Monday, 18 April 1988 Madam SPEAKER (Hon. Joan Child) took the chair at 2 p.m., and read prayers. Mr Sinclair-Madam Speaker, I wish to make a personal explanation. Madam SPEAKER —I understand that the right honourable member wishes to make a personal explanation. The normal time for making a personal explanation is after the presentation of papers. Mr Sinclair-May I do so then, Madam Speaker. I have been grievously misrepresented. Madam SPEAKER —I suggest that I list the right honourable member as the first personal explanation after presentation of papers. Mr HAWKE(Wills-Prime Minister) —I inform the House that the Minister for Aboriginal Affairs, Mr Hand, will be absent from Question Time on government business and questions normally addressed to him should be directed to the Minister for Employment, Education and Training, Mr Dawkins. Mr CONNOLLY —I refer the Minister for Social Security to his statements at the Victorian conference of the Australian Labor Party last weekend in support of the resolution sponsored by Mr Halfpenny critical of the Government's record on living standards. Is it a fact that in the course of his remarks the Minister said the Government was guilty of double standards in asking ordinary workers to accept a fall in living standards while at the same time finding well paid jobs for ex-politicians? I ask whether he went on to say: Those symptoms reflect the fact that the body language of the Government, the stance of the Government, particular decisions that were made, said to the electorate that as far as the Government is concerned we were going to have one set of standards . . . while for that electorate to whom we preached restraint there was another set of standards. To which particular set of Government decisions was the Minister referring? Mr HOWE —I thank the honourable member for Bradfield for his question. I am very interested to see that he is taking such a keen interest in the internal debates of the Victorian conference of the Australian Labor Party. In the particular resolution to which the honourable member refers, there was no reference to the previous record of the Government. Essentially, that resolution was directed towards the development of economic policy and principal elements of policy in the coming term of government. Indeed, it was an assumption by a number of speakers in that debate that the record of this Government had been admirable. Let me simply refer to some of the essentials of that. In the kind of conditions which have operated in recent years the fundamental of economic policy has been clearly the question of managing to ensure that there is growth in employment, reduction in unemployment and a fair distribution of the burden during very difficult economic times. Indeed, in terms of that debate, that was taken for granted. In relation to the agenda that faces the Government during the current term, which on our side of politics is open to debate throughout the Party, the concern was that there be a fair wages policy; a fair taxation policy and that, in terms of the social wage or social expenditure, those on lower incomes ought to be given appropriate assistance. As I said then and in other debates in the House, I repeat that the record, and indeed the stance of this Government, is no better reflected in any other area than in the area of social security. We have done a great deal to ensure that the expenditure that is outlaid is directed towards those who need assistance. On the other hand, we have been able to bring about a number of very significant reforms. Indeed, John Halfpenny referred to the very significant reform of family assistance as being a model for what he would expect to see the Government achieve in the future. Mrs DARLING —I direct my question to the Minister for Employment, Education and Training. I refer to this Government's concern for the status of women, both in the home and in the workplace. Can the Minister inform the House about the impact of the Government's economic policies on the employment prospects of women? Mr DAWKINS —The honourable member for Lilley raises a very important point concerning the circumstances of women in the work force. It is perhaps by now reasonably well known that this Government, during its period of office, has created over one million jobs throughout Australia. What is perhaps less well understood is the advantage that that has bestowed, particularly on women. There has also been an enormous difference in the prospects for women in the work force during this period as opposed to the period of our predecessors. During our period of government there has been a 5 per cent annual growth in female employment, whereas during the period of the Fraser Government the figure was a mere 1.6 per cent. In other words, we have created jobs for women at three times the rate of that achieved under the period of our predecessors. It is, of course, well known that this Government has had to contend with some very great economic problems during its period of government. It has been the experience that under those circumstances women often suffer in relation to their position in the work force. So it is a very considerable achievement that during these difficult times, women have actually fared better than they have at any time in our past. In the excess of one million jobs that we have created, 57 per cent have gone to women. This has meant that the unemployment rate for women has declined from 10.2 per cent when we came to office to 8.1 per cent now. As a result of this change, there has been an important improvement in the participation rate of women. Indeed, this rate has increased by five percentage points during our time in office and has now reached 50 per cent for the work force as a whole. There have also been substantial improvements in the area of teenage employment. The female unemployment rate for teenagers has fallen by 20 per cent during our time in office. I suppose the most graphic way of putting this great achievement of the Government is to say that one in five women who are now in the work force have achieved that position during the period of this Government. That is, this Government has been responsible during its period of office for putting in the work force one in every five women who are currently employed. This is a performance which we intend to continue. Our policies in relation to education and training are designed to ensure that in the future, as now, women will have at least an equal opportunity to join the work force. Mr PEACOCK —My question is also directed to the Minister for Social Security. I refer the Minister to the situation of families with four children where family income is, for example, about average weekly earnings-that is, about $450 a week. In this case, if income increases by $100, the family actually loses $110. I ask the Minister: Was that one of the things to which he was referring when he is reported to have said, regarding living standards, outside Parliament House this morning, `I am sure those things that have caused us concern in the past won't be repeated.'? Mr HOWE —The answer to the honourable member's question is no. Going to the question of family living standards, which is the thrust of what the honourable member is feigning some concern about, let me say that, in the conditions under which this Government has operated, the Government has nothing to apologise for with respect to family living standards. Above all else, its record in terms of protecting the living standards of low income families stands over and against the record of any previous government. With respect to the living standards of low income families, the Government not only is in the process of meeting its commitments but also has already exceeded the estimates of assistance under the family package. Whilst initially we talked about assisting something like 510,000 low income Australian families through that package, I can say now that over 535,000 families have been assisted. More than one million children are beneficiaries under that particular program. That is an illustration of the way in which the social wage-that is, assistance provided by way of government through family allowances-reinforces the other forms of assistance that are made available. At a time in which there has been a reduction in real unit costs and a real reduction in wages, the Government has given considerable attention to the social wage and the provision of a range of forms of assistance which go to middle income families such as those referred to by the honourable member. I will not go through those various programs, but they do amount to very significant assistance. If there is some suggestion in the honourable member's question that, in terms of the targeting of assistance to very low income families, there are high withdrawal rates, let me say simply that that is a product of targeting. If what we are concerned to do in times of restraint is to provide significant assistance to people who are in poverty or are very close to it, inevitably there will be higher withdrawal rates in relation to those payments. But this Government has nothing to apologise for in terms of family assistance. Indeed, the Government is more than matching the commitments that it has made so far. In terms of its agenda for this term in government, no doubt it will continue to build on the very strong record that it established in the previous term. Ms JAKOBSEN —I refer the Treasurer to the statement issued by the Business Council of Australia (BCA) yesterday detailing proposals to cut $2,500m of government spending. Can the Treasurer inform the House as to whether the Government's commitment to provide personal tax cuts in this parliamentary term is conditional in any way on achieving spending cuts of that size? Mr KEATING —I have already addressed in earlier remarks the proposition from the Business Council that $2.5 billion should be cut out of Commonwealth outlays in the coming budgetary year, 1988-89. I made that point in the context that, even though the Government accepts that fiscal restraint will need to be the order of the day for this coming year and for some years into the future, cuts of this order are not now appropriate, given the great burden of the fall in the public sector borrowing requirement which has been carried on the Commonwealth's behalf. That being said, both the Prime Minister and I have said that over the course of this Parliament we will be looking at providing personal income tax cuts which will not be relying upon these draconian cuts to public outlays, particularly in the most sensitive sectors of the Commonwealth's transfer payments, et cetera. Perhaps a more interesting development than the recital by the Business Council of Australia of $2.5 billion of reductions is the fervour with which the shadow Treasurer has greeted these announcements. In a Press statement he released yesterday he said: While the Business Council's call to reduce government expenditure is welcome, it does not go far enough. The BCA's report supports the thrust of Opposition policy. Or the converse; Opposition policy supports the thrust of the BCA. He said: However, the BCA's target of $2.5 billion in expenditure cuts is somewhat short of the mark. He went on to say: As the recent string of electoral disasters . . . has shown, ordinary Australians are hurting. The decline in living standards must be turned around. Let me turn to some of the specific proposals which do not go far enough, in the mind of the shadow Treasurer, in terms of some areas, particularly the aged and social security. For instance, they include means testing of the pharmaceutical safety net, with exemptions for exceptional medical cases; raising the safety net to 30 prescriptions per individual and 50 per family; tapering the safety net arrangements if concessional prescription rates before were free; levying a small charge on pensioner prescriptions of, say, 50c up to a limit of $50 per annum, saving $35m, the aim being not to reduce pensioners real incomes but to discourage overprescription; raising the maximum payable by the general public to $15 per prescription item-total $100m. Does the shadow Treasurer endorse that proposal? Obviously he does, yet he says that it does not go far enough. The proposals also include speeding up the phasing in of new nursing home arrangements and tightening means and assets testing for community service programs and nursing homes and hostel contributions by asset testing nursing home benefits and varying subsidy according to income-$100m. Obviously that is endorsed and does not go far enough. The proposals recommend, under age pensions on page 26, imputing a yield to assets based on current market value, as was done before 1976, and applying income tests to the higher of the actual or imputed returns; as originally recommended by Professor Gruen, restructuring the assets test for those owning their own house to include the value of the owner-occupied home. The shadow Treasurer is endorsing this. In the policy speech in 1984 he said that `Labor's assets test is un-Australian and I won't have a bar of it'. Today he is saying that these proposals do not go far enough. He now wants to include the value of the owner-occupied home. According to the proposals, savings will depend on the exemption limit chosen, but $100m is possible even with a generous limit. They further include over five years raising the female pensionable age for new pensioners to 65 and to 60 for female service pensions, to make the eligible age the same as for males-$50m savings in the long run. Obviously that is too meek and mild a proposal. It is not tough enough. It is not hard enough. He wants more. We come to the family allowance. The proposal is to abolish the family allowance and increase the income-tested family allowance supplement to $32 per week for children under 13 and $38 per week for children over 13, and to ease the income test-net savings of $100m. `It is too easy', he says. We ought to do more. Alternatively, it is proposed to lower the income test for the joint family allowance to $40,000. That is to lower the income test for joint family income to $40,000, saving $100m, but the shadow Treasurer wants to do better that that. It is very interesting that this reaction should come from the shadow Treasurer at this time because we never have any specificity from the Opposition about expenditure cuts. That term might be over the heads of some of the plebeians on the other side but most of us understand what the term means. There is no specificity from the Opposition on these issues. Those opposite want to run around the country talking about what they would cut. They have talked about how there is waste and extravagance. There is so much waste and extravagance that the Business Council can come up with specified cuts to only $2.5 billion, with this kind of specification. So this debate about how the whole system is awash with money and how the money is wasted and not going to the right places is fine, but when we try to cut some money out of it we come back to this specific program review on expenditures. Those opposite understand that but they are saying that the Government is not cutting enough out of outlays without saying where the cuts should be. Now that the Business Council has said this, those opposite have endorsed it and said it does not go far enough. Where else do those opposite want to go? Let us invite the shadow Treasurer to tell us what other spending cuts he endorses over and above these expenditure cuts. Does he believe that we ought to be cutting these outlays in this way for such people as the elderly people in nursing homes and families by taking away the family allowance while, at the same time, he is crying crocodile tears about ordinary Australians hurting, saying the decline in living standards must be turned around? Apparently, that is a decline in living standards other than for the elderly in nursing homes, for women of pensionable age or for families with children. Apparently those opposite do not care about these people's living standards going down as they promote these cuts. But those opposite are crying crocodile tears about living standards when they expect and look for respectability in business forums by saying, `We have to have a tighter approach to public outlays. We have to cut living standards'. Those opposite are running around saying politically that the decline in living standards will be turned around except for all these people-the weakest people in the community-who will be bashed by proposals from the Business Council and from those opposite. The shadow Treasurer talks about these things while the Opposition urges the abolition of the fringe benefits tax, the capital gains tax and all the other Labor fairness tax measures. Those opposite say that things should be taken away so we will be back to the rorts for their mates, for the crowd they represent-by having no capital gains taxation-and for tax cuts to be funded by cuts to the incomes of the poorest people in our society. That is where those opposite stand. For those opposite to say that they will endorse the cuts suggested by the Business Council but they want more, and to be hiding their light under a bushel about the specificity of the cuts while they try to score off the Government about living standards, says a lot about their credibility-they do not have any. That is why the Business Council regards those opposite as a joke-a collective joke-and why the rest of Australian business also so regards them, because business knows that those opposite did not have the courage in government