that. The pensioners will wear that in most cases but they will not accept provisional tax. They will not accept the fact that they are paying double tax when they earn a few thousand dollars over and above their pensions. Sitting suspended from 6.30 to 8 p.m. Mr WRIGHT —Prior to the dinner break I was canvassing the problems that confront some 350,000 pensioners who this financial year will be faced with paying provisional tax. I pointed out that in 1984 some 240,000 pensioners were faced with that financial problem. One can quickly see how that figure has grown in a few years. It means that a massive percentage of the two million pensioners and veterans in this country now face double tax in the first year should they earn in excess of $1,000 over and above their pension. The Treasurer has developed an historic reputation for his willingness to address problems, and I make a personal appeal that this problem be addressed also. The costs would not be great, and I will give the official figures. When the previous Government changed the threshold from $400 to $1,000 the cost was only $15m. I suppose that when one says that quickly it does not sound very much, and it is not much when we consider the number of people affected. I was told today that the cost of raising the threshold from $1,000 to $2,000 and thus exempting most of these people would be a mere $20m-I would think $20m well spent. These people face a very specific problem. They have their money in fixed term investments and they suddenly receive a notice from the Australian Taxation Office advising them that they are required not only to pay tax on earnings over and above the threshold we have set-the pension plus the $1,000 rebate, or the $250 on $1,000 that pensioners have-but also to pay provisional tax. I ask that this matter be considered. Legislation would not be required to correct it. I have been informed that, under a general provision of the Income Assessment Act 1936, section 221yc (1) (a), the Commissioner has a discretionary power to set the limit, the threshold. So whilst this Government and this Parliament could urge it, the Commissioner could simply say, `I intend to raise that limit'. I make an appeal that that be done. I feel that many people out there who are pensioners and who do not have the financial capacity to meet the costs in the first year need to be relieved of that burden. I believe that the limit should be raised in this way or, as an alternative, that the Act should be amended to exempt from the application of provisional tax those in receipt of a pension-a full pension if it has to be, although I would like to think a pension generally-and income from interest and dividends. As I said, in 1979 it cost $15m to raise the threshold from $400 to $1,000, and the estimated cost of raising it now to $2,000 is $20m. There are 350,000 pensioners and veterans looking to this Government for relief from what I believe is an iniquitous provision. I do not think it was ever meant to catch up these people. I do not think it was ever meant to get people on low incomes and fixed incomes, and say to them, `This year, when you have earned that extra $1,000, you will be double taxed'. That is in effect what happens. We as a Labor Government have demonstrated a willingness to revamp the tax system. Full credit must go to the Treasurer and to our Minister for Finance, Senator Peter Walsh, who has had a very difficult task in ensuring that we cut back on expenditure where it is wasted and that we improve our revenue base. I give full credit to the Prime Minister because he has given the lead in these things. He has given the lead in revamping the taxation system to give justice and fairness. I suggest that the two million pension recipients in this country would agree that a mere $20m would be money well spent. I make the appeal that I have made over two years-that the provisional tax provisions that apply to pensioners who earn over the $1,000 threshold be changed. Dr HEWSON(Wentworth)(8.05) —I welcome the opportunity to address the House tonight on the Taxation Laws Amendment Bill (No. 5) and the Income Tax (Offshore Banking Units) (Withholding Tax Recoupment) Bill. I will confine my comments essentially to the area of offshore banking. I am delighted to be able to do so, as I have a long personal history of working on the idea of developing offshore banking units in Australia. This goes back to a consultancy report I wrote in the late 1970s and early 1980s for the Campbell Committee of Inquiry into the Australian Financial System in which I recommended such units. It is an issue that has received quite a lot of attention since then from the Campbell Committee; from the Martin Committee established by this Government; from a couple of State government committees, one of which, the Whitlam committee in New South Wales, I was associated with; and, finally, from the Commonwealth-State working party of the Treasurer (Mr Keating), of which I was also a member as a representative from Tasmania. The report of the latter Committee is the basis of the legislation before us tonight. I am therefore pleased that we are finally seeing, after such an elongated process, some legislative initiative in this regard, although I have to express some disappointment that it is small and will probably prove to be insignificant. I draw the attention of the House to the fact that this issue has quite often been broadened beyond offshore banking units, as it was in the case of the two State government studies, to look at the circumstances required to establish a financial centre in Australia. In those days there was some competition between Sydney and Melbourne for that purpose. Before I make some specific comments on the legislation, I would like to comment on some points made by other speakers in this debate from both sides of the House about the idea of legislation by Press release. I want to add my strength to the view that legislation by Press release is tending to get out of hand. The offshore banking issue is a very good example of that. As I think back over the history of this technique, I guess legislation by Press release started back in the 1970s in the area of tax avoidance, where there was very little alternative. The Commissioner of Taxation was having trouble documenting and legislating against a lot of tax avoidance and evasion devices and techniques, and this became the most effective way of dealing with the problem. However, I suggest to the House that those days are substantially passed and that the extension of the practice of legislation by Press release into matters of considerable practical significance can cause unnecessary uncertainty on the part of businesses and private citizens who are trying to interpret their tax liability under foreshadowed pieces of legislation. Let us look at the history of this piece of legislation in regard to offshore banking. The Treasurer's Commonwealth-State working party was set up in March 1984 and reported to him in August 1985. In July 1986, when the Australian dollar was under considerable pressure, the Treasurer announced for the first time his intention to bring down this sort of legislation. That was roughly 18 months ago. At that time he foreshadowed further consideration of the relevant legislative arrangements, which we had reported to us on 9 April 1987. Finally, the Bill itself appeared in the House in December of last year and is subject to debate at this time. I can understand why the Treasurer tried to win the confidence of financial markets in July 1986, a period when, as I said, our exchange rate was under considerable pressure, but there seems to have been an unnecessary and undue period of delay. The Government foreshadowed legislation in this area in July 1986-as the second reading speech suggests, the legislation is to be effective from that date-but the legislation was not brought down until some 18 months later. When I look back over the debate about the establishment of a financial centre in Australia and the key element of offshore banking units, my great disappointment is that we have not come nearly as far as we should have over that period. We have certainly made some substantial progress in deregulating our financial system and creating a lot of the circumstances in which we may emerge as a significant regional financial centre, but we are still a fair way short of that. If we were at this point in time to do an objective assessment of Australia and its potential as a regional financial centre we would identify a number of very strong features in support of that case. In fact, we are now almost uniquely qualified in the Asia-Pacific region to play that sort of role. We have a time zone advantage relative to existing Asian financial centres, and dealers in Australia in their day to day dealing operations can effectively link with the east and west coasts of the United States of America and with major European centres in the course of their trading day. That is a very big advantage for a centre in this part of the world. We also easily meet the basic language, accounting and legal infrastructure requirements for the development of such a centre in the international banking arena. We have a well-developed, competitive and open domestic financial system and the size of our domestic market is a pretty reasonable one by international standards. Our currency is also now widely traded in international markets and in 1987 we ranked at times as high as the fourth most significant currency in terms of daily turnover in international foreign exchange markets. As a result of a lot of the deregulatory measures, we now no longer have any exchange controls, we have very high levels of representation by foreign banks and financial institutions, I think we have a reasonably sophisticated and experienced monetary authority in the Reserve Bank of Australia and we have a fairly well-developed tax surveillance infrastructure through the Australian Taxation Office. As I mentioned before, we have also had some political support, particularly from State governments-Mr Cain in Victoria and Mr Wran in New South Wales; interestingly both Australian Labor Party governments-in trying to develop the idea of establishing in Australia a financial centre for the Asia-Pacific time zone. We can list all those facts but it obviously begs the question why it has not happened, particularly given the pace and the magnitude of some of the changes that have been made in our financial system in recent years. I suggest to the House that there are two or three main reasons why it has not happened. Most importantly, there has been a lack of will on the part of this Government to do anything about it. There is also unfortunately still a considerable amount of tunnel vision on the part of some Treasury officials as to the sort of role that such a centre could play and whether we should be part of this league or whether we should not and, of course, there is primarily the question of taxation, which is the key element of the legislation that is before us. Consider the issue of taxation. Although today we see a financial system which is now fairly free, in terms of quantitative restrictions, interest rate ceilings and so on, but we still see a very cumbersome, ineffective and inefficient taxation of financial transactions in this country. So, while we have made a lot of progress in the formal deregulatory process, there is still a significant disadvantageous effect on the pattern of flows and the development of our financial system by the nature of taxation and the way it impacts on financial transactions. We have an interest withholding tax which is still quite significant, although, as I will mention in a moment, this legislation offers an exemption from that. We have a corporate tax rate that is at a staggeringly high level, an effectively high level, by Asian-Pacific standards; we have a host of other duties at difference levels in our system-financial institution duties, a bank account debits tax, stamp duties on various financial transactions, a number of loan instrument duties and so on. In these terms then, I suggest that we have not gone very far down the offshore banking route, as this legislation deals with only one of those taxes of significance from the point of view of the development of an international financial system, namely, withholding tax, and it offers only a minuscule-I stress the word `minuscule'-exemption in the sense that it exempts only pure offshore banking transactions from the impact of that tax. They are international banking transactions among non-residents. This is disappointing at a time when much of the rest of the world is looking at the possibility of abolishing taxes such as interest withholding taxes. Do not get me wrong. I do not want to pooh-pooh the legislation completely; it is a step in the right direction but, as I have emphasised, it is very much a minuscule step. If we want to take a realistic view of taxation in relation to this question of developing a financial centre in Australia, I suggest to the House that we have to look more broadly than at our own shores. We have to put ourselves in the international context and, particularly in our case, we have to compare ourselves with a number of the competing centres, either actual or potential, in the Asia-Pacific area. Specifically, I think we should look at Singapore and Hong Kong, both of which are well established regional financial centres; we should look at Tokyo, which is an emerging international financial centre; and we should also look across the Tasman to New Zealand where plans are apparently afoot in some quarters to establish Auckland or Wellington as an offshore banking centre. When we do that we find some fairly disturbing features from the point of view of our relative competitive position. As far as offshore or international banking transactions go, both Singapore and Hong Kong substantially are without interest withholding taxes. Japan has significant exemptions, in its offshore banking market, from interest withholding taxes. Indeed, it is interesting to compare the growth of Singapore and Hong Kong, as two specific examples, in the late 1960s and early 1970s. It is significant to recognise that Hong Kong did not initially relax interest withholding tax in relation to these banking transactions and Singapore did. As a result in the early stages the Asian dollar market was located in Singapore and not Hong Kong. As I understand it, Hong Kong has subsequently recognised the error of its ways and has done something about those interest withholding taxes. If we look at the corporate tax rates-some of my colleagues on both sides of the House mentioned these in earlier debate-we still see that we are at a significant disadvantage. Effectively, Hong Kong has a corporate tax rate of about 18 per cent; in Singapore it is about 33 per cent, compared with our 49 per cent. In fact, in Singapore there is a concessional profits tax on offshore banking business of only 10 per cent. If we look at Tokyo and if we look at distributed income we see the corporate tax rate there is 33 per cent, and on undistributed income 43 per cent. Of course, a number of people have mentioned New Zealand and the fact that it is about to establish a corporate tax rate of 28 per cent. In effectiveness terms I suggest that our excessive corporate tax rate is probably the principal reason why we have not emerged as a financial centre in the Asia-Pacific region. For some reason there seems to be a blockage in the thinking of both this Government and the Treasury about the issue of taxation of financial transactions. We have read or have had trotted out to us on a number of occasions fairly spurious arguments in support of their position. A standard Treasury argument which appeared in the report of the Martin Review of the Australian Financial System to some extent and also in the findings of the Treasurer's working party on offshore banking was that if we change the tax structure in relation to international banking in Australia we may divert resources from other activities when they are more efficiently utilised. This is generally the sort of argument that we hear from Treasury. It is a great furphy which is based on some fairly special academic theoretical assumptions that do not necessarily carry much weight or hold water in our very imperfect world. Of course, the fact remains that we could actually attract resources to Australia from the rest of the world if we were to adopt the appropriate taxation structure. We also quite often hear stories coming from Treasury that we should not unnecessarily subsidise particular industries or activities, which always makes me baulk because we already subsidise so many industries or activities in Australia in one way or another. But even if a correct view, this would not work against the logic of simply cutting the corporate tax rate across the board. I would also recognise that on occasions governments have used differential tax rates to stimulate particular sectors and particular activities for other than economic reasons, in particular social or political reasons. I suggest to the House that our existing taxation structure is counterproductive to the development of an international financial centre in Australia; it discourages the development of that centre. Quite often we also hear the argument from Treasury officials and others that we will forgo revenue if we give up some of these transactions taxes. The fact is that a lot of these transactions are being organised in Australia but they are not taxes being booked here or are not being done here at all, because of the nature of our tax regime. So it is not certain, when we free up that regime, that we will not stimulate more activity and thereby increase our tax revenue, rather than lose it. I suggest in fairly crude terms that if we get 10 per cent or 20 per cent of something it is better than getting 49 per cent of nothing, which is essentially the current situation. We often also hear concerns expressed by the Commissioner of Taxation about the possibility of this sort of market and proposed taxation arrangements furthering tax avoidance. It is a serious problem and not one that we want to treat lightly. But I suggest to the Commissioner that there is quite a lot of international tax management beyond the purview of the Australian taxation authorities at present and I am not sure that the development of an offshore banking centre in Australia would make avoidance any worse; indeed it would probably make it better. If the Commissioner is on his toes he would be able to establish a tax surveillance network which he does not presently have or a better one than he presently has. The final argument we usually hear is that we have missed our chance in establishing a financial centre in Australia. Singapore and Hong Kong are really well established, Tokyo is opening up and we will be very much Johnny-come-latelies to this business. It is the same argument as people used against financial sector deregulation as a whole and I do not think anyone would dispute the benefits of that process today. It is also the same argument used five or six years ago about competing with Singapore or Hong Kong. I suggest to the House that we should consider what has happened to those two financial centres in recent times. There is no time like the present to further our endeavours in this regard. Take Singapore for example. A lot of the gloss of that country's early success has now been lost in the aftermath of what has been a fairly poorly managed economy. The exchange rate has been held at an overvalued level and the monetary authorities have been unbelievably intrusive in dealing with international financial transactions. And there is always the possibility in the future of political instability in that country associated with the transition from Prime Minister Lee Kuan Yew to whomever it may be, even if it is his son. Others may argue that Hong Kong is extremely well established and that we will not be able to take away any of its competitive edge. But the future of that country is not clear either. The uncertainty about the lease in Hong Kong remains. We do not know what will happen when sovereignty passes to the Chinese in 1997. Also anyone who wants to see how strong Hong Kong is today in the post-stock market crash environment should visit that city which has been really shaken as a financial centre as a result of the crash. Finally, the issue is not simply one of whether or not we are competitive. In theory-if correctly stated-an additional financial centre in the Asia-Pacific region can be a plus anyway as it deepens the inter-bank market and enables a greater spreading of risk in this region. So, to summarise, I welcome the pieces of this legislation that relate to offshore banking and the fact that there is an interest withholding tax exemption to encourage the development of this sort of transaction in Australia. But as is so typical of this Government, it is far too little far too late in terms of getting us on the way to being a significant financial centre. We can easily be a significant financial centre in the Asia-Pacific region but this calls for considerably greater political will than we have seen from this Government, a much greater commitment to a rationalisation and improvement of the tax structure and, in particular, a lowering of the corporate tax rate by this Government. I am fascinated by the number of occasions on which I have heard senior Ministers of this Government lecture us all about the need to diversify our export base and to develop service sector exports and so on. Here is a unique opportunity in the financial sector to develop alternative exports. I think it just calls for a more realistic assessment of what needs to be done in order to achieve that result. I look forward from today to a situation where, if the appropriate taxation policies are adopted-and I am not talking about wildly concessional ones which will benefit a few, but appropriate restructuring of taxation-there could well be at the turn of the century two major financial centres in the Asia-Pacific region. Those two centres could be Tokyo, which is moving quite quickly towards that objective at the Northern Hemisphere end of the Asia-Pacific region, and Australia at the bottom end with both Singapore and Hong Kong being markedly less significant centres as we look forward over that sort of time horizon. But this will not happen on its own; it will not happen unless the Government overcomes its blind spot on genuine tax reform. I was fascinated to hear a number of speakers tonight-we have consistently heard this-talk about what a great tax reformer this Government is. In fact, one of the speakers said that they are probably the greatest tax reforming government in the history of the world. I suggest to the House that that is absolute nonsense. I refer the House to what happened in 1985. A unique opportunity in the political and economic circumstances that existed at that time to reform taxation was squandered by this Government which demonstrated its inability to come to grips with genuine tax reform. All we got was more taxes, new taxes and a higher overall tax burden. That sort of attitude and mentality, carried through to the financial system, will ensure that Australia does not reach its full potential as a significant financial centre in the Asia-Pacific region. Dr CHARLESWORTH(Perth)(8.24) —I must say that I think the House is better for the very thoughtful contribution from the honourable member for Wentworth (Dr Hewson) who, of course, is acknowledged for his expertise in this area. However, I would say to him that if he believes that 1985 represented a unique opportunity for tax reform in this country, he has a very short memory. The events of 1985 were precipitated by this Government and significant tax reform resulted from the Tax Summit. I would say that probably 1979, when the Fraser Government had the huge advantages of the oil price shock and a significant majority in both Houses of this Parliament, represented a much better opportunity for tax reform. But this opportunity was passed by. I also find it amazing that the honourable member should stand in this place and, at the same time as talking about the speed of change, criticise the Government for the use of Press releases for announcing changes within the tax system. I would think that if we waited for legislation to pass through the Houses of the Parliament we would be waiting much longer for change. I find some inconsistency in the arguments of the honourable member who comes from and represents that side of the House which was notable for its lethargy and immobility in tax reform during its last seven years of government. Of course, the Opposition's spokesman on taxation matters, the honourable member for Kooyong (Mr Peacock), got up and said, predictably, that this is the highest taxing government in the history of Australia. I always wonder when I hear that said, what in fact people mean. Of course, next year if there is economic growth the Government will be the highest taxing government. The year after that, if there is economic growth, the Government again will be the highest taxing government. I really think rather superficial terminology is used in this respect. What is important is that in 1985-86, 1986-87 and 1987-88 there was a significant fall in outlays, something which has not traditionally occurred in Budgets in this country. Indeed, this is an example of the fiscal responsibility that this Government has been able to show. Of course, the most masterful contribution to this debate came from the honourable member for Bruce (Mr Aldred) who said very correctly and sensibly, when talking about an article which appeared in the Canberra Times today, that the nominal rate of tax was not the actual rate of tax which was paid. The honourable member was correct in saying that. He made the point that some companies in this country pay very reasonable rates of taxation and others generally seem to pay very small amounts of taxation. That, of course, is related to particular circumstances which arise from year to year-perhaps the debt burden, the nature of activities or losses in a particular year. The honourable member for Bruce made the very mischievous suggestion that the companies which paid the lowest amounts of tax were under the control of friends of the Prime Minister (Mr Hawke), and that in some way the Prime Minister and his mates were benefiting from the inequities of the system which had been put in place by this Government. Of course, that is absolute ridiculous nonsense. Indeed, if one looks at the list of lowest tax paying companies one finds mention of Elders IXL. I suppose the suggestion is that in fact John Elliott is in some way a friend of the Prime Minister. If he were a friend of the Prime Minister, there is no way in which he would be undermining the Leader of the Opposition (Mr Howard) at the moment because it would be in our interests for him to be secure in his position. Indeed, the activity in which Mr Elliott is presently involved would not be occurring. I found it even more amazing that, having said that the nominal rate is not the actual rate, the honourable member for Bruce then moved on to the circumstances that exist in England and the United States of America in terms of the nominal rate of tax that exists in those countries. The honourable member made no mention of the consumption tax that is imposed in the United States or other factors that operate. If it is the case that the honourable member for Bruce sees the Thatcher Government as being a model of fiscal responsibility and tax reform, he should have sat with me a few years ago when I saw Margaret Thatcher arguing for a fringe benefits tax, for an entertainment tax and for an end to the free lunch. While I may not be a philosophical supporter of Margaret Thatcher's views, her consistency and her philosophical integrity are things which are not seen in the Opposition in this place. It is all very well to compare ourselves with the United States, but the honourable member for Bruce should go to people in his electorate who are suffering from chronic disease or who are in need of health care and say, `What we want is a tax rate consistent with that which exists in the United States, but unfortunately you are going to have to pay massive amounts for health care over a long time'. Here again, the philosophical integrity of members of the Opposition is strained. The Taxation Laws Amendment Bill (No. 5) 1987 and the Income Tax (Offshore Banking Units) (Withholding Tax Recoupment) Bill 1987 give effect to a number of Government policy decisions announced during 1986 and 1987 and amend the Income Tax Assessment Act 1936. The measures include encouragement of the development of offshore banking in Australia through the withholding tax exemption for interest paid to non-residents by the offshore banking units. In his exposition the honourable member for Wentworth covered very fully the need for these changes. Additionally, these measures provide for capital gains tax roll-over relief-that is, deferral of liability for certain reorganisations of resident unit trusts. The Bills also contain measures announced in January 1987 to amend the law relating to tax on lump sum superannuation and kindred payments. These measures are to remedy shortcomings in the law which have been exploited in order to defeat the Government's objectives in the retirement income area. In the retirement income area the Government's direction has been to discourage people from taking lump sums which are then spent or frittered away, thus causing those people to become social security recipients. Of course, there are a number of other amendments contained in the legislation, including the removal of special concessional treatment for expenditure on building for scientific research and other research and development purposes. All these measures are directed to the use of revenue in a more productive and innovative way. What can be said about this legislation is that it gives further effect to the tax reform program that the Hawke Government has undertaken. It gives further effect to increasing the fairness, equity and efficiency of our taxation system. The need to distribute the burden more equally and the need for investment to be more productive and efficient is recognised. It has been said many times-and I well remember the debates on the entertainment tax-that our restaurant industry would be destroyed by the Government's initiatives in that area. Yet year after year we see increasing numbers of people being employed in that area. We heard that the motor vehicle industry needed to be underwritten by the fringe benefits tax, but our initiatives in that area and, indeed, the improvement of the substantiation requirements have allowed for fair deductions. However, for those who were taking unfair advantage there is some sort of necessary scrutiny of their activities. Indeed, as a medical practitioner, I thought it absolutely absurd that one should be able to claim as a tax deduction 100 per cent of one's motor vehicle use plus a percentage of the vehicle use of one's spouse. Those sorts of rorts have been removed. Of course, the tax reform program of this Government has been fairly wide ranging, but it is Opposition members who, after 7 1/2 years in government, left us with a rate of 60c in the dollar. Yet in this debate they have been saying how terrible it is that the rate should be 49c in the dollar. After 7 1/2 years and every opportunity to reform taxation in this country, with some windfall benefits and opportunities because of a majority in both houses of Parliament, these people did not take that opportunity. Many of the decisions taken by this Government were not easy and were not particularly popular. The tax on lump sum superannuation was a long term measure that we believed, over time, would change the emphasis in that area. Indeed, it was not popular; but the Government took it on the chest and made that decision. Our initiatives with the fringe benefits tax, capital gains tax and the entertainment tax-those base broadening measures that we undertook-were not rabbit-in-the-hat measures; they were long term moves to change and broaden the base of taxation in this country. For the business community there was full imputation and removal of double taxation on dividends, freeing up of the financial institutions, freeing up of the financial sector, the entry of foreign banks and the floating of the Australian dollar. All these initiatives, many of them not easy decisions, are part of the mosaic of tax reform that this Government has undertaken. But the Opposition continues to be populist. The latest figure that it is talking about is $11 billion worth of spending cuts through the 1990s. In the House yesterday we heard the Prime Minister challenge the Leader of the Opposition on his figures. The Leader of the Opposition is denying it but once again, as in the election campaign in the middle of last year, we have talk of massive cuts in expenditure but no details. One only has to remember the election platform of the Liberal Party of Australia seven months ago, the approaches made to the electorate, the changes that it was going to bring about but, unfortunately, what we had were unfunded tax cuts and spurious expenditure cuts which were never identified. John Elliott, whom I have mentioned earlier in this debate, said that the Liberals did not deserve to win; that they were not ready to win. Indeed, the dazzling array of promises that we heard, the tax cuts which we could not afford, all the problems that these may have brought and the huge credibility gap that was discovered in the Opposition's policy brought about its defeat at that election. The latest endorsement by the Opposition is even more interesting because of the present situation in which we find ourselves. On AM on 11 February the Leader of the Opposition generally endorsed the New Zealand tax package-a shining and superficial package, I suggest. In that program John Howard clearly endorsed the general thrust of that policy and said: I . . . repeat that we were going precisely down the right track last July in the taxation policy that we presented, and what has happened since has validated that approach and has made the criticism of that policy by the Government and many people in the media wrong. He is saying that the path taken by New Zealand is the path that he suggested in July last year; indeed, that the policy approach that was taken by his Party at that time has been validated by the moves in New Zealand. Let us look at the elements of the New Zealand package. We find the cancellation of deductibility from personal income tax of donations to charities-something, I imagine, that would be very popular in the electorate! I am sure that all those people working for voluntary and charity organisations would be interested to know that these are ways in which the Liberal Party will be funding future tax cuts. Other measures are the taxing of income received by charities on their own investment, a 24 per cent tax on employer