in the past to do these things and would have no courage to do them in government in the future. I say to the shadow Treasurer: let us have a list of the program cuts. I expect and challenge him to now publish a list which supports the thrust that the cuts are somewhere short of the mark. Let us have an honest debate about expenditure cuts and proper support by the Commonwealth for the aged, the weak and the infirm. Let us have a decent debate. If the shadow Treasurer says, `We want tax cuts paid by program cuts', he should tell us where the cuts should be. He has not bobbed up since Christmas. Last year, when he had the slow start, everyone said, `Well, he is not overreaching himself. That is good'. But he is still not. A year down the track he is still not overreaching himself. He bobs up today to endorse the Business Council and he has endorsed all these 30-odd pages of cuts to public outlays in the most sensitive areas of the Commonwealth's responsibility, to provide tax cuts-no doubt skewered to the top end of the tax system, as those opposite always seek to do. I conclude on this point: Let the shadow Treasurer put together a list of the program cuts he thinks a coalition government would implement to cut outlays by $2.5 billion. Let him tell us then how he would cut taxes paid for by those reduced outlays. Then, and only then, can we have an honest debate in this country about fiscal policy. Mr HOWARD —I ask the Minister for Social Security to tell the House why he believes the Prime Minister should drop privatisation from the Government's agenda. Dr Theophanous —Madam Speaker, on a point of order: the question is clearly out of order. It does not come within the Minister's responsibilities. Madam SPEAKER —The Minister can choose to answer it. I agree with the honourable member for Calwell that the question does not actually come within the portfolio of the Minister for Social Security. Mr HOWE —Unlike the Opposition, let me say, our side of politics is prepared to debate serious issues. Indeed, when the debate is resolved at the Australian Labor Party Federal Conference this year it will be crystal clear what the Party's and the Government's position will be. It is interesting in that context to note that the Treasurer has just directed to the shadow Treasurer a very legitimate question. It is simply this: `If you think the Business Council of Australia has not gone far enough in terms of what it wants to do in relation to Government expenditures, let us be very specific; let us hear what you have to say are the areas that you believe ought to be carved into'. The public sector is under debate and discussion within the Government Party and broadly within the labour movement at present. It is an issue that will be resolved at the Federal conference this year. I do not think that my personal view is of any relevance to the House. Mr CAMPBELL —I ask the Minister for Trade Negotiations whether his attention has been drawn to the editorial in last Thursday's Australian Financial Review which deals with the need to increase our exports of processed minerals. Can the Minister tell the House what the Government is doing to attack protectionism in minerals and metals markets as part of the current round of General Agreement on Tariffs and Trade (GATT) negotiations? Mr DUFFY —I thank the honourable member for Kalgoorlie for his question. I have seen the editorial referred to. I must say that the editorial does not appear to be based on a thorough reading of the Economic Planning Advisory Council (EPAC) paper to which it refers. If the editorial writers had read that paper carefully they would have seen on pages 42 and 43 that the Government launched a major attack on the problem of protectionism in these markets several months ago. Indeed, we have made the most significant and far-reaching proposal on resource products yet to be tabled in the GATT talks in Geneva. Unlike the Australian Financial Review, EPAC has noted this initiative. The details of those actions within the GATT context are in the EPAC report. The proposal put forward by Australia calls for radical reductions in protection for these minerals and metals based on, firstly, the elimination of tariffs and non-tariff measures protecting these markets. Secondly, it calls for an immediate freeze and roll back to zero of export subsidies. Thirdly, it seeks the elimination of all subsidies which disrupt trade in those products. Our far-reaching proposal recognises that although tariffs in many of these markets are relatively low they nevertheless have a significant potential to discourage processing in mineral exporting countries such as Australia. In other markets such as steel there are much more significant non-tariff barriers which impact on Australia, including quotas, subsidies and voluntary export restraints. Furthermore, in coal markets, highly competitive producers such as Australia find themselves faced with massive subsidies to domestic producers in some key markets. In some of these markets government approved subsidies for domestic coalmining are estimated to be as much as 1 1/3 times our annual coal export earnings. As far as advice from the Australian Financial Review that we should seek allies among other resource exporting countries is concerned, this is another area where the Government is some way ahead of it. We have been actively seeking such concerted approaches, although I must note that the problems in these areas are not as well known as those in the agricultural markets. We have taken up bilaterally with the governments concerned the need to eliminate trade distorting production subsidies in particular and Ministers and officials of this Government have continually stressed to their counterparts in Germany and Japan the need to reduce coal subsidies. I consider that the key task at this stage is to draw attention to the adverse consequences of these policies for both producers and consumers, so that agreement can be reached for a global attack on the problem. In this regard, the contributions of EPAC and of the mining and processing industries, which have supported those steps and endorsed the Government's action, have been very welcome. Mr SHARP —My question is addressed to the Prime Minister. Does the Prime Minister agree with the comments of his Cabinet Minister Senator Richardson who says that he is not keen on the Government's arrival tax and that, for a very small amount of money, Australia had got itself an awful lot of derision around the world? Additionally, is he aware of the comments of the former Minister, the honourable member for Parramatta, about this tax, which he described as silly and creating ill will for no good reason? In light of these comments and the unanimous voice of the tourist industry, coupled with the fact that hundreds of thousands of people have refused to pay it, will the Prime Minister now admit that this tax is ill-conceived, harmful, and the worst possible way to promote Australia? Will he scrap it now, before any more damage is done to our tourist industry? Mr HAWKE —The cries from the Opposition about what is happening in the tourist industry of course, like anything that it says in any area of policy, deserve only to be treated with derision in this country. If we look at its performance in the area of tourism and compare it with what has been achieved under this Government, it will be laughed out of court. Having said that, it would be foolish not to acknowledge that the impost to which the honourable member refers has caused problems. Of course it has, and that is why there have been discussions with the industry by the relevant Minister. Those discussions have not yet produced an acceptable alternative way of dealing with this matter. The discussions will go on and if there is a better way of achieving the objective, of course the Government will seek to do that. We are not going to simply lightly dispose of a charge, which is there for good reason, but if there is a better way of achieving the objective, of course we will do it. Mrs HARVEY —My question is directed to the Minister for Social Security. Is the Minister aware of a call by Senator Amanda Vanstone for him to explain why some regional offices of his Department are closed to the public on half a day a week? Will the Minister explain why this is so and explain the broader significance of Senator Vanstone's call? Mr HOWE —I am aware of a Press release that was put out by Senator Vanstone, I think about a week ago. Since the 1986 Budget there have been close to 200 significant policy or procedural changes in the delivery of income security programs by the Department of Social Security. Further, the Department has taken on some additional functions, such as the payment of education allowances provided for by the Victorian Government as part of its social justice strategy. The Department is about to take on a broad range of new functions under the child support scheme. From their experience in answering queries in their electorate offices, all honourable members will be aware of the large amount of information needed to advise members of the public adequately about their social security entitlements. Some regional offices of my Department are closed on Wednesday afternoons for staff training and consultation purposes. Staff in these offices are the ones who have direct front line contact with the social security clients. As honourable members will be aware, my Department is committed to ensuring that these staff, who deal with and implement the large number of changes that have occurred throughout the system, have a thorough understanding of new policies and procedures and have the necessary time to keep on top of the large amount of paper work and data processing that is required. Closures of regional offices occur only after consultation with the community. Provision is made for dealing with emergencies which may occur when an office is closed. This leads to an improvement in the standard of service to clients in the Department. Mr Porter —That is when you can get it. Mr HOWE —As far as social security is concerned, I think that under this Government's administration we have, as Fred Gruen pointed out, squared the circle-unlike the period in which honourable members opposite were in office, when there was a dramatic increase in social security expenditure. That was not because there was any real improvement in the level of benefits; indeed, real declines were occurring in the level of most benefits over time. Expenditure blew out essentially because they could not manage the economy, and ultimately successive Ministers were unable to manage the social security system. It is rather extraordinary that honourable members opposite continually talk about the need to produce cuts. The Leader of the Opposition was, I think, at one time talking about cuts of about $11 billion-no doubt $2 billion or $3 billion out of social security from cuts of that order. He was able to talk about that, whereas under his administration as Treasurer and under the administration of successive Ministers for Social Security from the benches opposite there was a great deal of talk about the need to cut expenditure. The reality is that there was a massive blow-out in social security expenditure at a time in which the real level of benefits which were being paid to individuals was declining. That is what the Opposition is all about-a kind of dual rhetoric. There is a rhetoric for when Opposition members are talking to the welfare community, as the honourable member for Bradfield does from time to time, when they say, `Isn't it sad that benefits are not increasing rapidly enough?', or, `Isn't it sad that the Government is not doing more?'; but when they talk to the Business Council they talk about the need for massive cuts, which ultimately must come off the social security budget. As to this Government's record in terms of policy and administration, we have sought to review policy sensibly and rationally, and as a result of that review we have delivered very significant increases in the level of benefits to people; but in terms of administration, we have pursued a policy of very rigorous administration which has enabled us to fund, in part, the very significant increases we have delivered. Mr SPENDER —My question is directed to the Minister for Foreign Affairs and Trade. What were the circumstances in which the Minister obtained access to the confidential personal files of former Ambassador Cumes? Mr HAYDEN —By requesting them in my ministerial capacity. Mr SCIACCA —Has the Treasurer's attention been drawn to a story on the front page of today's Australian Financial Review headed `AFP's Monaco move cuts tax by $150 million'? Is there any validity in that story? Mr KEATING —I am aware of the story in today's Australian Financial Review. I might say that it is for the Commissioner of Taxation, not the Treasurer, to determine the tax implications involved in reported transactions when all the facts have been made available by the relevant parties. Because of the secrecy provisions of the taxation laws, I am prevented from discussing the affairs of AFP Investment Corporation Ltd, or any other company with the Commissioner of Taxation. Further, I do not think it appropriate for me as Treasurer to comment on the taxation arrangements of any particular company. However, I can make three points about the likely tax effectiveness of the general scheme described by the facts in the Australian Financial Review story. First, on the facts available, it is extremely unlikely that roll-over relief from capital gains tax would be available under the present law. In any case, relief would be available only if the assets remained taxable Australian assets for capital gains tax purposes-that is, I cannot see how the scheme, as described in the article, could defeat the present law. Secondly, if for some reason the scheme did turn out to be effective against the capital gains tax, there is the question of whether it would fall foul of part IVa, the general anti-avoidance provisions of the Income Tax Assessment Act. Third, in the extremely unlikely event that the scheme were for some reason to get through both those hoops it would be open to the Government to introduce specific legislation to address it. I do not need to remind the House that in cases of blatant tax avoidance schemes the Government reserves the right to introduce remedial legislation. However, as I indicated, I do not foresee such action being required in cases of the kind so described. Mr SPENDER —I ask the Prime Minister: Is it government policy, where a Minister has gained access in his ministerial capacity to confidential personal files, that the contents of such files be publicly disclosed? Mr HAWKE —The question asked by the honourable gentleman is obviously a follow-up to that which he has just addressed to my colleague, the Minister for Foreign Affairs and Trade. I have full confidence in the action and decisions of the Minister in this matter. In his statement at the time he made clear the reasons which prompted his action. There was no suggestion that the specific action by the Minister at the time, or in the circumstances in which he took that action, was an indication of any general government policy in regard-- Opposition members interjecting- Mr HAWKE —If honourable members opposite are so dense that they either cannot or will not understand, there is nothing we can do about it. Let me repeat: I have the firmest and total confidence in my Minister on this matter, as in all matters. When he made the decision, he made a very clear statement as to the reasons for it and the circumstances in which he was making it. I have total confidence in his action. Even the most fervent imaginations on the other side could not assume from this some indication of a general government policy in these matters. I repeat: The action taken in the case was related to the particular circumstances, and the Minister has my total confidence in his action. Mr CLEELAND —I ask the Minister for Primary Industries and Energy whether he is aware of claims that the current strong recovery in farm incomes will `impose considerable tax burdens on many farmers still battling heavy overdrafts and high interest payments'. Can the Minister advise the House of the truth of this suggestion? Mr KERIN —I thank the honourable gentleman for his question and for the close interest he takes in the situation of the farmers and graziers in his electorate. I am aware of the claim by the Deputy Leader of the National Party in the terms quoted by the honourable member. It would seem that the Deputy Leader of the National Party has no knowledge of the Australian tax system as it affects farmers. In the first instance, the sentence quoted implies that interest payments are not fully tax deductible when, of course, they are. So, anyone who is battling high interest payments automatically receives tax relief. Of course, interest rates have been coming down. More fundamentally, the Deputy Leader of the National Party seems to have totally forgotten the existence of tax averaging which allows primary producers-and very few others-to offset the tax effect of fluctuating incomes. I think we need to have a look at the effect of tax averaging. A taxpayer earning a taxable income equivalent to average farm cash flow would face an average tax rate this year of some 23.7 per cent if it were not for averaging. But with averaging, the same taxpayer faces an average tax rate of only 18.6 per cent. So averaging is worth some $1,260 in cash terms to such an individual this year. I ask honourable members to focus