contributions to superannuation funds and a 25 per cent tax on earnings of those funds. With the debate on superannuation continuing, the Leader of the Opposition has endorsed tax cuts for business funded by increased superannuation charges for employer contributions and for the earnings of those funds in New Zealand. There are also tougher substantiation rules in New Zealand and, again, all we have heard since the introduction of fringe benefit tax is how terrible the substantiation rules are. In New Zealand the substantiation rules are tougher, yet they are being endorsed by the Leader of the Oppostion. Last on the list, but perhaps most important, is a 10 per cent consumption tax in New Zealand. Is it the case that once again the Leader of the Opposition will be pushing that barrow? Australia is in a critical process of adjustment. We cannot afford the populism of the Opposition; we cannot afford the costs of the Opposition's promises. If it is going to cut revenue, cut rates, abolish the assets test, cut out lump sum tax on superannuation, abolish the fringe benefits tax and bring back the free lunch, it has to say how it will do it. If it is going to introduce the consumption tax, it should let us know about it. If there are to be massive expenditure cuts, let it tell the pensioners what will happen to their pensions. If there are to be decreases in education, health and other areas, it should say so. If it will not say so, what it is saying is nonsense. The situation will be as it was in July last year, and as it always is-the sums do not, and will not, add up. If the Opposition is going to offer-as has been offered in New Zealand-decreases in business tax, funded by a 10 per cent consumption tax, we need to know. If the Opposition, is to offer decreases in business taxation by taxing superannuation contributions and funds' profits, let it say so. But let us not hear Opposition members bleating from the other side of the House about what the Australian Labor Party might do when, at the same time, they are endorsing proposals which are occurring in New Zealand and which contain many of those measures. The measures that the Government has introduced in this Bill give effect to a vast mosaic of tax reform; the Bill provides for reform which is fair and just. Until the Opposition can provide a credible alternative, it will have scant respect in this place or outside. Mr TUCKEY(O'Connor)(8.40) —I frequently refer to this as the Government of self-congratulation. I was at pains last night to point out to those assembled in the late hours of the adjournment debate how those on the Government side will have to raise a few more self-congratulatory messages to themselves because of the loss of some of their more hardened campaigners in the disasters of the last two days. They had better start telling themselves they are the operators they have claimed to be for so long. The House has just heard the honourable member for Perth (Dr Charlesworth) go through this process of self-congratulation. Indeed, he had the temerity to suggest to this Parliament that perhaps the Liberals should tell more. I do not know whether he was here at Question Time today when the Liberals asked a simple question of the Prime Minister (Mr Hawke), a question that now concerns millions of Australians who, quite properly, reserve some of every week's pay to invest in their retirement through superannuation. We put a simple question to the Prime Minister requesting him to tell Australia-not just the Opposition-what he intended to do to those people. After two attempts we got a non-answer-we got a nothing from the Government. Yet the honourable member for Perth has the cheek to suggest that apparently the Opposition should do something first, that we should relieve the fears of the people and say that our policy is such and such. The honourable member is stretching the bow too far. The reality is that a Labor Government has taken this step in New Zealand, and if we were to criticise it the honourable member for Perth would be one of the first to jump to its defence, for political reasons only. We heard a remarkable statement from the Prime Minister today-even more, or perhaps even less, remarkable than the fact that he came into the Parliament and got himself into trouble after Question time by linking himself so closely with the problems of Senator Tate. Perhaps that is about time, because one would think-- Mr DEPUTY SPEAKER(Mr Mildren) —Order! I ask the honourable member for O'Connor to stick to the terms of the legislation before the House. Mr TUCKEY —Certainly, and that was exactly what I was talking about. I was referring to the Prime Minister's inability this morning, and to the uncontested remarks of the honourable member for Perth about superannuation. The Prime Minister says he will not tell, and will dump Barrie Unsworth on the issue; Barrie's protestations will not be heard. We got the message from the Prime Minister's non-answer. The message is that there is to be an attack on superannuants, most probably the fringe benefits tax will be extended to tax employers even further on the benefits they grant to employees to assist them in retirement, and there will be a retrospective extension in respect of lump sums. Even this legislation, the Taxation Laws Amendment Bill (No. 5), deals with the matter of superannuation. It further tightens the screw in a number of areas. It extends the disincentive for people to invest in their retirement with their own money earned every week. Further, it will create problems for youth and young people in our community when it falls to them to support people. They will simply throw their hands in the air and say, `Why should I bother? Why should I go without today with the prospect of a more positive and more secure retirement when the evidence is that I cannot trust the Government to leave me with any of the money anyway?'. Clauses 16, 17, 18 and 19 of the Taxation Laws Amendment Bill (No. 5) will lead to a tightening of the screw. The Prime Minister is also the managing director of Australia and is responsible and answerable in these areas. But today he refused point-blank to give an answer. Government back bench members-who have little say in this matter because they get these things served up to them from their executive and who have lost control of Caucus that was once theirs-come into the House and say, `The Opposition should tell us what it intends to do'. What a load of rubbish, when the Government itself refuses to tell the Australian people how they should invest their money and to relieve their anxieties in this area. It is remarkable that a Prime Minister, by saying nothing, can say so much. The message today is very clear. Superannuation will retain some concessional treatment. We could not know how much until the May statement is delivered, but I am afraid that the Australian people will have two or three opportunities between now and then to cast their opinion on that sort of answer in this place. I predict that it will be another Adelaide. These Bills are about tax, deal with a multitude of bandaids to the tax system and address the problems principally in legislation only recently introduced. One would have thought that the Government could have got the legislation right the first time around. This legislation also addresses problems which have been identified by the Opposition. It is tax, tax, tax. Frequently debate in this place, as reflected in the remarks of the honourable member for Perth, turns to how we are taxed. The honourable member wants to raise the spectre of a consumption tax. I imagine that that is pretty likely on a Labor agenda when one remembers that the Prime Minister recently promised that we would not have one. One thing I pray for, particularly in the area of taxation, is for the Prime Minister to tell us that we are likely to have a tax, because anything that he promises we are most unlikely to get. When he tells us that we are not to have a particular tax, we can almost rest assured that it will be a certainty. We keep getting told about tax and how good this Government has been in that respect. This is the government of self-congratulation which is constantly distancing itself from the Australian people. I have before me the Budget Estimates, and I find that this year the Australian people, through pay as you earn tax deductions, are expected to contribute $32,655m. I know that the 1.25 per cent medicare levy will raise $2,065m. We were promised that it would never exceed one per cent. We were also promised that that levy would pay in full for the expenses incurred. However, we now find that the expenses are $5,212m, the equivalent of a 3.15 per cent levy. It is pretty easy to see that in the May mini-Budget we will also be told that the figure is to increase so that the Treasurer (Mr Keating) can continue his now honourable attitude of balancing Budgets-after he has incurred a debt of $25,000m, using our kids as security, and bumping up the interest charges in the Federal Budget from $3,000m-odd to nearly $8,000m. Mr Campbell —What sophist nonsense! Mr TUCKEY —The honourable member for Kalgoorlie obviously does not read the figures, and if he could he certainly could not add them up. The point is that when we look at these taxes we find that sales tax is now over $7,000m and fuel taxes are over $7,000m. As I explained to a group of pensioners today, if they think that they are getting their various benefits free from the Government, they had better stop buying tinned pet food for their pets, because there is a 15 per cent sales tax on that item. Some of that money they receive from government goes straight back into the coffers. Earlier in the debate honourable members heard the honourable member for Capricornia (Mr Wright) shedding a few crocodile tears for the pensioners. No doubt he will circulate his remarks at length in his electorate. What a lot of crocodile tears they were. I hope he will have the courage to write across the bottom of any such document, as might the honourable member for Kalgoorlie when he makes some of his more outrageous anti-Labor statements, that he is subject to Caucus rulings, and that if the pensioners are suffering it is because of what he and his colleagues have done. To suggest that he cannot change the situation is to suggest that he should resign because he has obviously failed in his duty to the people who had sufficient faith to elect him. Writing letters to the Bulletin, as the previous interjector did, and then coming in here and voting to give the Aboriginals Ayres Rock is not consistent, and consistency is something that Australians are anxious to get from their politicians. When we get to the bottom of the column of taxation revenue we find that this year $71,243m will be raised in tax revenue by this Government. That compares with $44,000m in the last Fraser Budget. And this is the Government of low taxation! As I have said, the legislation before us tonight is primarily concerned with tightening the screws in many areas and getting in those extra few million dollars that the Treasurer suddenly discovers he has missed out on. Other comments were made by the honourable member for Perth to which I should refer. He boasted of full imputation. I take `full' to mean that everybody gets it. The business community is finding that the complexities of gaining imputation with franked dividends and other activities is not a piece of cake, and people are discovering that large amounts of company profits are still subject to taxation in the hands of the shareholders. Reference was made to the Government's wonderful decision to float the dollar. The Government came to office in 1983, and one could scour its policy from end to end without finding any reference to floating the dollar. The Government never thought of it. In fact, had it thought of it, it would have thought it a scandal. It was regulatory and it was not going to do it. To suggest that it was done as part of a grand master plan, carefully thought out by this Treasurer, is absolutely foolish. It was done in response to the pressures of the international monetary markets. The Government tested the markets and found that it could get a 10 per cent devaluation overnight, and six months later it was at it again. The Treasurer and his Prime Minister decided that the simple solution was to throw the markets the ball and let them play with it themselves. It is time this Government of self-congratulation was prepared to stand up and tell it as it is. It eventually achieved the desirable result in floating the Australian dollar, but to suggest that it was any part of a grand plan, as possibly Roger Douglas could-although I see that his Prime Minister is interfering somewhat with his grand plan-is foolish. At least Roger Douglas in New Zealand can say that he came to office with a plan and he has been implementing it. Of course, the Treasurer is a reactionary. He does things on the run, and he is getting short of money again. It is nice to be able to balance a Budget when one has control of the turnover, when one can increase the take and not reduce the expenditures, as would occur in any family or small business budget, where clearly one does not have control of the turnover. It is nice to think one can go out and tell the Australian people that more money is wanted and then give them silver tongue explanations as to why it is in their interests. It is always said that they will get something back, but people are finding that they are getting less and less back and paying more and more. It is a disgrace. I think it is time we accepted that the tax laws of Australia have some limit on the Government's share. It is worth noting in terms of government revenues that in 1950 the governments of Australia managed to run this country on 15 per cent of gross domestic product-15 per cent of our national productivity. Those governments took people's income in January and February and it left the rest to them. Today those governments collectively are taking nearly 44 per cent. In other words, we are fast approaching the point where we have to work six months of the year for the Government before there is any return for ourselves. That is a disgrace, and it is something that has to be reversed. It is not right for the honourable member for Perth and others to scoff at an Opposition that goes to the people and says: `We will accept the discipline of lower revenue. Yes, we will have to make some decisions about where we will not spend'-take it from me, there is plenty of fat in that system-`Yes, we accept that some of those decisions, although they might put $7,000m or $8,000m of discretionary spending in your pockets, will remove some benefits, but in the same breath we will give all of you the chance to make some discretionary decisions as to how you might spend that money instead of having it dictated to you by government, instead of telling you that you will stay in a queue to get into a public hospital because the Government has a monopoly on that. Unless you have the additional financial resources to pay the levy the Government imposes on you at 3.15 per cent, unless you are one of a very fortunate group of Australians who can find another $1,000-plus a year to guarantee instant access to a hospital when you are sick, then the Government dictates that you will wait'. Take it from me, those queues the Government tries to explain away are not explained away by Senator Walsh, the Minister for Finance. He sees them as a necessary part of containing Government expenditure. There is no choice in this matter. There is no saying that one can make a decision about one's health. The Government has assumed that responsibility upon itself and left Australians with no choice at all if they happen to be some of those poor people who have so diligently voted for the Labor Party over so many years. Why are half of them poor? They are poor because the Government takes too much money from them in tax-43.4 per cent by one means or another. We had representatives of pensioners in the Parliament today complaining bitterly about their treatment from this Government, and again putting down the myths that this Government tries to create. It was the honourable member for Capricornia, as you may remember, Mr Deputy Speaker, who brought to the attention of the House in this debate the plight of pensioners. In a submission given to me today the pensioners say that 8 per cent of nothing is nothing, that there has been a persistent claim that the value of the pension has risen 8 per cent above inflation during the period of the Hawke Government and that these claims are false. That is the point. It is typical double counting. It is a typical misrepresentation of figures, as occurs in so many of the Government's tax calculations when it tries to convince Australians that they have never had it so good. It is typical of its defence of the institution of Medicare when, in fact, individuals are suffering. This is the problem for this Government. This is the problem that Australians have worked out for themselves. This is why the Government is getting 20 per cent swings against it in hard core Labor voting areas. It is its hard core constituency that is hurting most. It is hurting from the Government's sales taxes. It is hurting from its indexed excises. The working man's pleasures can be restricted in many cases to a few drinks at the pub and a drive in the car on Sunday, but the Government indexes those two simple enjoyments. The hotel and bottle shop industries now tell us to be ready for another $1 increase in the price of a carton of bottles