on that figure of 18.6 per cent because that is why all of the calls for a flat tax of 25 per cent would really knock the farm sector around. The total value to the farm sector of averaging was around $100m in 1985-86. With this year's strong surge in farm incomes, that figure could easily double this year. Whatever justification there may or may not be for various proposals for re-introducing tax-related income equalisation deposits, it is clear that they could never be worth anywhere as near as much to the sector as income tax averaging currently is. Mr HOWARD —My question is to the Prime Minister. Will the honourable gentleman ensure, in accordance with universally accepted principles of ministerial propriety, that Ministers do not use their access to personal confidential files for the purpose of launching public and political attacks on current or former public servants or, indeed, on other persons identified in such files? Mr HAWKE —I remind the honourable gentleman that we have been in government for over five years. We will be there for a great-- Mr MacKellar —Too long. Mr HAWKE —The honourable member's judgment is `too long', but the people have had the opportunity to make a judgment. The next time we go to them, they will make the same judgment. So honourable members opposite should just get used to the fact that they are going to be on that side of the House for a very long time. I am making the point that we have been in office now for over five years. There is no basis for any implication coming out of the mouth of the temporary Leader of the Opposition that this Government has other than a firm understanding of and commitment to the proper principles of government in this area. I repeat-- Opposition members interjecting- Mr HAWKE —As I say, Madam Speaker, the giggle or laugh machine gets going when honourable members opposite have no cerebral contribution to make. We are used to that. I repeat in regard to the instance that was raised in the question by the honourable member for North Sydney that there is no basis from that circumstance from which the Leader of the Opposition or those opposite can draw any general inference. My colleague the Minister for Foreign Affairs and Trade was confronted by circumstances in which not only were the interests of the gentleman concerned involved but also the interests and integrity of a much greater number of existing public servants. The gentleman in question sought to proceed in a way which impugned not merely the integrity of Ministers but also the integrity of a very large number of his own fellow public servants. In that situation, the Minister made a judgment which, in those circumstances, was valid. I repeat: we have been in office now for more than five years. It is simply indisputable that neither the Leader of the Opposition nor anyone else on that side of the House has any basis on that record of government for suggesting that we, in government, do not have a very clear understanding of and a commitment to the proper principles in this matter. The Clerk-Notice has been received from the honourable member for North Sydney of his intention, at the next sitting, to move: That this House censures the Minister for Foreign Affairs and Trade for the following reasons- (1) The Minister's gross abuse in the recent defence debate of the privilege of this House of absolute freedom of speech; (2) that the Minister has demeaned his position as Minister and misused his powers by gaining access to a confidential personal file of a former officer of his Department for the purposes of a premeditated parliamentary attack on him; (3) by these actions he has gravely compromised the system of confidential personal assessments which are crucial to the operations of his and other departments and has attacked the right of Australians to basic protections of privacy. Motion (by Mr Beazley)-by leave-agreed to: That so much of the Standing Orders be suspended as would prevent the member for North Sydney moving forthwith the motion of censure of which he has given notice for the next sitting. Motion of Censure Mr SPENDER(North Sydney)(2.51) —I move- That this House censures the Minister for Foreign Affairs and Trade for the following reasons- (1) The Minister's gross abuse in the recent defence debate of the privilege of this House to absolute freedom of speech; (2) That the Minister has demeaned his position as Minister and misused his powers by gaining access to a confidential persons file of a former officer of his Department for the purposes of a premeditated parliamentary attack on him; (3) By these actions he has gravely compromised the system of confidential personal assessments which are crucial to the operations of his and other departments and has attacked the right of Australians to basic protections of privacy. This motion of censure of the Minister for Foreign Affairs and Trade (Mr Hayden) is brought on four grounds: firstly, by his conduct in the recent debate on defence, he debased the parliamentary forum and grossly abused the absolute freedom of speech we have as members of this House and treated with contempt the reciprocal duty each member has to exercise that freedom wisely and with restraint. Secondly, he has demeaned his position as Minister and misused his powers by plundering the confidential personal file of a former officer of his Department for the personal and private purpose of the public vilification of that individual by a premeditated and vicious parliamentary attack of him. Thirdly, by these actions he has gravely compromised his Department's system of confidential personal assessments which are crucial to the way that Department and other departments make decisions on staffing and promotion. Fourthly, there is a broad fundamental principle that has been attacked by the Minister's conduct-the right of Australians to basic protections of privacy. I remind the House of the answers given today in Question Time. I asked the Minister about the circumstances under which he got access to the confidential personal file of former Ambassador Cumes. There was no quibble that it was confidential and no quibble that it was personal. He said, `By requesting them in my ministerial capacity'. So he got those files in his ministerial capacity. I then asked the Prime Minister (Mr Hawke) a question. I asked him whether it was government policy, when Ministers, in their ministerial capacity, have gained access to confidential personal files, for the contents of such files to be publicly disclosed. The Prime Minister answered it in the way we know well from him. He said that he had full confidence in the actions and decisions of the Minister, that there was no suggestion that this was an indication of some general policy-will he tell us what the policy is if this is not general policy?-and that the Minister had made a very clear statement of his reasons when he came before this House in the defence debate some time ago. We will go to those in a few minutes. A third question was asked of the Prime Minister, by the Leader of the Opposition (Mr Howard). In answer to that question, which was one that sought some reassurances on the question of policy, the Prime Minister gave us his usual homilies on a number of subjects. One of the things he said was that this Government has a firm understanding of and commitment to proper policy in this area. He was saying that the integrity of these files could and should be compromised so the Minister could make the personal attack on Dr Cumes that he did make. What the Prime Minister said was that the Minister was safeguarding the interests of a whole lot of public servants. The Minister got access to the files in his ministerial capacity. He got access to personal confidential files and, so far as this Government is concerned, that is okay. It is okay to get access to those files and it is okay to use those files on the floor of the House. That is what I shall now come to. Let me remind the House of the facts. The victim of this parliamentary attack was Dr J. W. C. Cumes, an officer in the Department of Foreign Affairs for 40 years. He entered as a cadet in 1944 and remained there until his retirement in 1985. The public record tells us that among the posts held during his professional service with the Department were first assistant secretary and three ambassadorships, the last as Ambassador to the Netherlands for the years 1980 to 1984. This former officer has recently published a book on the operation of the Australian political system. In it he makes critical comments about a number of Ministers, including the present Foreign Minister. The Foreign Minister is given mixed reviews. He is praised by the author for showing sincerity and good sense, and the author says of him that he might underestimate his own intelligence. He is also described as vain and pretentious, a bully to those who work under him, and a brooding, devious man who suddenly pounces on his unsuspecting victim with unforgiving zeal. Extracts from the book were published in the Australian newspaper on Saturday, 12 March. It is hurtful to be described in such unflattering and dismissive terms, even though no less harsh criticism is something many members of this House have to endure. The author could not expect a free ride, but the Minister made no immediate response. Twelve days later the Minister intervened and spoke in the debate on defence. I did not hear his speech; I read it later on the final day of that sitting period. This is the first day since that final day that the Minister has been in the House. His speech had nothing to do with defence issues or with foreign affairs issues that relate to defence policy. His speech was made for one private, personal purpose: to use the parliamentary forum, with the absolute immunity from legal action and the wide publicity it attracts, to vilify and damage the character of this former officer. The response given by the Minister on the floor of this House was not the kind of dismissive, contemptuous gesture that is often employed in such a case. It was brooded over, premeditated, researched and detailed. His speech covered over four Hansard columns, which must be some kind of record in the politics of parliamentary abuse. To so debase the privilege of this House by this unique exercise in parliamentary spite was bad enough. After all, the Minister is a person who has been prepared to come to this House and state his conviction in the need for restraint, for decency, for dignity. On a previous occasion, concerning Senator Primmer, he said: The situation has arisen where we are witnessing, effectively, trial by Hansard, conviction by innuendo and I believe, an inexcusable smudging of the character of the people to whom I have referred. It may well have been that Senator Primmer felt justified in initiating action on these matters. Certain information was conveyed to him. He went on to say: I say that allowing for the fact that when we deal with people from outside this Parliament the standards are a little different in that they are not here to protect themselves . . . As, incidentally, his victim was not. The Minister in his reply used for the source of his parliamentary attack something which was quite unforgivable. This was Dr Cumes's personal departmental file. That personal departmental file included assessments made on him at various times during his 40 years service with the Department. So far as I am aware, this is the first that any Minister, let alone a Minister with 27 years service in this House who has held three major ministries, the present one for five years, has used confidential departmental personal files. Remember that there was no quibble by him-they were confidential. They were personal to Ambassador Cumes. He obtained these personal and confidential departmental files by using his ministerial powers. Remember-he said it-that he sought these files as Minister and as the responsible Minister he was the only Minister who could have asked for those files. He has used these files, after compelling their production, for the public slaughter of a former long-serving officer of his own Department. Let me now remind the House of the use made by the Minister of these confidential files and the reasons given by him for his actions. As to his reasons, he presented himself to the House as completely disinterested, a man unmoved and unmotivated by personal anger, who wished only to act in the public interest. He wanted, amongst other things, to defend the former Prime Minister, Malcolm Fraser. We know how deeply it is that the Minister wishes at all times to defend in this House Prime Minister Fraser's reputation! He also said of himself, `I also attract commentary of a rather severe nature. I offer no assessment, however, of the justice or otherwise of that'. Here we have a disinterested man, doing his best in trying circumstances. He said he wanted to answer Dr Cumes's criticisms, to set the record straight. The Minister said: . . . I think for the sake of getting a balanced assessment- note the judgmental term `balanced assessment'- of this matter, in particular to make judgment of his adequacy and his own objectivity to do so, there are some things I should put on the record. Again, we see that judgmental term-on the record. The use then made by the Foreign Minister of this former officer's personal files was extraordinary, even by the standards of a government which has never sought to impose any restrictions on Ministers and their supporters who resort to personal vilification and abuse. The Foreign Minister, in his speech, said of Dr Cumes: I have taken the opportunity of looking at his file. Indeed he had. It is evident that he went through Dr Cumes's personal file with an almost obsessional and neurotic zeal, in what he has told us was a balanced hunt for the truth-and who believes that? In this plundering of the confidential file he quotes from reports at all levels; from a departmental head, a deputy secretary, former departmental assessments of his victim's capabilities and qualities, and comments from dissatisfied subordinates of this former officer. He also refers to an in-confidence report and, at the same time, manages to identify the person who gave that in-confidence report as a deputy secretary. The Minister's quest for unvarnished truth takes him back 31 years. It passes belief that a rational, sensible man would disinter comments made 31 years ago by a departmental assessor in this malicious hunt for statements derogatory to Dr Cumes. The Minister gives the exact date of his researches-11 January 1957-and the quote, amongst other things, says: . . . he is not suited to representational work. That is one opinion that the Department certainly has not observed because Dr Cumes has been sent on three occasions as ambassador overseas. Can honourable members imagine going back 31 years in this obsessional hunt for material damaging to this former officer? Extraordinarily, one might think, not a word in this former officer's favour is to be found. Here we have this balanced hunt for the truth and the Minister seeking only to set the record straight, and not a single word in Dr Cumes's favour is to be found. Having selected his quotes, the Minister went in for the kill. He put the case for the prosecution in the following words: What the record- note again the judgmental use of the word `record'; the Minister is simply a recording angel putting down the pluses and the minuses, although there are no pluses- shows is simply this: Dr Cumes, for all of the pretensions he is engaged in, was indeed a personally vain and pretentious man, was a bully to the staff who worked under him at a series of missions, was incapable of good labour management of those individuals, was lazy and uninvolved and was very much a failure. Remember Dr Cumes's criticism of the Minister: vain, a bully, brooding and devious. How would we describe a man who engaged in the squalid plundering of a confidential file, who intervenes in the defence debate under the devious and transparently false excuse of setting the record straight for the public good and who uses the immunity and the forum of Parliament for his public attack? What was the message for other officers or former officers of his Department? It was one of naked intimidation. Be warned: this could happen to you. Many would think that by his own actions, the Minister has demonstrated the validity of the criticisms made of him by this former officer. But that is not the issue. I am not here to impugn the personality of the Minister, but to censure his conduct. Nor am I here to defend his victim, whom I have never met. Let me say something now about the nature of the files the Minister used. Personal assessments are a cardinal feature of the foreign service and, in varying degrees, of other departments of the Australian Public Service. They are the means by which professional judgments are made for the purpose of employment and promotion decisions within the department. These assessments of the merits, capabilities, strengths and weaknesses of officers may be written, oral or by way of formal assessment. For example, they may be the yearly formal assessments which the department conducts. The assessments go into a confidential personal file. The practice has been for these formal assessments when they are made yearly to go into a designated X-file system-personal files kept in a locked room under the charge of one clerk, although one wonders these days where the personal files are to be found. Are they all to be found in the Minister's office? Of course, the special feature of overseas service in the Department of