or cans. These are the taxes and these are the problems. It is the Government's constituency that suffers from the Government's desire to have more and more money in its hands. It is about time that we woke up to this. As I said, the message of the electorate will be sent through the various by-elections. Certainly, the message in the New South Wales election is that people know. They have a simple calculator-it is called a wallet, and there is nothing in it. People are becoming aware who has it and who is wasting it. These are the problems the Government has. It is amazing that the speaker who looks like following me, who was jumping up and down a few minutes ago, finds it necessary in his electorate to present an entirely different view of what he stands for and what the Labor Party stands for by comparison with the way he votes in this place. The examples are becoming more and more numerous all the time. He knows that if he is to remain in office his electorate will not accept the policies that exist. Mr Campbell —Why don't you try to get back on the council at Carnarvon? Mr TUCKEY —That was Senator Walsh's great mistake a little while ago. At taxpayers' expense he sent his Press officer all the way up there. Why did he not come back with something? If the honourable member wants to table the senator's file, I challenge him to do so under parliamentary privilege. He will not do so because he does not have anything. Mr Campbell —It will show how shonky you are. Mr TUCKEY —Let us talk about the honourable member's sheep stealing and then we will both get on to it. I might just produce the proof. Mr Campbell —Happy to. Mr TUCKEY —The honourable member should not interject on things that he cannot prove because he might get a lesson. He goes out into his electorate and tells people that he is anti-land rights, and he writes letters to the Bulletin and he votes in here to give Ayres Rock to Aborigines. I can prove that from the Hansard. That is the type of individual we have here. He gets in the pubs around the Northern Territory. We know how he talks. We hear about his racist statements. They are all for consumption in his right wing Labor electorate because he comes back here and votes in the opposite way. At least I had the courage to cross the floor against my Government when we were in office. The honourable member will never do that. Mr DEPUTY SPEAKER(Mr Mountford) —Order! The honourable member's time has expired. Mr CAMPBELL(Kalgoorlie)(9.01) —I did not intend to speak in this debate, but the honourable member for O'Connor (Mr Tuckey) incited me somewhat. Interestingly, today I spoke to a member of the National Party of Australia, who has done some socially useful work of late, in respect of the Australia Card legislation and the enormous misinformation that was put out by a Peter Sawyer. I said that I had attended a public meeting in Geraldton, which is in the electorate of the honourable member for O'Connor. He tried to have it both ways on that issue. He said to me, `Yes, I am afraid that Wilson Tuckey greatly distorted this issue'. That is the honourable member's hallmark-the great distortion. The truth is that I do not have a particularly right wing Labor electorate. Mr Tuckey —On a point of order, Mr Deputy Speaker, I call upon the honourable member to name the National Party person who said that to him. We will see whether he has the courage to do so, or whether it is a figment of his imagination. Mr DEPUTY SPEAKER —Order! There is no point of order. I ask the honourable member for Kalgoorlie to return to the legislation. Mr CAMPBELL —Mr Deputy Speaker, I thought that I would at least be given the same licence that the honourable member for O'Connor was given. He hardly touched on the legislation. Mr DEPUTY SPEAKER —Order! That is not correct. I listened very carefully to the honourable member for O'Connor and I drew his attention to the legislation before the House. Being a taxation measure, the debate is fairly wide-ranging. I listened carefully to what the honourable member for O'Connor said and I will do the same with the honourable member for Kalgoorlie. Mr CAMPBELL —Mr Deputy Speaker, if you will allow me the same licence, I will be very grateful. The honourable member for O'Connor attacked the honourable member for Perth (Dr Charlesworth), who I thought made a very worthwhile contribution, as did the honourable member for Wentworth (Dr Hewson). Obviously they had put a lot of thought into it. The honourable member for O'Connor attacked this Government in his usual style. He talked about imputation. Does he think that the whole thing is imputed? The fact is that under the Liberal-National Party Government there was no imputation at all. Imputation exists now, the legislation for which, I think, covers most cases. It is a very good piece of legislation. There are some exceptions to that which, quite clearly, there should be, but by and large the legislation is a great advance on what was offered by the previous Government, which did nothing for years and years. The honourable member for O'Connor said that the Government floated the dollar because it knew that it would get a devaluation. My recollection is that when the Government floated the dollar, initially the value of the dollar went up and not down. That is an illustration of how selective the honourable member's recollections are. Floating the dollar was a very sensible thing to do and it should have been done by the previous Government years ago. It is the basis on which a lot of our economic advance has been made. The honourable member belaboured us about the current account deficit which is probably the greatest problem facing Australia today. The current account deficit was caused almost entirely, although not entirely-there are areas of which I am critical-by the movement of the terms of trade against us. Had we the same terms of trade that Malcolm Fraser had a year before we came to government, we would have had an enormous surplus. We inherited that cyclic situation with which countries totally dependent on the sale of raw commodities are often faced. This Government is the first government ever that has tried to do something constructive about moving us away from total dependence on primary industries. That is a long process and it will take years and years for it to be achieved, but at least this Government is making an effort in that regard. I get sick to death of people saying that the taxation system impedes progress. The other day I spoke to Senator Crowley, a very good senator for South Australia. She told me of the problem of a young Greek couple who went to her with an invention of world-wide significance. It is a very simple invention but it has multi-million dollar applications. The couple had had an offer from overseas of $6m or $7m for the patents on the invention, but Senator Crowley suggested that they should consider manufacturing it in Australia. They agreed. However, they ran into enormous difficulties with Australian industry because it simply could not perform. It made promises but could not perform to make that relatively simple article. The failure to meet deadlines and export orders, promises that dyes would be ready but which were not and all the management bungling that one could imagine meant that that couple was greatly embarrassed. Through their own initiative, they developed that instrument. That is an indictment of the management capability of the injection moulding industry in South Australia. I hope that that situation will be resolved. The honourable member for O'Connor tells the world that I have been hypocritical. I think that, of all my faults, that is probably the one that I am most careful to try to avoid. I have never said one thing on one area and the opposite elsewhere. I think that I have been entirely consistent and I intend to continue to be. I might also say that I do not believe that my policies are in any way un-Labor. I do not approve of the New Zealand system. I think that it is particularly hard on low income earners. The new regime will tax donations to charities. Mr DEPUTY SPEAKER(Mr Mountford) —Order? I ask the honourable member for Kalgoorlie to come back to the system being debated in this House tonight rather than the system existing in New Zealand. Mr CAMPBELL —I am responding to what the honourable member for O'Connor said. Mr DEPUTY SPEAKER —No. I ask the honourable member for Kalgoorlie to return to the legislation before the House. Mr CAMPBELL —I am comparing the legislation before our House, which I think is a move in the right direction, with what occurs in other places. As you have said yourself, Mr Deputy Speaker, taxation Bills are, by nature, wide-ranging. New Zealand proposes to tax the profits that charities make. It has also introduced very tough substantiation clauses. I have suffered excessively as a result of the substantiation measures introduced by this Government. I find it very hard to keep enough detailed records to satisfy the Australian Taxation Office. That probably costs me $9,000 a year, which I am not happy about. In New Zealand it is even tougher. Yet the Leader of the Party of the honourable member for O'Connor endorses New Zealand's taxation system. He said that he agrees with it; that it was very much like the policy he put forward to the people of Australia before the last election. It is now officially on the record what the people of Australia thought about that policy at the last election. We heard some heartbleeding stuff from the honourable member for O'Connor about pensioners feeding their cats on tinned pet food and how there was a 15 per cent tax on it. The reality is that many pensioners, having lived a long time being sensible, buy cheap meat from a butcher. It is the convenience market that goes for the pet food-families with two incomes and those prepared to pay extra for convenience. If the honourable member for O'Connor had his way-if his plans were introduced-pensioners would be eating cat food and then, of course, there should not be a 15 per cent tax on it. It is quite sickening for the honourable member to come in here as the friend of pensioners. If one talks about hypocrisy, that must take the cake. The honourable member said that we try to tell the people of Australia that they have never had it so good. That is not so. This Government has made it plain that it is aware of the pain that is being suffered by the working class people of Australia. We know that that pain, that drop in living standards, was essential to reforming the economy which we, as a government, inherited-that $9 1/2 billion domestic deficit that we were told did not exist. I think that most people in Australia recognise that this Government has done a good job in putting the economy back into shape. There is some concern in the community that the burden is not being shared equitably. One hears people like Alan Bond and the President of the Liberal Party complaining about the level of company tax and urging that we adopt the American system, which I understand has a 25 per cent company tax regime against our 49 per cent. But in America companies do not have any way of reducing it; they pay a flat 25 per cent. If one looks at John Elliott's contribution, one sees that Elders IXL paid less than 10c in the dollar and Alan Bond's Bond Corporation, one of the bigger corporate taxpayers, paid 11c in the dollar-substantially better than they would have paid under the American regime. The Government is aware of this, and its new family legislation to help the low income family is milestone legislation which will come to be appreciated by low income earners as one of the most decisive actions taken by any government. That is the sort of thing that will make it very hard for the honourable member for O'Connor to sell his perverted nonsense to the electorate at large. The honourable member should also bear in mind that he continually is elected to his seat purely by the courtesy of the Labor Party. He holds that seat by the goodwill of the Labor Party and, if it ever seriously decided to unseat him, a National Party member would hold that seat. In the past, I have urged the Party not to take that course of action because, like the Leader of the Opposition (Mr Howard), the honourable member for O'Connor is one of the best things we have going for us. I had not intended to speak on the Bill and I thank the Chair for its indulgence. I will be happy to sit down. Mr WILSON(Sturt)(9.12) —I want to use the opportunity of taking part in this debate to look at two aspects of our taxation law. One is the way in which this present Government has increased the level of taxation paid by ordinary Australian taxpayers, particularly ordinary Australian taxpaying families with dependent children. Secondly, I want to spend some time looking at the whole question of tax concessions currently available for superannuation and the alarm that has been caused by actions of the Prime Minister (Mr Hawke) and his Government in unsettling people who are approaching retirement age and who do not know what action to take. Firstly, to turn to the way in which this Government has taxed Australian families: two years ago, in 1986, the Treasurer (Mr Keating) came into this House and announced a tax package which, he said, would make fundamental changes in the Australian taxation system. Changes it made, but equity it did not achieve. In fact, the system was made more inequitable as a consequence of the Labor Party Government's tax reforms. Let us look at some of the facts. When the Labor Party came to office the spouse rebate for a family where the spouse was dependent and had in her care dependent children was $1,030. In 1988, under the Labor Party tax policy that spouse rebate is still only $1,030. Its spending power has been considerably reduced as a consequence of inflation. In fact, Australian families-those with dependent children and those where households have only a dependent spouse-are paying $320m towards the excesses of Labor Government mismanagement of this economy. If the spouse rebate had been indexed in the way in which I have described, the amount by which the tax burden on families with dependent spouses would have been reduced would have been $320m. Worse still, the family allowances that were available to families in 1983, when the Labor Party came to office, have been fixed, too, in money terms-no variation whatsoever. The cost to those Australian families with dependent children has been of the order of $1.1 billion. Although tax rates may appear to have been reduced-I shall come to that in a moment-the fact is that Australian families have lost relativity: they are relatively more heavily taxed today than they were when the Labor Party came to office. The Labor Party has demonstrated that it is not concerned about the economic well-being of Australian families. Indeed, for those families which happen for the moment to have a high income the universality of the family allowance has been abolished. If the income is above a certain level, no family allowance is payable. The only concession that a family with an income above that means test threshold gets because there are young children in the family, if it has a single income, is $200 tax rebate, the additional amount added to the spouse rebate over the basic $830 that is available for a dependent spouse only. To suggest that a family supporting one, two, or three children and with a high income should be paying exactly the same amount of tax as a single taxpayer with the same income is a failure to understand how a tax system should be adjusted to be sensitive to the whole question of capacity to pay. Capacity to pay is not merely a function of the size of income; capacity to pay is a function of the number of people dependent upon the household income. On other occasions I have stated that I believe that allowances for dependants-dependent children and dependent spouses-should be set at the same level as the government would have to pay if the taxpayer were not supporting that dependant. That then would achieve equity and proper relativity between taxpayers who are single and taxpayers who are supporting dependent spouses and dependent children. Some will say, `I am single and why should I be paying for other people's children?'. Not so! The fact is that we should be looking at our tax system on a life cycle approach. The great maj- ority of Australian taxpayers have periods of time when they are single. They have periods of time when they are married and have no dependent spouse because their spouse is working. They have other periods in their life cycle when they have a dependent spouse. Furthermore, there are times during their life cycle when they have children dependent upon them. We should look at the rebates that we give to families with children and dependent spouses on that basis, as a life cycle adjustment to take account of the reduced capacity to pay on the part of the taxpayers who are supporting dependants who, if they are abandoned, become a charge on the general body of taxpayers, in any event, at a much higher rate. It would be much better if the tax system were adjusted in a more sensitive fashion. I said that the Labor Party attempted to create the illusion that there was a reduction in tax for the average Australian. It is just not so, because under the Fraser Government the underlying basic rate of tax was 30c in the dollar. If one's income then was substantially in excess of average weekly earnings, something like 30 or 40 per cent above average weekly earnings, one moved into a higher tax bracket of 40c in the dollar or whatever it was. The Labor Party, just as it has done with the spouse rebates and just as it has done with family allowances, has frozen the tax thresholds and, as a result, bracket creep has taken place. Now taxpayers move into the 40c in the dollar rate at a level of income significantly below average weekly earnings. They move into that bracket when their incomes exceed $19,500, whereas if that threshold had been indexed they would not move into that tax rate unless their income was approaching $30,000 in 1988 dollars. Let us just look at some of the figures. One finds that, since Labor came to office, average weekly earnings have risen from $370 to $505 a week, a 36.6 per cent increase in income. What has happened to net tax payable after making allowance for pay as you earn (PAYE) tax, the Medicare levy, rebates for dependent spouses and expenditure rebates that used to be available under the Fraser Government? We find that tax under the Fraser Government, expressed in the dollars of the year, would have been $2,998 in March 1983, but on the average weekly earnings in 1988 the tax burden would be $5,848. One may say that that is fine, but that the dollar values are different now. Let us examine the percentage change. For a single-income household on average weekly earnings, it is an increased tax burden of 95 per cent in contrast to an increase in the money wages of something less than 36 or 37 per cent. Increasing numbers of Australians are moving into the higher income tax bracket and now a substantial proportion of the full time work force is paying 40c in the dollar rather than something like 30c in the dollar. In effect, the basic standard rate tax applicable to the full time work force has been increased by the Labor Party by 33 1/3 per cent, from 30c to 40c. This is having a very serious effect on Australian families and households, because not only are they sharing their burden that is arising as a consequence of wage restraint measures, but families with children and dependent spouses are being hit as well by Labor's increased tax burden, while those on very high incomes are being given substantial tax cuts. They may deserve them. There may be a need for a greater incentive and greater reward for effort for high income people, but we need to make adjustments to the tax system in a manner that is fair and equitable to Australian families. The Labor Government has utterly failed Australian families in this regard, for if they were to be put in a situation where they had the same real resources available to them this year as they had in 1983, they would need an after tax increase in their incomes of at least $42 a week if they were on average weekly earnings. I turn now to the question of superannuation, because this Bill contains some tidying up measures in relation to the Labor Party's approach to the taxation of lump sum payments. A very difficult question exists in relation to Australia's retirement income policy because the whole system is an utter failure. People are double dipping; they are getting tax encouragement to provide for retirement. When they reach retirement they have spent the resources in respect of which they received tax exemption in one form or another or, when they reach retirement, they then set about spending it. Therefore, they have had a tax advantage during their working life-or their employers have-and when they reach retirement those people turn to the social security system and seek a social security pension. Members of the House would be fully aware that, in Australia today, our social security program provides a substantial proportion of income to at least 80 per cent of people of pensionable age; the superannuation provision provides a very much smaller percentage with a significant proportion of income; and the private provision provides yet a smaller percentage. As honourable members would recall, I have long been, and continue to be, an advocate for the total abolition not only of the assets test but also of the income test. This is because 80 per cent of the retired population are already dependent upon the age pension. If the test were abolished I believe people would behave in a more rational fashion. They would invest their money to yield the highest income. As a result of that the Government would gather in increased taxation. If pensions were paid to those who are not now in receipt of pensions because of assets or income, at least one-third, and probably 40 per cent of it, would come back in the form of taxation, because pensions are taxable. Mr Hand —What, give the millionaires a pension? Mr WILSON —Yes, millionaires would get it, too, because it would be much better if as a consequence of the need to pay those pensions, we placed on millionaires a higher level of income tax and had a better and fairer system. The Government has built the most unfair system of retirement incomes imaginable. However, one could consider the whole question of superannuation tax shelters. It is the largest fringe benefit that remains available to the Australian taxpayers. Are they taking advantage of it? They certainly are, and they are doing so in a way that is not achieving the policy objective that all would believe it should have: that is, that when people reach retirement they will have a lessened reliance on the social security system. There are a number of ways of doing that. One could say, `All right, Ian Wilson, member for Sturt, if you intend to abolish the assets and income tests, maybe you should say that there should not be a tax shelter at all in respect of superannuation, whether it is the tax exempt nature of the contribution of the employer or the tax exempt nature of the employer's contribution that is seen to be part of the wages of the employee, whether it is the income on the funds that is tax sheltered to a substantial and significant degree, or whether it is the generous tax opportunities that relate to the payment of the benefit, not at retirement but very often 10 years before retirement, to create the opportunity for the double dipping when one reaches the accepted pensionable age. One solution to this whole problem could well be to leave those tax shelters as they are rather than to abolish them, and to have a consistent framework of retirement income provision. As I said, one could approach it by saying that if one provides universal pensions paid for by all taxpayers, including millionaires, who pay their taxes, one should not have tax shelters for superannuation, the beneficiaries of which are largely the millionaires, who are having massive amounts of income tax-sheltered for them in a manner which gives them tax sheltered savings, tax sheltered income on those savings and tax sheltered benefits when they ultimately take the money out. The Minister for Aboriginal Affairs (Mr Hand) is concerned about millionaires and the equity of this system for them. Has he studied the extent to which the present superannuation concessions favour those who can most easily afford to put a huge amount of their discretionary income into tax sheltered funds? As I said, one could have a universal pension and abolish the tax sheltering, but that would cause a substantial unsettling of the superannuation, insurance and savings industries. Therefore, the solution could well be to abolish the assets and income tests in respect of all assets and all income of retirees, except for tax sheltered income and assets. Therefore, we would leave the tax concessions: if one has the tax concessions through one's superannuation fund directly or indirectly, when one reaches retirement, the solution could then be that the benefits received by way of income or capital at the time of retirement-age 65 would be my preference-be subject to a pension benefits test that should apply only to previously tax sheltered pension benefits. The present assets and income tests could apply. One could have $10 worth of assets representing $1 of income, and each dollar of deemed income reducing the entitlement to pension at the rate of 50c in the dollar. That would then eliminate the double dipping. It would give people a choice. They could save through a tax-sheltered superannuation scheme and have their pension subjected to a superannuation benefits test. Alternatively, they could save without tax sheltering, in which case they should be able in retirement to receive their full income from their savings and investments and at the same time continue to be entitled to an age pension. In that way we would introduce equity into the system. Furthermore, I think we should study the whole question of the extent to which tax concessions should be unlimited. I spoke earlier in this debate about the extent to which people on very high incomes are taking advantage of this tax sheltering. We should work out what is a fair thing. Do we want an income-related superannuation scheme encouraged through tax sheltering, or do we want a flat rate scheme related to average weekly earnings? I prefer the latter. I think people should be allowed to engage in tax sheltering to the extent of, say, four times average weekly earnings over a lifetime, with perhaps a cap of 10 per cent of average weekly earnings each year. But this is part of the rational debate, not of the unsettling features that have come about because the Prime Minister has said, `We are looking at it. We may make changes and we may not'. The least thing the Prime Minister should tell those approaching retiring age is that he will not introduce any scheme that is retrospective. People who are approaching retirement are fearful that the savings they have made in the past under the system that then applied, giving them tax exemption, will be adversely and prejudicially taxed as a consequence of changes to be made by the Government. Changes made in a retrospective fashion should not be permitted. Mr DEPUTY SPEAKER(Mr Blanchard) —Order! The honourable member's time has expired. Mr RONALD EDWARDS(Stirling)(9.32) —I heard what the honourable member for Sturt (Mr Wilson) said. I think his contribution to the debate was thoughtful and sensible. In the context of the sort of debate we are having here tonight, it needs to be recognised that the whole question of retirement incomes and an appropriate taxation scheme is one that the Australian community at large is concerned about. I make two observations about the difficulties we had when we came into Government. First, there was a loss of confidence in the taxation system on the part of the community. I do not want to make a heavy political point about that, but I think some of the avoidance and evasion practices that had emerged had resulted in a loss of confidence in the taxation system. Secondly, in relation to the honourable member's point about retirement provisions, there had been a substantial ageing of the Australian population, which is bunching up year by year. It is also true of Japan and other countries that we have visited. I make the observation that when, on the one hand, we have a taxation system which needs some amendments and, on the other hand, there has been a change in the demographic structure of the Australian population, we need to take some steps. I think the honourable member for Sturt would concede that we began to look at the tax system because it was clear to many of us, not just on this side but in the Parliament as a whole, that some avoidance and evasion had been practised. So we commenced a process of taxation reform. At the same time, it was evident that if we were to try to reduce the deficit in this community-that was a common problem for everyone-it was necessary at least to try to target our welfare spending. It was not without controversy, but we set about that process. A substantial element of that process was the assets test. As I said it was not without controversy, but I think it can be said that the assets test was really about targeting limited resources to those most in need, and I shall come back to a couple of points the honourable member made earlier. We also felt that in terms of pensions it was very important not only to spend money in areas of need but also to raise money through the tax system in a way that was regarded as both efficient and equitable. I think some of the taxation reforms we made really meet those criteria of being efficient, equitable and so on. But it is also true to say that if one looks over time at a tax system-and we are doing that; we are in the process of looking at our tax system and have been doing so in fact since 1983-one finds that in a community like Australia, being a country open to lots of information, which gets expert advice and which tries to plan its income and expenditure activities, areas like superannuation are the ones that legitimately a government should look at in terms of how it might change the taxation treatment of superannuation. One thing we have done is begin to deal with the whole question of lump sum superannuation, because it was the view of the Government that the taking of annuities was an important step because we did not want people double dipping. That is why we have taken that step. Again, like the assets test, it was not without some pain; it was not without some political discomfort. But the observation could be made that, taking a long view-and it is difficult with three-year parliaments to take a long view-if our concern is with the deficit and with the structure of government spending and revenue, both the assets test decision and the decision on lump sum superannuation were decisions that in light of experience were merited because we were trying to target both our welfare spending and also limit the double dipping aspects of super- annuation. I ought also observe for the honourable member for Sturt that this process has not continued for the obvious reason that in the area of superannuation there has clearly been a greater resort to superannuation by the Australian community, and part of that is very commendable. The aspect that is commendable is that clearly people are preparing and spending for their own retirement; they are apportioning income for their own retirement. But it is also true-and I heard what the honourable member said about tax shelters-that we ought to be in a position from time to time to make a judgment and ask whether the tax benefit incurred as a result of an activity is disproportionate in terms of the amount that ultimately would be gained as a result of that superannuation activity. Right at the moment, to be fair to the honourable member for Sturt, I am not making a decision on that, but it is also fair to say that that is the sort of situation that should arise at this stage. I also heard how the honourable member might deal with that and how he might ultimately treat these amounts when they are realised later on. He made a thoughtful contribution. He suggested that if things are subject to a tax shelter at the time of their being acquired, they might well be treated differentially to those not subject to a tax shelter. That is a sensible contribution, but when we are talking to the Australian community in general we have to establish in their minds one or two principles. The first is the one I referred to earlier: it is clear that if the nature of the Australian population changes, if the population ages, we will have to target our welfare spending much more. We could get into a big debate, obviously, about the assets test and its political consequences, but it would be observed by a number of people watching Australia that we do have to spend pension funds where they are most needed. The Japanese really have a big problem in this area, and I think many other economies will face this situation down the track. The second principle is: if we have a structure which is providing for retirement, have we thought that structure through both in terms of the ultimate benefit to be gained from superannuation activity and also in terms of the tax treatment of that superannuation activity? It is true to say right at the moment that we have examined that. We have examined it once in terms of the lump sum superannuation payment and we are examining it again in terms of the tax treatment of superannuation. It is also true to say that clearly people in the community are uncertain. Anyone who has taken superannuation or who is contributing to superannuation wants to know what he is getting out of it. I observe, by the by, that I think the change in the stock market activity last year has meant there has also been great activity in terms of superannuation benefits because clearly many companies, such as the Australian Mutual Provident Society, have suffered a substantial loss in their portfolio investments and in other areas. That has ultimately had consequences for many people in the Australian community. It is not something we take joy in, and I know that the honourable member for Sturt and others do not take joy in it, but it is true that we are in a volatile situation in terms of what might be ultimately realised. It is also true to say that we would be avoiding our responsibility as a government if we did not look seriously at the consequences of our taxation treatment of superannuation, rather than just labelling things and saying this is a rort and this is a ramp, but simply saying that this is a fair and equitable distribution. I heard what the honourable member for Sturt said earlier in his contribution about whether or not superannuation funds have benefited from tax shelters since their inception and how he would treat them ultimately. I recognise that point but I say to the honourable member