Foreign Affairs and Trade makes such a system doubly necessary. This system goes to the heart of the operation of the Department because on its operation depends the making of balanced, orderly, professional judgments on staffing and promotion questions. It depends for its operation on two conditions: first, it depends on the ability of those who make the assessments to speak frankly, confident that what they have said will be treated in confidence on a strictly demonstrated need to know basis, otherwise they simply will not speak or will fudge it; secondly, to preserve the system's worth and integrity, to avoid unfair damage to individual reputations and to preserve privacy, it is essential that confidentiality is in fact preserved. Can there be any dispute about these propositions? Can there be any dispute that the Minister's conduct has breached in the most contemptible way the whole basis on which these files are kept? So confidential and so sensitive are these kinds of records that their disclosure is explicitly prohibited. Under the Freedom of Information Act no member of this House would be able to get to Dr Cumes's personal file. Under guidelines issued by the Public Service Board in 1985 an elaborate system of protection against disclosure of personal information, except within the Public Service on a demonstrated need to know basis, is laid down. Let me quote the opening words of the first principles which depend on the privacy principles enunciated by the Law Reform Commission and adopted by this Government. They state: Departments and the Board have an important responsibility to protect the privacy of personal information about staff, former staff and applicants for employment. This responsibility includes obligations to safeguarding the confidentiality of personal records. These guidelines have been directly subverted by this Minister. If Ministers are going to subvert these kinds of guidelines, if, under the guise of a disinterested exercise in parliamentary decency, they are going to use personal records, what officer of what department is safe? The answer is none. The Minister has violated not only the guidelines of his own Department but also the privacy principles which were adopted by that Department and which have been adopted by this Government. Do honourable members remember that we had before this House a privacy Bill? Remember who adopted those privacy principles? It is those privacy principles which have been violated by this Minister. In this exercise we must ask ourselves the question: Was it intentional? The answer is: it most certainly was intentional. Was damage done? The answer is: damage was most certainly done. Were officers of his Department compromised? The answer is: officers of his Department were most certainly compromised because they had given these assessments and expressed opinions on the basis that these expressions of opinion would be kept where they should have been kept, confidential. However, there is a wider question. We have received from this Government over the years assurances about confidentiality and privacy. Remember that it has been this Government, above all governments, which has sought to intrude into the affairs of Australians. I refer to the Australia Card and the Health Insurance Commission. Remember the refrain: this is a government that will protect the privacy of Australians. Well, we have had, of course, the Minister for Community Services and Health (Dr Blewett) on this subject. We may now hear the Minister for Foreign Affairs and Trade on this subject. We have heard the Prime Minister on this subject, speaking about the probity of his Government and its commitments to privacy. Where is it? Every Australian will know that, by the action this Minister has taken, by his support by the Prime Minister and by the support he will be given in a party line vote, this Government can never be trusted with confidential information about Australians, because when it comes to their political interest they will use it, and in this case the Minister cannot even dignify it with political interest. It was a naked exercise in political spite-nothing less, nothing more-and on those grounds this Minister deserves to be censured. Mr DEPUTY SPEAKER(Mr Mountford) —Is the motion seconded? Mr DOWNER(Mayo)(3.11) —I, with pleasure, second this motion moved by the honourable member for North Sydney (Mr Spender), because the issues raised by the Opposition in this censure motion are matters of the very greatest concern and of the very greatest seriousness to the Australian people. This motion raises fundamental issues concerning the privacy generally of all Australians and it also more particularly raises the issue of the integrity of the Australian Public Service. There will be many people in the Public Service today, and former public servants such as me, who will be deeply concerned about the implications of the particular decision that the Minister for Foreign Affairs and Trade (Mr Hayden) took some three weeks ago. The issue at the heart of this debate is not Dr Cumes himself, who was the subject of the Minister's vitriolic attack. We are not standing here to defend Dr Cumes's record. I worked with Dr Cumes for some two months. I know him well enough. Our job is not to defend his record; it is to raise the issue of fundamental principle which the Minister, supported by the Prime Minister (Mr Hawke), has set in motion. Both the Minister and the Prime Minister have now set new standards on the issue of privacy. They have set new standards concerning the privacy of the individual and they have set new standards for the practice of the Public Service. We have now what could be described as the Hayden doctrine. If a retired public servant criticises the Government or Ministers, be they past Ministers or present Ministers, then the Public Service personal privacy provisions are automatically suspended. The Prime Minister admitted this in answering questions from the honourable member for North Sydney and from the Leader of the Opposition (Mr Howard) when he said that these issues of principle relating to privacy are related to particular circumstances. So in some circumstances privacy is all-important and in other circumstances, where the Minister may have got a bucketing from a former public servant, those principles become simply irrelevant. I know most members of this House, be they on this side or the other side, would regard that doctrine as completely incomprehensible. But as the honourable member for North Sydney suggested, it reminds us of the famous quote from the honourable member for Bonython, the Minister for Community Services and Health (Dr Blewett): We shouldn't get too hung up as socialists on privacy because privacy, in many ways, is a bourgeois right. That is a quote that comes back again and again to haunt the Labor Party and is so relevant in these particular and appalling circumstances. This whole issue also challenges the basis of the assessment system in the Public Service on which the whole structure of promotions and appointments within that organisation is based. One cannot possible expect an objective assessment process within the Public Service to work if there is a fair chance that the assessments made by officers are subsequently going to be published. In this particular instance they have been published, all because of an attack on the Minister for Foreign Affairs and Trade which is simply typical of the many attacks that a politician has to live under. I suspect that the Minister for Foreign Affairs and Trade was particularly stung by the memorable phrase from Dr Cumes that he, the Minister for Foreign Affairs and Trade, missed the prime ministership by a whisker and in that happening Australia can renew its rather battered claim to be a lucky country. If that is an example of the approach of the Minister for Foreign Affairs to the fundamental issue of the privacy of the individual, we can see how lucky we were that that did not eventuate but how unlucky we are that the Minister sits in a senior position in the Cabinet. What the Minister has done is to use the files of a former senior public servant, Dr Cumes, and in doing so he has gone beyond the provisions of the Freedom of Information Act, beyond the Public Service guidelines on privacy and beyond the provisions of the Archives Act 1983. Let us consider, to begin with, the Freedom of Information Act. That Act, introduced by the Fraser Government, of course recognises the principle of privacy. When we look at section 41 we see this principle quite clearly. Section 41 provides: A document is an exempt document- that is, exempt from the provisions of the Act- if its disclosure under this Act would involve the unreasonable disclosure of information relating to the personal affairs of any person (including a deceased person). That is perfectly clear. The intention and the wording of the Act are perfectly clear, yet the Minister has transgressed that provision of the Act. He has gone further than any other person could possibly go through the use of the Freedom of Information Act. Let us consider the Public Service guidelines, set out in a personnel manual, that were drawn up by the Public Service Board in cooperation with the Attorney-General's Department. Those guidelines cover this extraordinarily important issue of the privacy of individuals within the Public Service-they are designed to protect that privacy. I draw the attention of the House to some of those guidelines. Guideline 3.7 provides: Where access is requested to documents which discuss the work performance of particular staff members and the person making the request is not the subject of the record, then access should be refused. That is perfectly clear, and the Minister has simply transgressed that important guideline. Section 5 of the guidelines, `Internal use and disclosure to third parties', provides: It is the responsibility of departments to protect the privacy of their staff by safeguarding the confidentiality of personal records held. That is something that did not happen in this case. Further: Where staff members or other parties inside or outside the Service provide information for staff management purposes they can reasonably expect that such information will be used only for the purpose which governed the collection of the information (or a purpose incidental to or connected with that purpose). Those guidelines are perfectly clear. They further provide: Disclosure for other purposes without the staff member's consent- and, of course, Dr Cumes did not consent to this childish exercise- would be a denial of the staff member's reasonable expectation of privacy. That is perfectly clear and that provision was grossly transgressed by the Minister for Foreign Affairs. The guidelines go on and on, detailing precisely under what circumstances the privacy of the individual can be affected. The guidelines further provide: Accordingly, record holders should not release personal information on staff or transfer any record on a staff member to any person within the department or to an outside department or body . . . That is, except in certain circumstances which relate, for example, to internal administrative purposes or routine uses consistent with the purpose for which the information was collected-that is not the case here-or for a disclosure authorised by the staff member in relation to, for example, information that is already in the public domain. In this case it is hardly information that falls into that category because `information in the public domain' is defined by the Public Service guidelines as being information such as that relating to the office held by the officer, the designation and the classification of that officer, and the officer's name and date of appointment to the Public Service. The guidelines are perfectly clear in that respect and in many different sections they have tried to secure-and, in the past, have successfully secured-the privacy of the individual public servant. Those guidelines are not apparent to the Minister for Foreign Affairs and Trade. He has transgressed the guidelines; he has ignored them. Finally, when one looks at the end of the guidelines, one sees some information privacy principles that are based on the 10 information privacy principles recommended in the 1983 Law Reform Commission report on privacy. I would have thought that that was pretty relevant and important information for the Minister to take into account. The section called `Disclosure of personal information' states: A person should not disclose personal information about some other person to a third party unless- (a) the record subject has consented to the disclosure- we know that has not happened in this case- (b) the person disclosing the information believes on reasonable grounds that the disclosure is necessary to prevent or lessen a serious or imminent threat to the life or health of the record subject- we know that does not apply in this case- (c) the disclosure is required (or specifically authorised) by law. We know that does not apply in this particular circumstance. Yet again, wherever one looks in the official documentation one sees that the Minister has seriously transgressed the fundamental principles of privacy, both in the regulations of the Public Service and, implicitly, in legislation that has passed through the Parliament. Let us look at the Archives Act 1983. As honourable members know, that Act describes the 30-year rule. That is, after 30 years, in general, official documents can be disclosed to the public. However, there is one exception to that. After 30 years, private personal information concerning public servants cannot be disclosed to the general public. Even under the Archives Act, what the Minister for Foreign Affairs has done is simply beyond the pale. That legislation makes perfectly clear that the personal records of individual public servants must be properly protected for a very, very long time, far exceeding the 30-year rule. In using the privileges of Parliament, the Minister has chosen to ignore that provision. What is more, the Minister is responsible for the administration of his own Department, and this whole issue raises some very important questions relating to that administration. For example, I have already made the point that Dr Cumes did not give his consent for the Minister to use his personal records in that way. Indeed, I understand that the Minister did not have the courtesy of making Dr Cumes aware that he was to dive into his personal record and read out assessment reports and notes on file that go back as far as 31 years. Secondly, why did not the Department of Foreign Affairs and Trade protect the file from a voracious Minister who was simply going to use it to promote his own political purposes and to bolster his own flagging ego in the face of sustained fire? Why did not the Department protect that file against what is described in the Public Service regulations as accidental or improper release? This was not accidental release; this was improper release of the worst kind. At the end of the day, what we have from this Government is a new doctrine on privacy-a new approach to the issue of privacy-and that is where we come back to the Prime Minister's support for the Minister for Foreign Affairs and Trade in Question Time. Apparently the principles of privacy, which are outlined in the Freedom of Information Act and the Archives Act and set out perfectly clearly in the Public Service guidelines on the protection of privacy, have been suspended in relevant circumstances. That is a reprehensible change to a fundamental doctrine of privacy. When this Government was introducing the identity card and this side of the House was expressing its concern about the privacy of the individual under the identity card, Government Ministers, from the Prime Minister down, continued to try to reassure the Parliament and the Australian community that the protection of the privacy of the individual would be absolute, regardless of the enormous amount of information collected through the ID card. Yet we know that privacy is not properly protected. We know that, as the Minister for Community Services and Health has said, the Labor Party regards privacy as `a bourgeois concept' which can apparently be suspended when the egos of Labor Ministers are somehow piqued by former public servants. This is a fundamentally important issue. The issue of privacy is one of the most important that this country needs to address at any time. On this side of the House we are serious about privacy. We are serious about protecting the privacy of the individual. That is why we have brought this censure motion to the House. The Minister has behaved in a quite reprehensible and disgraceful way on this occasion and I regard his position as completely indefensible. Mr HAYDEN(Oxley-Minister for Foreign Affairs and Trade)(3.26) —I am afraid the last word has not been said on this subject, no matter what the honourable member for Mayo (Mr Downer) and the honourable member for North Sydney (Mr Spender), having spoken on the issue, may conclude. It seems to me that the Opposition, having resorted to raising this matter, is desperate to talk about any subject, except John Stone, a consumption tax and Bjelke-Petersen in Queensland, because these are much more telling issues of concern within their own ranks which have created widespread division. When I listened to the commentary of the honourable member for North Sydney-the attack he launched against me-I immediately thought of the comment made by Denis Healey, a member of the House of Commons, about a conservative