that I think the process we are going through is a necessary one. If we were to examine other economies such as Japan, the United Kingdom, the United States of America and New Zealand, we would find the same sorts of questions coming up, not because of who is currently in power but simply because of the economic realities of the circumstance. The honourable member should deal with that as we are dealing with it. We are recognising that we have a tax question-I dealt with this earlier-where we had tax avoidance and evasion activity. I could talk further about that but I will not in this debate. We have that question, we also have a change in the actuarial or demographic structure of the population and we then have to try to make optimal decisions. I think the view that we ought to be putting to the Australian community is that we are conscious, as a government, that we ought to be aware of the sorts of returns that people want from their superannuation policies. We are also conscious of the fact that tax treatment is important. It is also important to observe that we have been conscious that this country has sadly lacked a national superannuation scheme. I am not talking necessarily in terms of the national superannuation scheme that might have been endorsed 20 or 30 years ago but I think we are conscious of the fact that because we have supported the Australian Council of Trade Unions in its move for industry superannuation we really need to try to encourage more and more people to provide for their retirement. That really brings me back to the centrepiece of this debate. As a community we need to recognise that fact. If we were to go back 40 years to 1948 and make one observation it would be that one of the great problems we did not tackle, except peripherally at that time, was that we did not have a national superannuation scheme, covering the whole community, and the consequences to the population as a whole are now becoming evident. My friend the honourable member for Canning (Mr Gear) and my friend the honourable member for Wide Bay (Mr Millar) would recognise that we are facing the consequences of not having a national superannuation scheme then and having an ageing population now. Opposition members and Government members are all stuck with the consequences of trying to provide for an ageing population. We understand very clearly that simply trying to provide for it out of Consolidated Revenue is a bit like a dog chasing its tail and I think that is conceded. Mr Millar —We are going to run out of tail. Mr RONALD EDWARDS —I thank the honourable member for Wide Bay because that is true; we are going to run out of tail. So we have to try to make decisions. I know it is very easy in the context of debate in this place to come into the House, make a series of political points and win the day but when we finish that day we are still stuck with an economy in which we have diminishing resources, enormous problems to deal with in terms of allocating those resources, and a commitment to try to provide for those areas of need. I say to honourable members opposite and to colleagues on my side of the House that that problem will not go away; it is a problem that we have to continue to address. Let me give one example of how that problem demonstrates itself. I know that many pensioners who receive the full range of fringe benefits in some circumstances are well catered for because they are now at about 25 per cent of average weekly earnings and they were at 22.8 per cent in 1983. But I think it would be recognised by members opposite, as it has been recognised by members on this side of the House, that sometimes superannuants who are on very modest superannuation when they retire and who do not have fringe benefits can, in a relative sense, be worse off vis-a-vis pensioners. The community should consider whether we should offer those superannuants the option of a senior citizen's card which would give them a modest range of fringe benefits, particularly things such as transport concessions in the State systems; entrance to entertainment venues, such as cinemas; entrance to sporting events, such as cricket, football and so on; and also some minor concessions from Telecom. Mr Wilson —A phasing out system would be helpful too, rather than sudden death. Mr RONALD EDWARDS —I think that is correct. We should look at exactly that. I commend the Minister for Social Security (Mr Howe) because I think he has recognised that. Prior to the Parliament getting up last year we dealt with one or two such issues. One of those involved what we called the Santa Clause or Father Christmas dilemma. Because of a decision by the Federal Court people were no longer able to average income over the year; it had to be treated as being received in a short period. To the credit of the Minister and the Government they have taken action in this regard. This takes up the point the honourable member was making: it is essential that there is a phasing in system. Many people experience great stress if they think they will lose their fringe benefits. Honourable members will understand that such stress is an extraordinary burden. We recognise that and I am sure the honourable member for Sturt does. Many people receiving modest superannuation pensions also experience those difficulties. Over time the Federal and State governments should work towards providing a minimum range of such benefits to those receiving modest superannuation payments as well as to those receiving the pension. In concluding my remarks I come back to emphasise two or three points. Firstly, we have been trying to modernise and make more effective the taxation system. That process is continuing. Secondly, we have tried to target our expenditure in welfare areas. I have acknowledged that this has not been without controversy but I think at the end of the day it has been recognised that we have made the right decisions. Thirdly, as the nature of superannuation changes from time to time, the Government's treatment of the taxation aspects of superannuation may need to change. I recognise that may produce uncertainty, but we on this side of the House recognise that we have a responsibility in terms not only of our budgetary considerations but also our provisions for retirement. I say clearly to the Australian community that we are conscious of all those factors when we make decisions as a Government. It is very easy to score points in this place in Question Time and debates and so on but at the end of the day honourable members-whether it be the honourable member for Wide Bay or me-are stuck with a responsibility to the wider community. We must recognise the actuarial structure of the community, the ageing process that has gone on and the limited resources we have to meet the needs. I think with good sense and a commitment to principles that can be argued and worked through in the Australian community we can make the right decisions. I am confident that in 10 years time when we look back we will say that in the processes that are going on now we were prepared to make difficult decisions that were right in the long term even though they were not immediately popular. I am pleased to commend the Bills to the House. Mr DOWNER(Mayo)(9.48) —I support the amendments to the Taxation Laws Amendment Bill (No. 5) and the Income Tax (Offshore Banking Units) (Withholding Tax Recoupment) Bill that have been put forward by the honourable member for Kooyong and Deputy Leader of the Opposition (Mr Peacock) and also support, as his amendments do, the second reading of these two pieces of legislation. In doing so I would like to make two points. I would like to make a point about the approach of the Australian Labor Party Government to the whole issue of taxation and I would like to make some more specific points about the taxation regime as it applies to offshore banking units. Since March 1983 and the election of the Hawke Government, the Australian Labor Party in Government has done a large number of things which, when one looks at them conceptually, one sees concentrate power in the hands of fewer and fewer community groups and individuals. We can see from many measures of this Government in a whole range of policies that they have concentrated power more in the hands of what is broadly described as government, meaning politicians and bureaucrats. They have concentrated more power in the hands of the trade union movement. They have even concentrated more power into the hands of a small number of chosen business leaders who want some sort of special privilege in their operation within the marketplace. The consequence of this approach of the Labor Government, which may be convenient to it politically and electorally, is that it has taken away, very substantially, power from the hands of ordinary Australian individuals. When people say that the Labor Government has lost touch, what they are really effectively saying is that the Labor Government is increasingly taking decision-making out of the hands of individuals and putting it increasingly into the hands of the chosen few-those chosen by the Government. The Government's taxation policies since 1983 have been a very clear manifestation of that underlying philosophy. When one introduces tax policies-and the Government claims that it has introduced a range of taxation reforms-one should have some very simple and very clear objectives. Obviously, for a whole variety of reasons, a government needs to raise revenue. But it needs to do so in a way which, as economists would put it, is essentially neutral-in a way that will allow economic growth to progress, not in a way which distorts growth and minimises the performance of the economy. Of course, we do not just want to maximise the performance of the economy for some abstract reason. We want to maximise the performance of the economy because we want to give individuals within society a greater range of choices. With economic growth and economic success we are going to have greater prosperity and, through greater prosperity, all Australians, not just a few rich people, are going to have greater choices. That should be one of the approaches that any government adopts when establishing its attitudes to and policies on taxation. For the Labor Party, in very stark contrast to the Liberal Party of Australia, taxation is really a tool of redistribution-not a romantic tool that redistributes wealth from the rich to the poor, as the Labor Party would have us believe, but, as I have already said, a tool which redistributes from ordinary individuals to the Government. In other words, the Labor Party concentrates economic power in the hands of a few and takes it away from individuals. One should not look at the Government's taxation record just in terms of such political rhetoric as, `Oh, isn't it awful that taxation has increased'. One should do so in the context of what effect that has on the decision-making capacities of individual people. By increasing the tax burden on families and individuals, the Government is confiscating funds from those people and spending them itself rather than allowing individuals to make decisions. As a matter of philosophy, I think that is fundamentally unsound. When one looks at the statistics, one can see how that attitude has been executed by this Government. Let us take a single income family on average weekly earnings. The average tax rate that that family paid in March 1983 when the Fraser Government was defeated was 17 1/2 per cent. By July 1987 it was 20 1/2 per cent. The Government's marginal tax rate has gone up from 30 per cent to 40 per cent. In numerical terms, tax payments have gone up from $65 a week in March 1983 to $102 a week in July 1987. Even after the latest tax cuts, single income earners and families will be paying 42 per cent and 57 per cent respectively more tax then when the Labor Government came to power. That is a very clear, albeit rather cold and statistical, demonstration of what has happened to choices that individuals might otherwise have been able to make. When one looks at the company rate structure-and one of the Bills which we are debating tonight relates very specifically to that structure-one can see again that the passion for redistribution in favour always of government is duplicated on top of the taxes that are imposed on individuals. As everybody by now knows, the Government has introduced a whole range of new taxes. It has introduced the capital gains tax, the fringe benefits tax and foreign tax credits scheme, which is a real imposition on Australian companies which also happen to operate offshore. The Government has abolished the investment allowance which was introduced by the Fraser Government. It has also increased the company tax rate in Australia from 46 per cent to 49 per cent. As many other speakers in this debate have said, it has done that in defiance of a global trend. In the United States the company tax rate is now 34 per cent. In Canada it is down to 28 per cent. For small businesses in Canada, that company tax rate has been reduced to 12 per cent and for manufacturing industry it is 21 per cent. In New Zealand, as we all know, the company tax rate is to be reduced to 28 per cent. In Singapore it is 33 per cent while in Hong Kong it is 18 per cent. I could go on and on. In the United Kingdom it is 35 per cent. But in Australia it has gone from 46 per cent to 49 per cent. When Australia has a staggering balance of payments problem, which the Government acknowledges, and when we have a tremendous challenge to make ourselves more competitive in the world, why is it that we are increasing company taxes from 46 per cent to 49 per cent while the rest of the world is substantially reducing them? The answer is that the Government has effectively admitted that it has made a major mistake. In recent statements the Prime Minister (Mr Hawke) and the Treasurer (Mr Keating) have said, `We'll have a review of company tax. We had a tax summit, White Papers and so on, and now, a couple of years later, we're suddenly to have a review of the company tax structure and since the New South Wales election happens to be on and the Labor Party is miles behind in the opinion polls let's throw in the prospect that there might also be personal income tax cuts as well.' This is hardly the policy of a sincere government with a great sense of direction, building towards a vision of the future for Australia. It is an utter fraud. After all, during the July 1987 election campaign the Treasurer and the Prime Minister argued, when the Opposition put forward very constructive tax reform proposals, that tax cuts were effectively impossible. They said that it would be far too expensive to reduce taxation in Australia over the next one, two or three years. Another very interesting argument was put forward then by the Labor Party. That argument was strongly supported by journalist Maximilian Walsh, who, I seem to recall, revealed his political colours on election night. The argument was that if one were to reduce taxation in Australia, the effect would be to create a balance of payments crisis. What has happened? The New South Wales election has come along, the opinion polls do not look too bright for the Australian Labor Party, Ministers are resigning and chaos is reigning within the Government. But the opinion polls show something else-not just that Labor is dropping off, but that tax cuts would be popular and that ordinary Australians-those people who are forgotten by the Labor Party-are crying out for some sort of tax relief to give themselves greater choices rather than having their own money effectively confiscated and spent for them by a paternalistic government. The Government talks about some sort of tax cuts, but these would have to be massive to restore living standards to the levels they were at when Labor came to power in March 1983. Honourable members can rest assured that such tax cuts will never eventuate. It is all part of the sort of cynical New South Wales Right game that is played by the Hawke Labor Government-number crunching by Senator Graham Richardson, Senator Robert Ray and all of those sorts of people, opinion poll gazing hour after hour, stamping on any dissident views in the media or wherever they may be, making sure that it wins elections at any cost. The fact is that the Government has imposed massive additional tax burdens on Australians and it is far too late now, having decried the idea of tax cuts during the July 1987 election, to say, `Actually, we've just found a few dollars under the table and we've decided there might be some tax cuts'. Do not worry; no one in Australia believes that sort of nonsense any more. We have heard those sorts of things too often and for the Labor Party it is too late. Let me turn to a more positive aspect of what this debate is all about. I welcome one of the Bills that has been introduced tonight-the Income Tax (Offshore Banking Units) (Withholding Tax Recoupment) Bill 1987. To use a tired old cliche, it is too little, too late. Nevertheless, I am glad to see that the Government has at least addressed the issue of the need to attract offshore banking units to Australia. As I will explain a little later, we have enormous potential to develop a brand new industry in Australia in that field. I remember that in January 1984 the Whitlam report came out. That was the report of a committee that was chaired by my friend Nick Whitlam. In spite of Nick Whitlam's political leanings, it was a visionary report which came to some very constructive conclusions. Mr Lee —Who commissioned it? Mr DOWNER —Funnily enough, it was the Wran Government