politician who had launched an attack upon him. He said that being attacked by that particular politician was like being `savaged by a dead sheep'. I should have thought that a dead sheep was more ferocious than the honourable member for North Sydney! The honourable member for North Sydney wanders around the chamber like an aimless sleepwalker and burbles on like a guppy blowing bubbles at Question Time without being quite clear what it is he is seeking to pursue. The honourable member for North Sydney has declared great concern for Dr Cumes and his reputation. Having declared great concern for Cumes and his reputation, he then set about repeating the criticisms I had made-a great help to Dr Cumes. Having repeated the criticisms, which I admit are rather severe but which come directly from the record and were made by objective assessors of Dr Cumes's performance over the years, the honourable member for North Sydney said that he was unable to refute the allegations made against Dr Cumes and, in fact, did not care to try to do so. The honourable member for Mayo went further. He confessed that he had worked with Dr Cumes on one occasion and, having worked with him, he certainly was not prepared to put up any defence of him. Not only could he not put up a defence, but also it would have been unwise for him to do so because after my address on 23 March he was regaling members indiscriminately, on this and on the other side of the chamber, with his views of Dr Cumes. As severe as my comments may have been-and they were merely a replication of what is on the record-they pale into rather moderate terms compared to what the honourable member for Mayo had to say about Dr Cumes, based on his own experience of him and his assessment of the man personally. All the honourable member for North Sydney has achieved, wittingly or unwittingly, is a regeneration of perhaps some public attention and media commentary from this debate on the book that has been published-a book, the sales of which are badly flagging and which is on the verge of being remaindered. Knowing that the honourable member for North Sydney is a trusting innocent soul, an aimless sleepwalker, as I described him, in the parliamentary institution, someone has come along and said to the honourable member, `Hey, here's a good idea. Why don't you take it up and really get stuck into Hayden. You know how ferocious you can be'. I have it on good authority that the person who approached him then went off and said to certain people interested in seeing the book's sales pick up a bit, `I got him hook, line and sinker. He's going to chase it up'. The honourable member has managed to reinforce the criticisms of Dr Cumes's view. Perhaps there may be some slight flutter of a very marginal interest in the book. What are the real reasons for the honourable member for North Sydney being so passionate on this extraordinarily unusual subject for an Opposition to want to move a censure motion on? After all, there are many issues affecting the country one way or another which one would have thought would have been to the fore of concern of a group of people who presume-the great pretenders-that they are an alternative government, certainly an alternative government, but a government whose time has not yet come and will not come for a long time. What was the real reason? The real reason was simply this: one of the main people I defended was Malcolm Fraser. On 23 March I said: I cannot speak for Prime Minister Fraser but I will say this from my knowledge of him: he would not be as ill-informed, as inadequately briefed, nor as oafish as he is painted in that particular account. I stand by that in spite of any differences I might have had with Malcolm Fraser over time. We were both in the House together. There were differences on issues and differences on priorities. Nonetheless, one develops respect for one's opposite number in this chamber. I developed a great deal of respect for Fraser's integrity on a number of issues. What were those issues? What is the issue in particular on which I defended Fraser that so irks the honourable member for North Sydney? It is the championing of the black people's rights in South Africa. It is Fraser's opposition to apartheid. It is the way in which Fraser made it clear that he was appalled at this disgraceful behaviour by the honourable member for North Sydney who could not bring himself to say that the six people who are to be hanged in South Africa should not be hanged, that there was clear evidence that evidence given before the court hearing had been fixed by the police. Those honourable members who saw the debate between him and me on television on this matter were struck-and members of the Opposition, as much as members on the Government side, have mentioned this to me too-by his discomfiture whenever he was pressed to make a declaration on simple human principles that capital punishment was an unacceptable form of punishment, let alone declaring that, as there had been a confession by one of the key prosecution witnesses that he had given false evidence central to the conviction of at least some of these people, he should denounce the result of that court hearing and require that the executions not be proceeded with. He did not. He was not prepared to do it. Members of his own back bench had to get up in the Parliament, disgusted with his lack of common compassion and sense of responsibility for so failing to do this, and make it clear that they distanced themselves from his behaviour. That is what it is all about. Fraser is not forgiven by people on the Opposition benches who are soft on apartheid, who are apologists for the white supremacist government of South Africa. The honourable member for North Sydney happens to be one of those who are soft on apartheid. That is why he is cranky. Let me make another point about the honourable member for North Sydney. If the honourable member for North Sydney and the honourable member for Mayo are concerned about disclosure of personal and confidential matters, why is it that not once did they acknowledge that the rather severe and very personal criticisms made of Fraser were based on absolutely confidential briefing sessions between professional advisers in the Public Service and Fraser as Prime Minister of Australia? For instance, on one occasion in Brussels, Cumes was there. Cumes gives his account of what took place. If one read it, one would presume that Malcolm Fraser must have been a real knuckle-head. How would ever a man of such limited ability, incomprehension and laziness, who obviously did not even read the brief, ever become Prime Minister of Australia? That is the nub of it, and that is the nub of it all the way through. Cumes has resorted to disclosing matters of great confidentiality to make personal assessments about people on the basis of what he says, of his very coloured account. The honourable member for North Sydney has set himself up as a champion for Cumes. I am pleased that Cumes at last, in his long but faulty career in the diplomatic service, has found a champion. According to his personal file, he could not seem to find them over the years that he was in the diplomatic service. He certainly cannot find one in the honourable member for Mayo who, a fortnight ago, was running around the lobby in Parliament House telling people what he thought of Cumes. That is what he said today. He said, `I worked with him and I will not defend him'. Mr Downer —How do they feel on your side of the House? Mr DEPUTY SPEAKER(Mr Blanchard) —Order! Mr Tim Fischer —It is irrelevant to the principle. Mr Spender —You breached the principle. Are you going to address the issue? Mr HAYDEN —Mr Deputy Speaker, I seek your defence against this personal onslaught from members of the Opposition, particularly the honourable member for Mayo. If people are going to go public like this, they will have to expect that questions will be asked. For instance, Mr Richard Woolcott, our distinguished Ambassador in the United Nations in New York, was asked a question on this matter at the National Press Club. He said: I don't want to comment on the principles involved, except to say that if you write this sort of book, attacking ministers and senior colleagues, I think you'll have to expect there'll be some reaction. Pru Goward, on an Australian Broadcasting Corporation program in Canberra, had this to say: I'm afraid Dr Cumes has broken the Queensberry rules . . . Of course he broke the rules. What did he do when he broke the rules? He set himself up, put himself forward, as some sort of authority on the qualities of other people. What he did was to tell people that his credibility was up for challenge. That is what he did. If one sets oneself up as an authority, and particularly on very personalised judgments about other people, one immediately puts one's qualifications for this claim out in the marketplace. One's credibility is up for challenge. That is one of the simple facts of life. The circumstances of this case are quite unusual. Cumes used his position as a former public servant to make wholesale and highly public personal attacks on political personalities of both political persuasions and on former public service colleagues. He has drawn on his experience of private and confidential relationships for this purpose. It is highly questionable, to say the least, for a retired public servant to use his privileged position in this way. In these circumstances, it is not at all unreasonable for me to challenge the way in which he, in fact, violated privilege. What I have done is to call into challenge his claim to be accepted as an authority to make judgments on others, his capacity for objectivity and his reputation. All of these things are important. Let me read from the record some of the things that people on the other side do not want to defend. This is what the record says: We do not consider that Dr Cumes has the personal and professional attributes that would warrant further consideration on his application in competition with other candidates. It also says: His working hours at the office are short and erratic as is his participation in the work of the Mission. The honourable member for North Sydney would find nothing wrong with that, but there you are. I am reminded that it has taken just on a month for the honourable member for North Sydney to finally get himself cranked up and bring the issue into the House, to get his cognitive processes functioning. He is an aimless sleepwalker; he is also a slow thinker. I am reminded of a story that a judge from the Supreme Court of New South Wales told me: the honourable member for North Sydney when he was practising was frequently rather slow moving off his chair in his clients' interests. One day he was so slow that the particular judge said to him, `What is wrong, Mr Spender? Is the seat of your pants stuck on a blob of chewing gum on the chair?'. Mr Spender —You are a liar. Mr HAYDEN —Oh, John, that is very personal. He is a slow thinker and a slow mover. He did not defend, nor did the honourable member for Mayo. The honourable member for Mayo made it clear that he knew of Cumes and he would not defend him because he knew that what was said was right. On one occasion at a conference a delegate complained that Cumes had not read the brief but insisted on laying down the law to the delegation, sometimes in ways that conflicted with the agreed Australian position. This is another one: . . . `in confidence' report that Cumes has more or less given up work except when absolutely necessary and that this mode of conduct will continue in The Hague. I therefore see very little profit in your writing in detail to him. The list goes on and on. What has the Opposition done? It says that it is so worried about Cumes, his reputation and privacy, that it has given the matter a second run. Hardly anyone noticed it in the newspapers on the first occasion. Unlike the honourable member for North Sydney, I did not run around telling the newspapers that I intended to talk. He did today. As soon as he got up, the Press people all walked out; they knew what was going to happen. I did not tell them. The Opposition has had a re-run today. What did the honourable member for North Sydney do-that great defender of human rights who will not defend six black people who are about to be hanged on falsified evidence, who ducked and weaved when the questions were put to him, who pretends to be a great human rights representative but who always backs out when questioned? What did he do? He guaranteed that all this got a fresh run. Of course, the honourable member for Mayo, being much smarter than the honourable member for North Sydney-if there was any justice he would be sitting on the front bench and the honourable member for North Sydney would be sitting at the back-knew damned well that there was an opportunity to even up a few old scores from years back when he was in Brussels with Cumes. So he was very happy to have the issue brought before the House. He was very happy to say, `I know Cumes. I worked with him and, by golly, because of that I would never defend him'. There are special circumstances in this case and I have outlined them. The reputations of a lot of people were sullied by Cumes. If Cumes is going to do that, if he is going to breach conventions and violate principles, he has to expect to cop it back, because people are going to protect themselves. Madam SPEAKER —Order! The Minister's time has expired. Motion (by Mr Beazley) put: That the question be now put. The House divided. (Madam Speaker-Hon. Joan Child) Ayes . . . . . . . . . . . 69 Noes . . . . . . . . . . . 51 —— Majority . . . . . . . . . 18 —— 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 Kerr, D. J. C.Brumby, J. M. Klugman, R. E.Campbell, G. Lamb, A. H. (Teller)Charlesworth, R. I. Lee, M. J.Chynoweth, R. L. Lindsay, E. J.Cleeland, P. R. McHugh, J.Courtice, B. W. Martin, S. P.Crawford, M. C. Mildren, J. B.Cross, M. D. Milton, P.Cunningham, B. T. (Teller) Mountford, J. G.Darling, E. E. O'Keefe, N. P.Dawkins, J. S. O'Neil, L. R. T.Dubois, S. C. Price, L. R. S.Duffy, M. J. Punch, G. F.Duncan, P. Saunderson, J.Fatin, W. F. Sawford, R. W.Fitzgibbon, E. J. Scholes, G. G. D.Free, R. V. Sciacca, C.Gayler, J. Scott, J. L.Gear, G. Simmons, D. W.Gorman, R. N. J. Snow, J. H.Griffiths, A. G. Staples, P. R.Harvey, E. R. Theophanous, A. C.Hayden, W. G. 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. McArthur, F. S.Beale, J. H. McGauran, P. J.Blunt, C. W. MacKellar, M. J. R.Braithwaite, R. A. Macphee, I. M.Burr, M. A. Miles, C. G.Cadman, A. G. Millar, P. C.Cameron, Donald Nehl, G. B.Cameron, Ewen (Teller) Peacock, A. S.Carlton, J. J. Porter, J. R.Cobb, M. R. Pratt, M. P.Connolly, D. M. Prosser, G. D.Dobie, J. D. M. Reith, P. K.Downer, A. J. G. Robinson, IanEdwards, Harry Shack, P. D.Fife, W. C. Sharp, J. R.Fischer, Tim Sinclair, I. McC.Fisher, Peter Smith, W. L.Goodluck, B. J. Spender, J. M.Hall, Steele Sullivan, K. J.Halverson, R. G. Tuckey, C. W.Hawker, D. P. M. Webster, A. P.Hewson, J. R. Wilson, I. B. C.Hicks, N. J. (Teller) Woods, R. L.Hunt, R. J. D. Wooldridge, M. R. L.Jull, D. F. McLeay, Leo Ruddock, P. M.Uren, T. Shipton, R. F.Lavarch, M. H. Cowan, D. B.Grace, E. L. Brown, N. A.Morris, Allan Moore, J. C.Morris, Peter Lloyd, B.Hawke, R. J. L. Howard, J. W. Question so resolved in the affirmative. Original question put: That the motion (Mr Spender's) be agreed to. The House divided. (Madam Speaker-Hon. Joan Child) Ayes . . . . . . . . . . . 52 Noes . . . . . . . . . . . 71 —— Majority . . . . . . . . . 19 —— Adermann, A. E. Jull, D. F.Aldred, K. J. Katter, R. C.Beale, J. H. McArthur, F. S.Blunt, C. W. McGauran, P. J.Braithwaite, R. A. MacKellar, M. J. R.Burr, M. A. Macphee, I. M.Cadman, A. G. Miles, C. G.Cameron, Donald Millar, P. C.Cameron, Ewen (Teller) Nehl, G. B.Carlton, J. J. Peacock, A. S.Cobb, M. R. Porter, J. R.Connolly, D. M. Pratt, M. P.Dobie, J. D. M. Prosser, G. D.Downer, A. J. G. Reith, P. K.Edwards, Harry Robinson, IanFife, W. C. Shack, P. D.Fischer, Tim Sharp, J. R.Fisher, Peter Sinclair, I. McC.Goodluck, B. J. Smith, W. L.Hall, Steele Spender, J. M.Halverson, R. G. Sullivan, K. J.Hawker, D. P. M. Tuckey, C. W.Hewson, J. R. Webster, A. P.Hicks, N. J. (Teller) Wilson, I. B. C.Howard, J. W. Woods, R. L.Hunt, R. J. D. Wooldridge, M. R. L. Baldwin, P. J. Humphreys, B. C.Beazley, K. C. Jakobsen, C. A.Beddall, D. P. Jenkins, H. A.Bilney, G. N. Johns, G. T.Blanchard, C. A. Jones, BarryBlewett, N. Kelly, R. J.Bowen, Lionel Kent, L.Brown, Robert Kerin, J. C.Brumby, J. M. Kerr, D. J. C.Campbell, G. Klugman, R. E.Charlesworth, R. I. Lamb, A. H. (Teller)Chynoweth, R. L. Lee, M. J.Cleeland, P. R. Lindsay, E. J.Courtice, B. W. McHugh, J.Crawford, M. C. Martin, S. P.Cross, M. D. Mildren, J. B.Cunningham, B. T. (Teller) Milton, P.Darling, E. E. Mountford, J. G.Dawkins, J. S. O'Keefe, N. P.Dubois, S. C. O'Neil, L. R. T.Duffy, M. J. Price, L. R. S.Duncan, P. Punch, G. F.Edwards, Ronald Saunderson, J.Fatin, W. F. Sawford, R. W.Fitzgibbon, E. J. Scholes, G. G. D.Free, R. V. Sciacca, C.Gayler, J. Scott, J. L.Gear, G. Simmons, D. W.Gorman, R. N. J. Snow, J. H.Griffiths, A. G. Staples, P. R.Harvey, E. R. Theophanous, A. C.Hawke, R. J. L. Tickner, R. E.Hayden, W. G. West, S. J.Holding, A. C. Willis, R.Hollis, C. Wright, K. W.Howe, B. L. Ruddock, P. M. McLeay, LeoShipton, R. F. Uren, T.Cowan, D. B. Lavarch, M. H.Brown, N. A. Grace, E. L.Moore, J. C. Morris, AllanLloyd, B. Morris, Peter Question so resolved in the negative. Mr BEAZLEY(Swan-Leader of the House) —Papers are tabled as listed in the schedule circulated to honourable members earlier today. Details of the papers will be recorded in Hansard and the Votes and Proceedings. The schedule read as follows- Commonwealth Grants Commission-Report on General Revenue Grant Relativities 1988-Volume 1-Main Report-Volume 2-Appendixes and Consultants' Reports-section 25 of the Commonwealth Grants Commission Act 1973. Australian Security Intelligence Organisation-Report to Parliament 1986-87-section 94 of the Australian Security Intelligence Organization Act 1979. Motion (by Mr Beazley) proposed: That the House take note of the paper. Debate (on motion by Mr Fife) adjourned. Mr LIONEL BOWEN(Kingsford-Smith-Attorney-General) —I table a report I have received from the Director of Public Prosecutions dated 15 April. This was a matter that the honourable member for O'Connor (Mr Tuckey) raised with me last week. The Director recommended that the report be tabled. It relates to a matter involving the Health Insurance Commission that was the subject of a debate in this House. Mr Fife —Does the Attorney-General propose to move that the House take note of the paper? Mr LIONEL BOWEN —No. I thought it would be a matter that the Opposition may want to look at first. Mr Sinclair —Will the Attorney-General move a motion so that the document can have appropriate confidentiality? Obviously, the nature of the report is such that members of the community will be interested in its contents, whatever the conclusions. I suggest that it would be appropriate that a motion be moved, quite apart from-- Mr LIONEL BOWEN —I do not want to do that at this stage. It is a matter for the House to look at. This is an opinion, and honourable members may want to express a view. Mr SINCLAIR(New England-Leader of the National Party of Australia) —Madam Speaker, I wish to make a personal explanation. Madam SPEAKER —Does the right honourable member claim to have been misrepresented? Mr SINCLAIR —Yes. Madam SPEAKER —Please proceed. Mr SINCLAIR —In the Sunday Telegraph of 17 April 1988 there is an article on page 1, which continues on pages 4 and 5, which makes a number of imputations against me and against members of my staff. The article is written by a person by the name of Fia Cumming, who failed to have the courtesy to contact me or my office, other than, I understand, on Friday afternoon after I had left the place, to determine whether the allegations and inferences within the article were correct. The article itself-and it is of interest following the debate we have just had on privacy-deals with a number of matters which seem to come from her special relationship with a member of the Australian Labor Party rather than from any other cause. They were not included in the provisions of the freedom of information legislation. In the detail of the allegation there are a number of imputations. The first is that the headline says, `Sinclair signs $40,000 perks for staff'. Let everybody be under no misunderstanding: there is no financial benefit to me, nor is there any income tax benefit to me, nor am I in any way a beneficiary of any arrangements that might pertain to my staff. Within the arrangement of employing staff, staff, quite properly, are allowed to claim for absence away from their home base. Those claims are based not on any unsubstantiated assertion but on the basis that they are to cover travel and accommodation while they are away from their own home base. If one looks at the rates that are payable to staff, one sees that the rate in 1984 was $76.45 per day in capital cities; in 1985 the rate was $80.20 per day in capital cities-- Mr Chynoweth —I raise a point of order, Madam Speaker. I do not think that this is a personal explanation. The right honourable member is arguing and pointing out something in a newspaper. There is no personal explanation whatsoever. Madam SPEAKER —The Chair will hear the Leader of the National Party. Mr SINCLAIR —I am explaining this matter because it is suggested that these rates are in some way tax-free perks. It should be understood that the rates to which I refer cover reasonable and normal expenses incurred by members of this House or their staff when they are away from their home. The second assertion is that in some way two members of my staff have utilised their Sydney residential address in such a way as to give them an unfair advantage. I have, in fact, gone through the period covered by the allegations and I am advised that the number of days spent in Canberra for the period 26 February 1985 to 22 August 1986 was 140; the days on duty in Sydney for one staff member were 199; for the other staff member the days spent in Canberra were 187 and the days on duty in Sydney were 189. It should be remembered that the criteria for eligibility of determining a place of residence are in two forms. One, which was advised by the Department of Administrative Services, is that the Public Service regulations state that the home base is the location at which the member of staff spends the most of his or her time or the place at which he or she is ordinarily required to report for duty. In the Members of Parliament (Staff) Act 1984 there are other specific forms of words. It has also been stated: The nominated headquarters should be the location where most time will be spent on duty. That places on staff an obligation to determine prospectively where they will spend most of their time. I submit that that is a very difficult judgment to make in advance of the expenditure having been incurred. In the instance of these two members of my staff, at one stage their place of residence was changed to Canberra because of changes in my office. That was from August 1986 to February 1987. They then determined Sydney would be their place of residence, on the basis of their belief that they would be spending more time, in accordance with the requirements of the place of abode, in Sydney than in Canberra. Obviously it is neither my desire nor theirs that anything other than their entitlement be met. There is no basis upon which I would condone-nor, I suggest to the House, would they-any claims other than those to which they are entitled. It is my intention to seek approval to table a statement relating to the days covered in the period referred to in the newspaper allegations. In doing so, I seek the deletion of the names of the two members, although they are included in the paper. I want to make sure their names are deleted. However, the tabled document would specifically enable members of parliament to see the days and the basis of the claim. If, for the later period, there are any variations in the entitlement, other than in accordance with the regulations, my staff would not be entitled to such payments. I understand, from their advice, that there are no such variations. The other basis for my being misrepresented is a number of suggestions that, in some way, I have instructed the officers of the Public Service Board about the changing of these entitlements. That that is not so is apparent from a letter on page 4 of the Daily Telegraph which quite clearly says: I write to seek approval for- the staff members- to be based in Sydney rather than Canberra. I point out that it is not for me to do other than make a submission in accordance with the regulations. Members of the Public Service Board have available to them information to determine whether or not that approval should be granted. In each instance that approval was granted. If, on the other hand, there is any change on the basis of the number of days spent in accordance with the regulations I will advise my staff and they will re-assume the alternative place of residence, which in their case is Canberra. I put it to the House that all members of staff in this place are at a significant disadvantage. They are not easily or freely able to defend themselves in circumstances such as this. I say to the journalist concerned that I believe her attack on them and on me to be totally unjustifiable. I particularly resent the assertion that in some way I have received $40,000 in perks, tax free. That is absolutely false. I seek leave to table the document. Leave granted. Mr SPENDER(North Sydney) —Madam Speaker, I seek leave to make a personal explanation. Madam SPEAKER —Does the honourable member claim to have been misrepresented? Mr SPENDER —I do. Madam SPEAKER —Please proceed. Mr SPENDER —In what I understand can only be described as the reply of the Minister for Foreign Affairs and Trade (Mr Hayden) to the censure motion, the honourable gentleman said a number of things about me and my motives. Some of the mythical creatures that populate his rather disordered mind, such as a judge he has spoken to or some gentleman who comes into my room, I cannot deal with because the poor fellow is obviously working under some strain. But there are one or two matters that I would like to deal with. He said that I was unable to refute the allegations made against Dr Cumes. I never sought to refute allegations made against Dr Cumes. Mr Beazley —I take a point of order. This is clearly entering into the area of debate. It is not a personal allegation against the honourable member to suggest that he has incorrectly debated the issue. What he is effectively doing is picking up a debating point, regarding it as personal, and seeking to reply to it in the debating sense. Madam SPEAKER —The Chair is listening with some interest to the honourable member for North Sydney and will ensure that he does not debate the issue. He will briefly and concisely show the Chair where he has been misrepresented. Mr SPENDER —I will. Just so the Leader of the House (Mr Beazley) understands it, I will repeat it so it gets easily into his mind. The Minister said that I was unable to refute allegations made against Dr Cumes and that I had set myself up as a champion of Dr Cumes. I never sought to refute allegations against Dr Cumes. I never set myself up as a champion of Dr Cumes. What we were advancing on this side of the House was a principle. What the Minister was advancing on his side was a charade. Madam SPEAKER —Order! The honourable member is now debating the issue. He will resume his seat. Bill returned from the Senate without amendment. Madam SPEAKER —I have received a letter from the honourable member for Tangney (Mr Shack) proposing that a definite matter of public importance be submitted to the House for discussion, namely: The Hawke Labor Government's complete disregard for the freedom of Australian workers through its support of compulsory unionism. 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 J. G. Mountford) Ayes . . . . . . . . . . . 68 Noes . . . . . . . . . . . 51 —— Majority . . . . . . . . . 17 —— Baldwin, P. J. Humphreys, B. C.Beazley, K. C. Jakobsen, C. A.Beddall, D. P. Jenkins, H. A.Bilney, G. N. Johns, G. T.Blanchard, C. A. Jones, BarryBlewett, N. Kelly, R. J.Bowen, Lionel Kent, L.Brown, Robert Kerin, J. C.Brumby, J. M. Kerr, D. J. C.Campbell, G. Klugman, R. E.Charlesworth, R. I. Lamb, A. H. (Teller)Chynoweth, R. L. Lee, M. J.Cleeland, P. R. Lindsay, E. J.Courtice, B. W. McHugh, J.Crawford, M. C. Martin, S. P.Cross, M. D. Mildren, J. B.Cunningham, B. T. (Teller) Milton, P.Darling, E. E. O'Keefe, N. P.Dawkins, J. S. O'Neil, L. R. T.Dubois, S. C. Price, L. R. S.Duffy, M. J. Punch, G. F.Duncan, P. Saunderson, J.Edwards, Ronald Sawford, R. W.Fatin, W. F. Scholes, G. G. D.Fitzgibbon, E. J. Sciacca, C.Free, R. V. Scott, J. L.Gayler, J. Simmons, D. W.Gear, G. Snow, J. H.Gorman, R. N. J. Staples, P. R.Harvey, E. R. Theophanous, A. C.Hayden, W. G. Tickner, R. E.Holding, A. C. West, S. J.Hollis, C. Willis, R.Howe, B. L. Wright, K. W. Adermann, A. E. Katter, R. C.Aldred, K. J. McArthur, F. S.Beale, J. H. McGauran, P. J.Blunt, C. W. MacKellar, M. J. R.Braithwaite, R. A. Macphee, I. M.Burr, M. A. Miles, C. G.Cadman, A. G. Millar, P. C.Cameron, Donald Nehl, G. B.Cameron, Ewen (Teller) Peacock, A. S.Carlton, J. J. Porter, J. R.Cobb, M. R. Pratt, M. P.Connolly, D. M. Prosser, G. D.Dobie, J. D. M. Reith, P. K.Downer, A. J. G. Robinson, IanEdwards, Harry Rocher, A. C.Fife, W. C. Shack, P. D.Fischer, Tim Sinclair, I. McC.Fisher, Peter Smith, W. L.Goodluck, B. J. Spender, J. M.Hall, Steele Sullivan, K. J.Halverson, R. G. Tuckey, C. W.Hawker, D. P. M. Webster, A. P.Hewson, J. R. Wilson, I. B. C.Hicks, N. J. (Teller) Woods, R. L.Hunt, R. J. D. Wooldridge, M. R. L.Jull, D. F. McLeay, Leo Ruddock, P. M.Uren, T. Shipton, R. F.Lavarch, M. H. Cowan, D. B.Grace, E. L. Brown, N. A.Morris, Allan Moore, J. C.Morris, Peter Lloyd, B.Hawke, R. J. L. Howard, J. W. Question so resolved in the affirmative. Consideration resumed from 14 April, of the following message received from the Senate: The Senate acquaints the House of Representatives of the following Resolution agreed to by the Senate this day: (1) That the paper entitled The Canberra Leasehold System prepared by Professor Max Neutze at the request of the Joint Committee on the Australian Capital Territory be referred to the Standing Committee on Transport, Communications and Infrastructure for investigation and report. (2) That the Standing Committee when considering this matter be empowered to sit as a joint committee with the Standing Committee on Transport, Communications and Infrastructure of the House of Representatives when that Committee is considering this matter, under the same provisions as the joint committee empowered by Resolution of the Senate of 3 November 1987, concurred in by the House of Representatives on 5 November 1987, to examine proposed variations to the plan of lay-out of the City of Canberra. (3) That nothing in paragraph (2) be taken to affect the power of the Senate Committee to consider the matter referred to in paragraph (1) or its duty to report to the Senate on this matter. The Senate requests the concurrence of the House of Representatives in paragraph (2) of this Resolution. Motion (by Mr Punch) agreed to: (1) That all aspects of the Australian Capital Territory leasehold system be referred to the Standing Committee on Transport, Communications and Infrastructure for inquiry and report. (2) That the committee when inquiring into this matter: (a) confer with a similar committee of the Senate; and (b) have power to consider and make use of the evidence and records of the Joint Committees on the Australian Capital Territory appointed during previous Parliaments and the paper entitled The Canberra Leasehold System prepared by Professor Max Neutze for the Joint Committee on the Australian Capital Territory appointed in the 34th Parliament. (3) That this House concurs in paragraph (2) of the resolution transmitted in message No. 131 of the Senate relating to the powers and proceedings of the Standing Committees on Transport, Communications and Infrastructure of the Senate and House of Representatives when sitting as a joint committee. (4) That the provisions of the resolution so far as they are inconsistent with the standing orders, have effect notwithstanding anything contained in the standing orders. (5) That a message be sent to the Senate acquainting it of this resolution and seeking its concurrence in subparagraph (2) (b) of this resolution. Debate resumed from 14 April, on motion by Mr Duncan: That the Bill be now read a second time. upon which Mr Peacock had moved by way of amendment: That all words after `That' be omitted with a view to substituting the following words: whilst not declining to give the Bill a second reading, the House notes that: (1) Budget estimates put Commonwealth Government outlays at over a quarter of Australia's GDP, and that this is funded by revenue collection that has made this the highest taxing Government in the post-war history of Australia: (2) the Government has increasingly burdened not only individuals but business with new incentive-sapping taxes like the fringe benefits tax and capital gains tax; (3) national productivity is not expected to rise much more than a dismal 0.5% during the course of 1987-88; and (4) without the incentive to invest and work productively, Australia will find it increasingly difficult to extricate itself from its $87 billion foreign debt strait jacket without further reductions in our standard of living. Mr DEPUTY SPEAKER(Mr Mountford) —Before the debate is resumed on this Bill I remind the House that it has been agreed that a general debate be allowed covering this Bill and the Appropriation Bill (No. 4) and the Appropriation (Parliamentary Departments) Bill (No. 2). Mr MILTON(La Trobe)(4.14) —In my speech on the Appropriation Bill (No. 3) 1987-88 and cognate Bills, which I began last Thursday, I was expressing my considerable concern that, under a flag swapping procedure, the West German companies, Nukem and RWE, with the approval of the European Atomic Energy Community (Euratom), exchanged American and Australian uranium in a complicated manoeuvre which enabled our uranium to be enriched to nuclear weapons grade material. Over the weekend the Director of the Australian Safeguards Office, referring to the ASO 1986-87 annual report, indicated on Australian Broadcasting Corporation radio that he did not believe that our bilateral safeguards agreements were being broken and that comments in the annual report had been misunderstood. I can only say that to my mind the report is quite clear as, in respect of the present principal method used by the International Atomic Energy Agency (IAEA) for assessing the effectiveness of its safeguards program, it notes at paragraph 53: This reported method does not evaluate the probability that undetected diversion might occur or identify the most probable ways in which attempts at diversion would be made. A little further on, in paragraph 54, it refers to a proposed: . . . new method of probabilistic