that commissioned the report, but interestingly enough, the Unsworth Government has completely ignored and forgotten it. We all know that the only thing it is interested in is opinion polls. As I will explain, the Hawke Labor Government has also almost forgotten it. In relation to the setting up of offshore banking units in Australia, the Hawke Labor Government has done much too little far too late. I think there is an enormous opportunity but the longer we delay the more we will lose that opportunity to establish our country as a regional financial centre. We have really lost that opportunity. The Whitlam report explained how Australia could be established as a financial centre. It said that if we were to develop offshore banking units in Australia we could, in Sydney alone, create 3,500 new jobs. The Federal and State governments, ever voracious for more tax revenue under Labor regimes, could generate an extra $112m a year in tax revenue. That was in 1984 so the figures, presumably, would be substantially higher than that now. Australia is ideally placed to become a regional financial centre. Yet at the moment there is almost no offshore business conducted in Australia. It is interesting to see that this particular measure introduced tonight by the Government will cost it only one and a half million dollars in lost revenue. That is actually a reflection of how ineffectual offshore banking activity in Australia is at the moment. But we are ideally placed to develop an offshore banking industry and to develop ourselves, through that, as a major financial centre, not only in our region but also-looking into the future-perhaps even globally. We have certain intrinsic advantages. Even with Labor governments we have relative political stability compared with other countries, regardless of the number of resignations from the Labor Government of late. The Asia-Pacific region in which we are inevitably located has enormous growth potential. I think most, if not all, members of this House would agree that this is the great growth region of the world for the next few decades. We also have some very substantial time zone advantages. For example, Sydney is two or three hours ahead of Singapore and when one travels across the continent to Perth one finds that Perth has a time zone that overlaps quite conveniently with Bahrein and subsequently London. As the Whitlam report put it, because of its location in the world's time zones, Australia can straddle the world. Sydney, as I understand it, has roughly the same time zone as Japan and Japan will be, during the next 10 or 20 years, one of the two major financial centres of the world-surely very soon to overhaul London and challenge New York. Australia is also the host to an enormous amount of British and American capital, so it is not surprising that, given that Australians speak the same language as the Americans and British and that Australia is in the same time zone as Tokyo, there would be a natural inclination for people from New York and London financial centres to operate through Sydney, but only if we had an effective offshore banking system in this country. The Whitlam report identified two major steps that would be needed if we were to achieve that. First of all, it stated that we ought to set up in Australia a proper surveillance framework so as to ensure that special concessions that would be necessary for offshore banking units would not be used as a means of tax avoidance and tax evasion through artificial paper shuffling. That is not something that the Government has even considered, but I suggest that it should look into it. Secondly, the Whitlam report made it clear that Australia's taxes and other charges would have to be competitive. We are getting back to a rather familiar theme made by the Whitlam report. The son of the famous Gough Whitlam made this point, and, of course, the Whitlam report identified that at that time-and things have got worse since-our taxes and charges were not competitive. The Whitlam report pointed out that the Federal Government should exempt offshore transactions from withholding tax. That is what this legislation has done and it is a good thing. But Australia should also introduce a much more competitive company tax regime. I have been through the arguments about how company tax has been rising in Australia and falling in other countries. But let me remind the House that in Singapore offshore banking units are paying a company tax rate of 10 per cent. In Australia they would pay a company tax rate of 49 per cent, hardly a basis for a competitive offshore banking system in this country. As the Whitlam report pointed out, it is better to have 10 per cent of something than 46 per cent-as it was then-of nothing. That is a very important point and one that I hope the Government will take proper notice of. There are things the Whitlam report recommended that State governments should do as well. It suggested, and perhaps this is a little too dramatic, that voracious, tax hungry governments such as the Unsworth Government should exempt offshore banking units from stamp duties and financial institutions duties. This might be an opportunity for the Bannon Government in South Australia to do something to give South Australia the inside edge at least on one industry somewhere around Australia. But unfortunately that is hoping for far too much. The Whitlam report recommended that those things should be done by the States as well. Needless to say they have not been done. In conclusion, as I have said, Australia ought to be looking progressively at the sorts of things it can do to make itself, at least at this stage, a significant financial centre in its region and, in the longer term, a major global financial centre. This will have obvious economic spin-offs. It will generate additional tax revenues for governments that love all that extra tax revenue. It will generate additional jobs in Australia and, through the offshore banking system, it will generate additional prosperity for all Australians. That must be not our only objective but one of our major objectives as members of parliament. If we are to achieve these sorts of things, if we are to get some of the business that at the moment is going almost exclusively to places such as Tokyo and Singapore, we need to look ahead. We need to think big. We cannot continue to be strangled by Labor's quite extraordinary taxation regime. We have to ensure that we have a tax structure which shows that as a nation we have some ambitions for building ourselves up in the future. Mr GEAR(Canning)(10.08) —Once again we have suffered another lecture from the honourable member for Mayo (Mr Downer) on taxation. The Liberal Party, or sections of it, have more front than a double decker bus getting up here in this place and telling us about taxation-- Mr Lee —He would keep a hot air balloon afloat. Mr GEAR —As my colleague says, the honourable member could keep a hot air balloon afloat just on what he said tonight. Given the Liberal Party's record on taxation, for the honourable member to get up here and lecture us on how we should run a tax regime is stretching credibility to the limit. Let us look at the sort of taxation regime the Liberal Party ran. Let us recall 1982 and 1983, the infamous bottom of the harbour days, when we really found out how good the Liberals were at administering the taxation system of this country. It was a case of freedom of choice for some people-usually the more affluent-as to whether they paid tax or not. Mr Downer —Those schemes were under the Whitlam Government. Mr GEAR —The question I would ask the honourable member who interjects is what did Mr Howard do about the schemes? He sat there and had to be dragged screaming in here to outlaw them retrospectively. He sat there for three years while nothing was done by the Treasurer of the day, even though the Commissioner of Taxation tried to get him to do something about it. We remember that under the Liberal regime the more affluent were able to book up their free lunches to the taxpayers. We remember the cars, the low interest loans, the overseas trips. All of those rorts were built into the taxation system and kept there by the Liberal Party. Mr Lee —They want to give them back. Mr GEAR —Yes. The Leader of the Opposition went to the people in July on the theme `Axe the tax', giving back all the benefits to the people who took advantage of them under the previous regime, the people from the big end of town. The honourable member for Mayo also spoke of high taxation. It is always salutary to look at the graph put out by the Organisation for Economic Co-operation and Development (OECD) by which one can compare the taxation collections-these are the latest available statistics-in the OECD countries. Of the 23 countries in the OECD, Australia comes eighteenth. In fact, we are not a high taxing country at all. What the honourable member for Mayo, who is now leaving the chamber, would have us believe is that we should be looking at Turkey. Turkey has the lowest tax collection as a percentage of gross domestic product (GDP). Mr Martin —Speaking of turkey-- Mr GEAR —The honourable member is a little unkind, but I shall continue. Turkey collects the smallest amount of taxes as a percentage of GDP, and it could be said, `Maybe we should be like Turkey and collect that amount of tax as well'. But the downside of that argument is that if one wants Turkey's tax rates, one will get Turkey's social security provisions. If one gets Turkey's tax rates, one will also get Turkey's law and order provisions. The fact is that if one does not collect the tax, one cannot spend it. In recent days the Leader of the Opposition has spoken about going back to the spending patterns of the 1960s, cutting $11,000m off tax and bringing back the tax rorts. That is the system suggested by the Opposition, which seeks to lecture the Labor Government on what we are doing on tax. The Opposition is saying that a high taxing Labor Government is spending all this taxpayers' money on the necessary things on which taxes are spent. I refer to expenditure on roads, education, pensions and the running of government. This includes the employment of civil servants to keep this country running, expenditure on the defence forces, and all the necessary infrastructure which gives Australia the high standard of living that it enjoys. That is why we collect the taxes. We are not a high taxing country, but we have a high standard of living. One can draw a direct correlation with countries that do not have a high standard of living. In regard to the Third World, one could say that Bangladesh, for example, does not collect a high percentage of its GDP in taxes, but look at its standard of living. The countries that collect a high percentage of their GDP in taxes are countries with a high standard of living. For example, the OECD chart shows that Sweden is the highest taxing country. Over 50 per cent of its GDP is in the form of taxes. Yet would any honourable member seriously suggest that Sweden, because it collects all those taxes, is somehow a country that is going backwards? We are building Swedish submarines down in Adelaide. It seems to me that Sweden is doing pretty well in this world. Despite the amount of taxes it collects, Sweden can still run an industry that is very export oriented and highly technological in its outlook. Certainly it is a country with which we compare ourselves. The honourable member for Mayo says that we are a high taxing country and should lower taxes. He believes that we should start getting into a Mad Hatter's auction to see who can achieve the lowest tax rate. If we really want Bangladeshi taxes, we will get Bangladeshi social security provisions. The choice is obvious. It is a bit much to be lectured in this place by a Liberal member about the efficacy of taxation collections, and the way in which this Government has moved to make sure that taxes are appropriate in terms of not only what we collect but also where we collect them from. This Government has patched up all the holes in the sloppy taxation system which the Liberal Government ran for so many years. The withholding tax brought in by this Government was fought by the Opposition. When this Government tried to get back the proceeds from the bottom of the harbour rorts, again the Opposition opposed that move. One will always remember the capital gains debate. The debate on that subject was never of any value because it was always debased by the Liberal Party's scare campaign. Yet I notice in the Australian Financial Review that the capital gains tax will lead to the collection of taxes of the order of $1,000m directly and indirectly. That is a measure of the taxation that was slipping through the net because we did not have an effective capital gains tax. What would the Opposition do? The Opposition would take that out and the ordinary taxpayer would have to subsidise $1,000m. Debate interrupted. Madam SPEAKER —Order! It being 10.15 p.m., I propose the question: That the House do now adjourn. Mr McARTHUR(Corangamite)(10.15) —Madam Speaker, tonight I want to address the subject of video violence. Violence in any form encourages violence in itself and it should be of great concern to members of this House that if we continue to bring our children up on a diet of television and video violence and films which glorify war and glamorise murder, we run the very real risk of producing a generation which takes violence, murder and mayhem for granted. Worldwide research undertaken by psychologists studying video and movie violence proves unequivocally that the amount of violence on the screen does affect the amount of violence in society. The average child watches 25 hours of television a week, spends a growing number of hours watching videos and on average sees one movie per week in a cinema. What the viewer learns in many cases from violent movies, either consciously or not, is that violence resolves conflict. This a frightening trend in what is supposed to be an entertainment medium. The Australian Psychologists Society has called for a reduction in excessive violence in the media and has warned parents to monitor their children's viewing patterns. It is the responsibility of parents to teach their children that there are methods of solving conflict other than resorting to violence. I am pleased to say that Australian Psychologists Society also has appealed to the film and television industry to regulate and reduce the amount of violence shown on their screens. Parents' responsibility also extends to the toys they buy for their children. The manufacture of toy weapons has become so sophisticated that there are many cases on record of toy weapons being used in robberies. Replicas of semi-automatic weapons, high-powered repeater guns and their ilk should be banned from sale. I am particularly pleased to learn that in some centres the message of toys of violence encouraging violence has been felt by supermarkets carrying such items. I am aware that one K-Mart store, for example, which stocks toy guns ranging from cap pistols, Zappit guns, rapid-fire hand guns, to semi-automatic M16s-that is, machine guns-have sold only half a dozen items since Christmas. Business is so slow in this particular area that some of the toy guns have been reduced in price by almost 50 per cent to try to clear them. I am told this a very different position from that of a year ago. Society is beginning to react adversely to the sale of such toys. Community concern over the new gun laws has obviously had an effect on the sale of toy guns. There is on the market a laser gun. This shoots a laser beam at a target wearing a special material and when hit the target emits a beep. This toy-and I hesitate to call it a toy-teaches children to target more accurately another human being. They get a result. They see where they have hit the other person. The next step is a real weapon with real ammunition From the age of five, children who have access to many hours of television viewing and videos are exposed to the influence of lethal weapons and toy replicas are used at home to simulate violence, murder and killing. I am not suggesting that all who are exposed to toys of violence are so easily influenced, but there is irrefutable evidence that some viewers are more vulnerable than others. I would like to see all toy weapons banned for the reasons I have outlined. I repeat that violence encourages violence. The most popular videos are violent videos. One proprietor told me that it was impossible to view every film handled and he relied on customer reports and censorship classification. In fact, proprietors concerned at the amount of violence have imposed their own censorship by placing warnings on the covers. A study conducted by the Australian Institute of Criminology to examine sex, violence and sexual violence in popular M-rated and R-rated videos concluded that X-rated sex films were less harmful to society than violent R-rated and M-rated videos and recommended that videos should have more information on their jackets about the severity of the scenes. The study advocated subsections within the R-rated category. I conclude by quoting comments from one member of the study team: Some videos attempted to show viewers that it is correct to take the law into their own hands and that any level of revenge . . . is right. It is this combination of violence and attempted justification of such aggression that disturbs me most. If viewers are influenced by what they watch, then these movies could trigger some violent acts. Mr LEE(Dobell)(10.20) —Tonight I wish to