assessment of safeguards effectiveness (pase) which promises to overcome some of the conceptual problems encountered by the IAEA, and its consultants in this work. Finally, in paragraph 62 the report states: Nevertheless, it appears that surveillance remains a major problem area for IAEA safeguards and one where work needs to be done to define with precision where this technique can contribute effectively to safeguards. The point I am making is that there are problems. They have been well known for some years and yet Australia continues to export its uranium to Europe. I would also like to refer to the recent March issue of the European Community's EC News, Volume 6, No. 2, which seeks to justify the flag swapping practice. The EC News states: ``Flagswapping'' of nuclear materials is not a secret or illegal practice: it is compatible with the bilateral agreements that Euratom has concluded with Australia, Canada and the United States. The prior agreement of these third countries is required only in respect of ``flagswaps'' involving nuclear materials outside the Community. The Euratom-Australia agreement permits internal flagswaps in an arrangement that covers all aspects of the management of the agreement and expressly accepts the principle of equivalence, and thus of interchangeability, of nuclear materials. Australia has not, however, so far accepted international flagswaps, and therefore no such operations have been carried out. I should point out that it was in 1981 that the European Community (EC) and Australia signed a 30-year agreement to supply the Community with uranium. A description of a typical flag swap is then given which is similar to the Nukem case I have already detailed, except that it deals with an exchange of Canadian and Australian uranium and does not explain how the obligations or safeguards are exchanged in a way which enables Australian uranium to be enriched to nuclear weapons grade material. Mr DEPUTY SPEAKER(Mr Blanchard) —Order! The honourable member's time has expired. Mr Milton —Mr Deputy Speaker, the timing light was not on and I had no idea that I had only one minute left. I should point that out to the House. Mr DEPUTY SPEAKER —I think that we gave you a certain allowance. Mr Milton —There was no light on and I should have been given another minute. Mr DEPUTY SPEAKER —I appreciate your concern, but we did watch the time very closely. Mr BEALE(Deakin)(4.18) —In rising to debate the Appropriation Bill No. 3 (1987-88) and cognate Bills and to support the amendment moved by the Deputy Leader of the Opposition, the honourable member for Kooyong (Mr Peacock), I would like to address a few comments to the Department of Transport and Communications, in particular the areas of transport and aviation. I should note at the outset that an additional appropriation for 1987-88 from Appropriation Bill (No. 4), is $507,000 and for Appropriation Bill (No. 3), $3,282,000. The first thing that I want to say about transport and aviation is that inefficiencies and outdated management and union work practices in the transport network are costing Australian families and consumers around $10,000m a year. This whole situation in regard to the transport network which is so important for Australia, which is so important for Australia's foreign trade and the movement of goods and people around the Commonwealth, is a disgrace. Furthermore, there is emerging evidence that the country's infrastructure is beginning to deteriorate. Certain roads in northern New South Wales and northern Victoria are actually being turned back from bitumen to gravel because of insufficient funds being allowed for their maintenance. We also have difficulties with our ports, bridges and railways. Unless something is done to address the whole question of Australia's infrastructure we will continue to be uncompetitive in terms of world markets. That will mean that we will continue to be unable to sell more to the world than we buy from it. That means we will continue to have difficulties with our external debt. That means that we will leave to our children an Australia that is so heavily in debt as to make it very difficult for them to discharge their obligations to the rest of the world. Federal road funding has been held at $1,245m for the last four years and so the Commonwealth's contribution to roads around Australia, the Commonwealth's contribution to those arteries on which our cars and trucks move, has actually dropped by 40 per cent in real terms. We understand that the Government is now considering absorbing at least the local government road funding portion of that $1,245m into the general purpose grants to the States. The Government should know that this move is being very strongly opposed by local government, which sees the move as leading to a situation where the States will not pass on the funds to local government and so there will be less money available to local government to spend on this very valuable piece of Australian infrastructure. Road safety, particularly given lower road funding, continues to be of concern to the community. Road accidents round Australia cost the community some $5,000m a year. It is only by giving greater attention to our roads, by spending a relatively greater amount on their construction and maintenance, and by having roads where safety is of importance, that we will be able to get under control this extraordinary cost to the community of some $5,000m a year. That said about roads, the rail systems of Australia, particularly in Victoria, are costing taxpayers $3,000m a year, and the major causes of this disgraceful situation are inefficiencies, restrictive work practices, union power and lazy management. We are in a situation where in most rail authorities around Australia sick leave is rostered. It is just disgraceful that the owners-and they are the governments-and the managements, which are put there by the owners, do not do something about these restrictive work practices that are costing Australian consumers and families about $3,000m a year. We also understand-and perhaps all will be revealed to us in the May mini-Budget-that the Government is torn between the choice of not funding State rail losses, and that may be possible simply by the Commonwealth saying to the States, `If you insist on running your railways at such extraordinary losses, the general taxpayer will not fund those', or by deducting from the general purpose grants to the States an amount that equals the rail losses. It is not easy to find out what is going on in the State railways, because the accounts are prepared in such a way as not to give a true picture of their financial situation. It seems to me that if the directors of those rail authorities were directors of public companies, the National Companies and Securities Commission would be directing those directors to bring their accounts into line with normal accounting practice, so that those in the community who take an interest in that kind of thing could determine exactly how much money the railways were losing. As I said, the Government is apparently torn between not funding the State rail losses-something that could be achieved by taking those rail losses from the general purpose grants to the States-or part privatisation of the existing rail network. We have the extraordinary situation where Australian National, which runs the railway that is owned by the Federal Government and which transports freight in Tasmania and freight and people in South Australia, is apparently considering taking over the Western Australian rail network or, as a minimum, working in closer co-operation with it. What we need to see from the Federal Government is some statement relating to what the Government proposes to do about this extraordinary drain on the community's resources, what it proposes to do about bringing its own railway system into a profitable situation, and what it proposes to do to put appropriate pressure on the States for the States to do the same thing, so that the rail networks around Australia will run efficiently, run on time, run with the goods and people who want to use them, and run profitably. The slow rate of change to lower manning levels and higher technology ships is costing our community hundreds of millions of dollars and making it difficult for Australian flag ships to be internationally competitive. Over the past 10 years-in a program, incidentally, introduced by the honourable member for Gwydir (Mr Hunt)-a slow rate of change to lower manning levels has been introduced in ships that operate around Australia and on Australian flag ships that operate internationally. There has been a slow rate of change, but that rate of change has been so slow as to discourage the owners of those ships from making the necessary investment in ships with greater technology, with more effective communications network, and those would mean lower fuel costs. The slow rate of change of manning levels has meant that there is a disincentive for owners to invest in higher technology ships, and so we have this double effect of manning levels that are in some cases 2 1/2 times those of ships of similar nations operating around the world, and the fact that the owners are not investing in higher technology ships, and hence it makes Australian flag ships quite costly on the coastal routes and it means that they cannot be competitive internationally. The National Farmers Federation, in a recent submission to Government, made it clear that it believes that the situation on manning and low technology ships as far as coastal shipping is concerned is costing the community some $400m and also that the slow rate of change to lower manning levels makes it very difficult for Australian flag ships to be internationally competitive. If we want to develop an overseas shipping fleet that can compete with the rest of the world, if we want to develop an Australian flag shipping fleet that will take our goods competitively to the rest of the world, something has to be done about a much faster rate of change in manning levels and making sure that the owners of the ships move to higher technology ships so that Australia can derive the benefit of that investment and those lower manning levels. The Government has called for 17 separate reports on the waterfront and shipping in the last five years, and none of them have produced any positive result nor will the current Government reviews of international liner shipping and coastal shipping produce any positive results. Everybody knows about the difficulties on Australian flag ships and on the waterfront. Everybody knows what has to be done. Yet the Government is simply calling in report after report, when it knows very well what has to be done to resolve the situation. On the waterfront, on that cosy cartel called the Australian waterfront, overmanning, outmoded work practices, political strikes and ineffective management are costing the country $2,000m a year and severely damaging our international trading reputation. What goes on on the Australian waterfront is an absolute disgrace to the Australian community. The restrictive work practices, the inability of management to focus on the issues and the difficulties with the use of coercive power by the trade union bosses, all of these are contributing to a situation on our waterfront which is an absolute scandal. Our waterfronts are our opening to the world. Our waterfronts are the exit and entry point from which we must get our overseas trading situation under control. People overseas will not buy from Australia if they perceive that their supply of raw materials or manufactured products is going to be held up because of difficulties on the waterfront. We must do something about the waterfront; we must do something to encourage more competition; and we must do something to leave employers and employees free to negotiate their own agreements on the waterfront, which would lead to greater productivity for the benefit of the owner, higher wages for the benefit of the workers and, most of all, reliability, because those agreements would be conducted and agreed to in such a way as to provide sanctions that would be enforceable in the civil courts. In that respect, since this Government has stolen so many of the Opposition's policies, I direct the Government's attention to our industrial relations policy which, if implemented on the waterfront, would make a very positive contribution to resolving the difficulties that are penalising average Australians. Continued restraints on the availability of capital are restricting Australian Airlines and Qantas Airways Ltd in their ability to compete with Ansett Airlines of Australia and internationally respectively. It is now well known, and the Government is conducting a public debate between its factions on this matter, that both Australian Airlines and Qantas require a great deal of money-perhaps $1 billion between them over the next few years-to re-equip their fleets and to update their aircraft so that they can be competitive. The continued deregulation of domestic aviation in Australia will mean that, unless Australian Airlines has more capital with which to re-equip its fleet, it will be gently squeezed out of business. That is a situation that we in Australia cannot allow. Qantas, which requires the bulk of the $1 billion, operates in the difficult and competitive international market and requires more money to re-equip its fleet so that it can compete internationally. In recent days the Government has come up with an absolutely madcap scheme to merge Qantas, Australian Airlines and Air New Zealand. It did not take Ansett too long to recognise that, if that merger went ahead, the cross-subsidisation that would result between the international operations of the merged group and domestic aviation would put a great deal of pressure on Ansett and would have the potential to force Ansett out of business. As soon as Ansett-quite rightly-started to kick up a fuss about that, Australian airlines was excluded from the megamerger. Now we are left in a situation where the Government is still talking to the New Zealand Government about the possibility of merging Air New Zealand and Qantas. I can cite what the Leader of the New Zealand National Party said recently and publicly. Honourable members may know that at present the National Party is 20 per cent ahead in the New Zealand polls. Talking to us here in Australia, the Leader of the National Party said, `We may love you, but you are not going to take our airline', and subsequently he said, `If you do take it, when we come to power we will take it back'. That is what New Zealand thinks about the megamerger, that madcap scheme to bring together the three airlines. I refer to the Government's superannuation plans, because the number of resignations of senior experienced pilots from the three Australian airlines-Ansett, Australian Airlines and Qantas-in the past few months as the Government dithers about with its superannuation plans has increased quite sharply. We now have a situation where about 10 per cent of Qantas's senior pilots and executive staff have decided that, rather than risk having their accrued superannuation benefits taken away under the provisions of the May mini-Budget, they will leave-and they have retired. Mrs Kelly —That is not right. Mr BEALE —It is Qantas I am talking about. There is the same problem where the Minister comes from, because Qantas is taking pilots from the Minister's area. Uncertainty on privatisation and the superannuation plans is affecting manning, morale and management in the two Government-owned airlines. The aviation section of the Department of Transport and Communications continues to have a shocking reputation in the industry for bureaucratic controls, and these concerns are unlikely to be alleviated by the creation of the Civil Aviation Authority, which was the subject of a Bill introduced in this House last week and, presumably, will be the subject of debate in the future. The Federal Airports Corporation continues to suffer teething problems. It is overmanned and is in conflict with the industry over its aggressive charging policies. Finally in this litany of woes from the transport and aviation section of the Department of Transport and Communications, let me say that Sydney Airport is a disgrace. Sydney Airport is the main port of entry for our overseas tourists and, if we do not do something about that airport, tourists will not be able to get into Australia in the years ahead. Something must be done to alleviate the congestion. Radar equipment, high speed exit taxiways, a new international terminal and a new north-south runway must be provided. I call on the Government to do something about Kingsford-Smith Airport in Sydney in the interests of our air freight and tourist industries. In terms of road funding, which has dropped by 40 per cent in real terms in the past four years; in terms of the railway systems, which are costing Australia $3,000 a year; in terms of overmanning and lower technology ships; in terms of the cosy cartel called the Australian waterfront, which is costing Australians $2,000m a year; in terms of the absolute mess into which the Government had led us in relation to the domestic and international airline industries; and in terms of the mess that the Government has produced in respect of transport and aviation, the Government is to be condemned. Mr LAMB(Streeton)(4.38) —It would be remiss of me in these debates on Appropriation Bill (No. 3), Appropriation Bill (No. 4) and Appropriation (Parliamentary Departments) Bill (No. 2) if I did not reply quickly to some of the statements made by