make a few comments on a man called Peter Sawyer who first came to fame because he published a book called Dolebludging: A Taxpayer's Guide. Mr Sawyer has recently gained renown for producing a newsletter called Inside News which has been circulated to a number of honourable members. Inside News has made a number of claims which are quite laughable. I wish to explain them in detail to the House, not to get a laugh but to explain why this material is quite dangerous. Mr Sawyer has claimed that the Government has established a super concrete fortress at the Deakin telephone exchange in Canberra. At that exchange, Mr Sawyer claims, billions of dollars have illegally been diverted to allow a top secret group to establish computer hardware in which all sorts of information on Australian citizens is being built up and that this is part of a conspiracy directed by, according to Mr Sawyer, not only the Prime Minister (Mr Hawke) and Senator Gareth Evans but also Senator John Stone, John Elliott, Alan Jones, Charles Copeman and numerous other people. Mr Sawyer goes on to allege that another group, a group he calls `a secret society of Australian dentists' called Delta Sigma Delta is also part of this conspiracy to take over the Australian Government. Mr Snowdon —The drillers. Mr LEE —The drillers, perhaps, as the honourable member for the Northern Territory suggests. While allegations such as this are quite ridiculous, it is very hard to disprove a story which is as wild as that put forward by Mr Sawyer. It will be no surprise that Mr Sawyer believes that, as part of this conspiracy, and I quote from his newsletter: Ultimately, all roads appear to lead back to international banking institutions, principally the Rothchilds and the Rockefellers. There is another case going back to the alleged international Jewish conspiracy. It is no surprise that the League of Rights appears to be trying to jump aboard this bandwagon and seek to mislead some people who perhaps for genuine reasons believe there is a particular problem with new technology. These people are given these ridiculous stories by people such as Mr Sawyer. They perhaps sign a letter or a petition and the League of Rights gets their name and address and they suddenly start receiving League of Rights material promoting anti-semitic propa- ganda. I think that is quite unfortunate. Mr Sawyer's other allegations are that at the Deakin telephone exchange-this fortress building-there are stand-by diesel generators, which is quite true, and that there is food accommodation for staff for eight weeks. I and other members of the Joint Committee of Public Accounts were able to inspect the Deakin telephone exchange. Mr McGauran —You are pretty easy to fool though. Mr LEE —The interjection from the honourable member for Gippsland is no reflection on the honourable member for Cowper (Mr Nehl) who accompanied us on that inspection. As I said, one of Mr Sawyer's allegations is that there is enough food accommodation in the basement of the Deakin telephone exchange to support the staff for eight weeks. We found out that the only food on the premises is the food in the canteen and claims that that would support the staff for eight weeks is drawing a very long bow. He claimed that there were computers there for the Department of Social Security, the Australian Taxation Office, the Department of Defence, the Department of Transport and Communications and Telecom Australia, and that is true. But he also wrongly alleged that the Australian Bureau of Statistics, the Department of Immigration, Local Government and Ethnic Affairs and the Department of Community Services and Health and Australia Post had computer hardware there. That is plain wrong. He also alleges that the State governments put land titles and car registration information there and that the exchange is also hooked up to the National Aeronautics and Space Administration and the American strategic defence network, which is also utterly ridiculous. I also wish to draw to the attention of the House that Mr Sawyer has asked many people to send cheques made out to cash, uncrossed, to his post office box address. On my calculations he has received more than $10,000 tax free. I call on the Commissioner of Taxation to investigate Mr Sawyer and what has happened to the more than $10,000 which has been sent to him. It is about time that Mr Sawyer came clean and told us what he has been doing with all the money which some people have been sending to him. Mr HAWKER(Wannon)(10.25) —Tonight I would like to raise something related to the Australian Taxation Office, as did the honour- able member for Dobell (Mr Lee). But the matter I want to raise is somewhat different. When Senator Stone pulled the rug from under the identity card all of us on this side of the House, and many on the other side of the House, breathed a huge sigh of relief. Many of us thought that at long last commonsense had prevailed and we would not have to put up with the gross invasion of privacy that would have come with the ID card proposal that some members of the Government were rather keen to push. Unfortunately, it seems that the bureaucracy, and particularly the Australian Taxation Office, did not hear about that. I want to raise a matter that was brought to my attention by a constituent who happened to go to buy a four wheel drive vehicle for his farm. As honourable members would be aware, farmers are allowed an exemption from sales tax on four wheel drive vehicles. When this farmer went to buy the vehicle, he was not confronted with the old form which used to cover about half a page and which said, `Are you a primary producer' to which the answer was, `Yes, I am, and I am going to use this vehicle on my property located at so and so'-and that was all there was to it. Since most farmers are completely honest I think that that was a perfectly reasonable form to ask them to sign. But that does not happen any more. It seems that under the new proposals, the Australian Taxation Office has replaced a simple half-page exemption form with a three-page monster. In this three-page monster, the questions asked are a gross invasion of privacy. The first page starts off fairly innocently with such questions as, `Name', `Residential address' and `Contact telephone No.' Question No. 4 concerns previous exemption applications that have been put in and when and where they were lodged. Then details have to be given of the vehicle to be purchased. That is fair enough. Question 6 asks whether the vehicle is a replacement vehicle and whether the previous vehicle was also free of tax-and, if so, it requires details. Again, that is maybe not too intrusive. Question 7 asks for the income tax file number. Since honourable members on this side of the chamber and many opposite were prepared to accept that the income tax file number would be a suitable alternative to an ID card, I guess this is a reasonable request. We go on to question 8, `For what purpose(s) will the vehicle be used?'. That should be obvious. The last question is, `Item number under which exemption is claimed'. All that is fine. Then we turn over to part B on page 2. Question 1 is `Size of property'; question 2 is `Location of property'; question 3 is `Gross income from agricultural activities declared in last Income Tax return'. We have seen that there is a request for the income tax file number but now the person must also declare his gross income in case there is a difference. Question 4 is `Date agricultural activities commenced'. Question 5-and we are getting into a bit more detail-is `Type of crop and area under cultivation'. Question 6-just to make sure people are tied up properly-is `Number, and type, of livestock raised'. Question 7 is `If this is the first year agricultural activities are being undertaken, what are the answers to the previous questions, and any other information?'. By any measure, this is going into far more details of a personal nature than even an income tax form does. It is a gross invasion of privacy and is totally unnecessary. I would like to see the Treasurer (Mr Keating) demand that the Australian Taxation Office desist from issuing this form, simplify it, take out the questions that are a gross invasion of privacy and bring it back to what is a reasonable request, `Are you, or are you not, eligible for a sales tax exemption?'. Since time is running out, I seek leave to table a copy of this sales tax form so that honourable members can see what is involved. Leave granted. Mr HAWKER —I thank the House. This really amounts to a gross invasion of privacy. Much of this information is totally unnecessary. Asking for an income tax file number should allow all the questions about whether a person is a genuine primary producer to be answered. The Treasurer should take up this case immediately and direct the Taxation Office to simplify this form, take out these questions and bring it back to something sensible. Madam SPEAKER —Order! The honourable member's time has expired. Mr SNOWDON(Northern Territory)(10.30) —Tonight I wish to inform the House of the extraordinary act of bravery and self-sacrifice made by a teacher in the Northern Territory Teaching Service-a teacher at Sanderson High School in Darwin. The teacher was Mrs Kerry Anne Aitken, who returned to school this morning. I wish to take this opportunity to tell the House about her extraordinary bravery. I refer to an article headlined `Classroom horror as school opens' which appeared in the Northern Territory News on 28 January. On that day, Mrs Kerry Anne Aitken, a senior home economics teacher, was taken by ambulance to the Royal Darwin Hospital where she underwent surgery for abdominal wounds caused by gunshot. Those gunshot wounds were inflicted by her husband, who later turned the gun on himself. That person arrived at the school at 9 a.m. and walked through three classrooms firing gunshots into the ceiling. Mrs Aitken, who was taking a textile class, saw him coming and beckoned him to a classroom and then an adjoining storeroom. It was in that storeroom that Mr Aitken turned the gun on Mrs Aitken and shot her. In my view, and that of the population of the Northern Territory, Mrs Aitken has shown an extraordinary dedication to her duty as a teacher and to the students for whom she is responsible. She is a very popular member of the school community and her bravery following that horrific incident has been admired by people throughout the Northern Territory. It is not uncommon-- Madam SPEAKER —Order! Can the honourable member inform the Chair whether this case is proceeding before a court? Mr SNOWDON —No. The person has passed away. I apologise, Madam Speaker: I should have made that clear. Madam SPEAKER —We do not want to infringe the sub judice rule if a court case is going on. Mr SNOWDON —I appreciate that, Madam Speaker. Mrs Kerry Anne Aitken typifies the dedication of teachers who work in the Northern Territory Teaching Service. I was a member of that Teaching Service. I am very proud of the way in which the dedication of teachers is exhibited as they carry out their duties. Unfortunately, the Northern Territory Government chose recently to have an all-out attack on the school community in the Northern Territory, particularly the teachers. Recently it introduced amendments to regulations to change the nature of school councils in the Northern Territory. The effect was to restrict the number of teachers, whether those teachers be parents of members of the school community, who can belong to the councils. The Northern Territory Government has introduced changes to the regulations, making it impossible for more than one-third of the representative number of school council members to be members of the Education Department. In other words, if the parent of a child at a school seeks representation on a school council and he or she is a teacher at another school, and if the membership of the school council is nine people, for example, of whom three members are teachers from within the school, that parent is denied the opportunity to be a member of that school council. That is being done partly because the Northern Territory Government says that the school community in the Northern Territory is not being well serviced by teachers because they are too political. The problem is that the Northern Territory Government is attacking the Teaching Service in the Northern Territory and the teachers. It regards them as too political because they are not prepared to accept the rot that the Northern Territory Education Minister has been handing down to them. They have reacted to the way in which their conditions have gradually been attacked over the past 12 to 18 months by the Northern Territory Government and they are not prepared to accept the attacks on the standards of education that have been forthcoming as a result of the Northern Territory Government's policies. Madam SPEAKER —Order! The honourable member's time has expired. Mr MCGAURAN(Gippsland)(10.35) —I wish to return to an issue that I first raised on the adjournment yesterday evening, and that is the twin problem of, firstly, the favoured commercial advantages that Medibank Private enjoys under this Government and, secondly, the termination of private health fund agencies for Medicare. The Opposition has long believed that Medibank Private is better treated by the Government than private health funds, and now the Voluntary Health Insurance Association of Australia Ltd has commissioned Touche Ross, a reputable firm of chartered accountants, to settle the issue once and for all. Its report found that Medibank Private enjoys a great many advantages over the private health funds. I understand that, in response, the Minister has commissioned Price Waterhouse, chartered accountants, to reply to the report of Touche Ross. Until the issue is definitively settled, I call upon the Government, as have the private health funds already, to provide a three months delay in the termination of the private health funds agency agreements. Only then will the Government be able to make the correct fiscal decision on whether terminating the agencies will save $1.5m in a full year, as the Health Insurance Commission would have us believe. I do not believe that that figure can be substantiated. Medibank Private enjoys a tremendous advantage over private health funds because of its linkage with Medicare, and its membership is increasing dramatically while the membership of private health funds is rapidly decreasing. Medibank Private shares offices with Medicare across the country. Therefore, acting as an agency for Medicare it has a ready-made audience. Medicare takes care of the hospital benefits and Medibank Private can sell its medical benefits. There is also cost sharing with Medicare in the offices, and Medibank Private offers one-stop shopping in the same offices, and that gives it a tremendous advantage over private health funds, which must establish offices for themselves. The most telling point is that Medibank Private has 290 branches throughout Australia to deal with 25 per cent of the claims under Medicare. The remaining 75 per cent are bulkbilled. So Medicare has 290 officers to cope with only 25 per cent of the accounts. If Medibank Private were made to operate as a free-standing fund, it could not survive. No fund could survive with 290 branches throughout Australia. However, Medibank Private flourishes by sharing offices with Medicare. There is no doubt that the Health Insurance Commission is misleading the Government by stating that the termination of the agencies will save the Government $1.5m. I addressed that issue at length last night so there is no need for me to go over old ground. It is essential that the Treasury and the Department of Finance again go over the figures supplied by the Health Insurance Commission, particularly in the light of the report by Touche Ross. Unless there is a three-month extension of the termination of the agencies, the matter cannot be cleared up in time. After all, is it not in the Government's interests to consider the response of Price Waterhouse commissioned by the Government? The Health Insurance Commission operates Medibank Private in a very profit-oriented sense. That is fine; so all government agencies or instrumentalities should have the same profit mentality and profit ethic, so long as they do not have unfair and almost incalculable advantages over competitors from the private sector. That is the crux of the complaint. I want Medibank Private to be as aggressive and profitable as it possibly can be but not when it enjoys so many commercial advantages over the private sector. The truth is that the private health funds in this country are bleeding to death and this Government is standing idly by. Madam SPEAKER —Order! The honourable member's time has expired. Question resolved in the affirmative. House adjourned at 10.41 p.m. The following notices were given: Mr Barry Jones to present a Bill for an Act relating to the purchase of additional shares of the capital stock of the International Bank for Reconstruction and Development. Mr West to present a Bill for an Act relating to the precincts of the new Parliament House, and to amend the Parliament Act 1974, the Parliament House Construction Authority Act 1979 and the Parliamentary Privileges Act 1987. Mr West to present a Bill for an Act to amend the Referendum (Machinery Provisions) Act 1984. The following papers were deemed to have been presented on 17 February 1988: Fisheries Act-Notice-No. 77b (in substitution for the paper presented on 16 February 1988). Public Service Act-Determinations-1988-Nos. 7, 14, 16, 17.