the honourable member for Deakin (Mr Beale). He pointed out that there had been a drop in road funding in real terms, but what he forgot to say was that there was a terrific boost in road funding in real terms in the first two years of the five-year plan. If he cares to go over the figures again, he will see that there was a 60 per cent increase in real terms in funding over and above the last year of the Fraser Government in 1982-83. I have not been happy with road funds being plateaued at $1,250m a year, but I am confident that an increase will be announced in the May statement or the Budget this year to a satisfactory level of funding. The honourable member for Deakin was correct when he said that, if we do not look after our roads, we encourage road accidents and we forget the great employment generator of road funding, particularly in rural areas, that results. Let us have none of this cant about our not having enough money for road funding when, in fact, expenditure exceeds comfortably in real terms what was spent under the Fraser Government. The honourable member for Deakin came in with a catalogue of alleged work practices that take place on the waterfront-this Marlon Brando of the waterfront who will put everything right, except for one thing. Under Liberal governments for 30 years from the late 1940s the same situation occurred, yet not once did Liberal governments, more recently the Fraser Government, come up with any solutions. It is symptomatic of the Opposition that its members are full of complaints, full of accusations and full of allegations, but never once do they come forward with a solution, a policy, or a plan that they can put to the people. As long as honourable members opposite fail to give answers to the people, they can continue to expect to sit on that side of the House for many, many years to come. The Opposition would like to lift the restrictions on foreign crewing of coastal ships. It would like to see Australian seamen thrown out of their jobs and displaced by workers from very low wage countries. The Government will not have a bar of that sort of thing. It does not believe that the marketplace alone is the way to determine policies that affect the lives and welfare of Australian families. The Opposition's answer for capital injection into government enterprises-Qantas Airways Ltd was mentioned-is to sell them off, to sell off to the people what they already own. It is the greatest con trick if ever there was one, to sell someone something that they already own. In doing that, the Opposition would increase the concentration of ownership of these valuable infrastructure enterprises like it has never been done in this country before. I turn now to the thrust of the Appropriation Bills by referring to a statement by the Confederation of Australian Industry (CAI) that Australia is on the verge of achieving an economic miracle. In an unusually optimistic economic outlook for an employer group, the CAI's monthly Industrial Review, which landed in my room this morning, said that the Australian economy, after a year of strong growth, appears set to stage a truly Lazarus-like recovery. It is said by rational people that behind every miracle is a rational explanation. We do not have to look far to find what is behind the CAI's economic miracle, and that is because a lot of hard work, hard thinking and decent policies have been put into effect by the Treasurer (Mr Keating) and the Hawke Government. The CAI went on to say that we have had success over the last year or so. Unlike the pseudo recovery from 1983 to 1986, this time we have seen recovery accompanied by interest rates falling rather than rising, the dollar moving up rather than down, inflation receding rather than on the increase. I challenge the statement that there was a pseudo recovery in the first three or four years of the Hawke Government. In those early years, the Hawke Government inherited a disaster and, given the lags of 12 to 18 months in the effect of previous policies, it took a while to get on top of and turn around the disaster that was upon us. One could say that it was one of the deepest recessions that Australia has suffered, under the last years of the Fraser Government, since the great depression. To turn that around when there was the huge adverse terms of trade turnabout where $11 billion was lost per annum in overseas income to this country, and to turn around record levels of unemployment of 10.2 per cent, allowing for lags of the Fraser Government, and inflation in double digit levels, one can only marvel at the economic miracle that is nearly upon us but at the economic miracle of the early years, and perhaps right through the first five years of the Hawke Government. The turnabout-getting confidence and stability in the economy-has been brought about by correct fiscal and monetary policies and restructuring Australian industry, and the good effects will be carried on in coming years. This Government was not anxious to cut demand on government services and spending but, if it was to be responsible, it needed to do so. Even government sucks in imports; even government competes for resources. If the Government was to control inflation, maintain employment and keep a curb on our adverse current account levels-historically that has always been the case-it had to act responsibly. It did not go for a huge cutback in government spending; it acted in a responsible manner such that employment actually grew. In fact, this Government has created 1,011,000 jobs since it took office on 5 March 1983. Where growth was negative in the last years of the Fraser Government, it has increased by between 2 1/2 and 5 per cent. In 1985-86 it was 4.5 per cent. It has now dropped slightly to 2.5 per cent, but there is every reason to believe that the Budget prediction of a 2.8 to 3 per cent economic growth rate will be achieved. On the unemployment front the Government has managed in these tight times to reduce the level from 10.2 per cent, as I said, to 7.4 per cent. It has even dropped a further one per cent and stabilised over the past 12 months. If our participation rates of employment had been maintained over that period instead of encouraging more people into the work force, which we want to do, we might very well have seen an effective unemployment rate of nearer 4.3 per cent. Inflation fell from double digit figures to 7.5 per cent and is now running at 6 per cent; that is despite the inflationary impact of the devaluation of the Australian dollar. That is a rational explanation for the CAI's economic miracle. But, of course, the Government does not expect the Opposition, through the shadow Treasurer, the honourable member for Kooyong (Mr Peacock), to be laudatory about these achievements. In fact, he turned on the CAI and said that the Government had not presided over an economic miracle. One would expect him to say that. Indeed, he had to say it; yet he has given no evidence to support his statement. He claims that talking too much about the achievements of the Government is counterproductive. So this is an example of not just talking down the economy, which is the Opposition's usual forte, but of saying nothing. It has put the gag on, because if the truth is told and it is pointed out that there have been economic achievements under this Government, the unions would be encouraged to put in for gigantic wage claims. So: `It is better to say nothing. Do not be truthful; keep it all quiet'. Last week in this debate, the honourable member for Kooyong said that the comments made by the Director-General of the CAI were misleading and that the wage budget restraints under Labor had not set Australia on the path to recovery. In effect, he said that the unions had not, through the accord, and through the cooperation of the Australian Council of Trade Unions, tightened their belts, that they had not gone without wage increases. In fact, he indicated, as most employer groups do, that there should be no increases and that every application before the Arbitration Commission should be knocked on the head and it should cut into wages. The Opposition would like to see a real drop in wages, not just a drop in the growth of wages. It would like to see families trying to exist on a lesser income. If we went back to the Opposition's economic policies, that would be in the face of inflation. In looking around and in urging our business leaders, the honourable member for Kooyong-the would-be Treasurer-finally found an ally in the New South Wales Employers Federation, which said that the trumpeting of the achievements, the statements by the CAI about an economic miracle, was an invitation to the union movement to pursue a wages campaign. So, here we have amongst business-the confreres of the honourable member for Kooyong-this new principle to hide or distort the truth: `Do not tell the people the facts; they might want something out of it'. Members of this House, and the people, should ask themselves why the Opposition, the honourable member for Kooyong and the Leader of the Opposition (Mr Howard), take this approach. Why are they silent? Why do they not recognise the economic miracle that was pointed out by the CAI? They do this because they have no policies themselves. If they had an alternative strategy, one could take the criticism and their alternatives. But no, it is silence; gag them. Just as they gagged their coalition partners on the consumption tax, they now want to gag business and stop other people on the Opposition front bench from saying anything about the achievements of this Government because they have no wages policy except, of course, the time honoured-or time dishonoured-policy of union bashing. The honourable member for Deakin got up and talked about union activities on the waterfront. He outlined no policies; he just bashed the unions. The Liberals believe that somewhere out there people will believe them. But if they do not have a wages policy, what else can they say? Also, of course, the Liberals have lost the confidence of business. Small business and big business no longer see the Liberal Party of Australia as their supporter because it has failed to show any understanding at all about what restructuring of the Australian economy is about. It has also failed to show any understanding of how to maintain the fight against the twin evils of inflation and unemployment without reducing demand. As all car manufacturers in this country have found, if wages are not maintained, demand for goods and services cannot be maintained. The money is not there. If there is inflation in any section of the economy, such as the car industry, there is even less demand for goods. The ordinary wage and salary earner in Australia is not stupid. Ordinary business is not stupid. They all know that one must have an incomes policy if one is to bring about that fight against inflation and unemployment and still maintain employment and demand. Thus, the Liberals have lost the support of business because they have no alternative polices in the wages or incomes areas. The very split-the very division in their ranks-on just one aspect of tax policy means that business has less time for them and the ordinary Australian no time for them. That one aspect is, of course, the question of consumption tax. Let us suppose that the Opposition had been in government during these last five years. Let us think of the tragedy that would have prevailed in this country if the Fraser Government or another Liberal government under the honourable member for Bennelong had continued in office. I will tell honourable members what would have happened. Because it would have relied on union bashing, deregulation, market forces, slashing of essential government programs and selling off the important government-owned infrastructure of this country, this ideology-led coalition would have plunged this country even further into depression. It believes solely in a price mechanism, user-pays principle. When unemployment increases, when dole queues lengthen, when social security benefits and pensions are cut-and that is what the coalition would do because honourable members opposite talk about $11 billion to $13 billion being cut off government programs-then the standard of living, the welfare of ordinary Australians, young and old, working or maybe not working, and pensioners, will plummet. How dare the honourable member for Kooyong attack the trade unions and say they have not contributed to the `economic miracle' that the CAI pointed to. Ordinary wage and salary earners have tightened their belts and have accepted a 5 per cent drop in real incomes over the last couple of years because they had faith that the fruits of what the Government was all about would be delivered. It is not easy for the ACTU and for the Keltys and Creans of the world to sell that message on behalf of the Government. It can only be sold successfully if the ordinary worker knows that there is light at the end of the tunnel-and the CAI says that there is a light at the end of the tunnel; it calls it `a miracle'-and that the Government is also providing the social wage, which is the other side of the coin, the other side of the contract which is known as the accord. The workers know that we have now reached a point where the Government can readjust its progress forward. It can continue the successful fight to bring about the CAI's miracle and can now devote more government energy, ideas and resources to producing more of the other side of the equation; that is, of the accord. Rather than not being part of this miracle, the trade union movement and the ordinary wage and salary earners have been central to it. The central instrument of the cooperation between the labour movement and this Government has been the accord. It should not be belittled. It has been, as any flexible instrument needs to be, under strain from time to time but the promises must be delivered. So I would take off my hat-if we still wore them in Parliament-to the ordinary working men and women of Australia. But they will not stand by and see a cut in their wages while there is an increase of some 14 to 20 per cent in executive incomes. They will not stand by and see inflation occur under a coalition government. They will not stand by and see cuts in their wages and salaries if business will not invest. Some of the best news, which has come to this House and to the people, shows that over the last six months there has been a dramatic upturn in the amount of business investment in this country. This Government wants to see equity and fairness. It has obtained the cooperation of working men and women because it is a better economic manager; because it has controlled inflation; because industrial disputes are halved; and, more importantly, because the greatest generator of poverty in this country-unemployment-has been well and truly contained. In fact, employment has increased. The success from here on will be maintenance of the social wage, delivery of the other side of the accord and a rejection of calls, such as that by the Business Council of Australia, that there be a $2.5 billion slash in government spending in the next Budget. I endorse the Bills before the House and compliment the Government, as the CAI puts it, on its `economic miracle'. Dr HEWSON(Wentworth)(4.58) —I welcome the opportunity to speak on the Appropriation Bill (No. 3) 1987-88, Appropriation Bill (No. 4) 1987-88 and Appropriation (Parliamentary Departments) Bill (No. 2) 1987-88 and to support the amendment moved by the Deputy Leader of the Opposition (Mr Peacock). I would like to deal with a couple of points that have been raised by speakers from the other side. In particular I hope to say something about taxation and, if there is time available, to comment on this so-called `economic miracle'. Let me begin by informing the House that I find these Bills a little incongruous. As the second reading speech suggested, these Bills seek approval for additional appropriations to meet `essential and unavoidable increases in expenditure' in the course of the fiscal year. What I find disturbing and incongruous is that there are no similar approval processes for additional taxation. Indeed, under the current processes this Government has been subjected to very little scrutiny of its initiatives in the area of taxation. Quite frankly, the Government has got away with murder, given the magnitude of the tax increases that it has been able to rip out of the average Australian since it has been in office. I was fascinated to listen to some of the comments made earlier in the debate by the honourable member for Fraser (Mr Langmore). He attempted to suggest that this is not a high taxing government. He attempted to create the impression that the Opposition is beating this up and that, by world standards, his standards, or whatever, the tax burden in Australia is not excessive. I might suggest that he talk to some of his colleagues who are a little more straightforward and honest in this matter-for example, Senator Cook who, on 1 May 1985, is quoted in the Sun-News Pictorial as saying: The Labor Party is a high-taxing party. It needs to be to carry out its reforms. There is far too little of that sort of honesty in this Government when it comes to assessing its relative economic performance and, in particular, its performance in the area of taxation. It prefers to perpetuate the myth that it is a low taxing Government. And that is precisely what I would like to focus on. I would like to take the opportunity to accept the challenge to talk about the Hawke Government's record on taxation. To my mind it is a record of broken promises, arrogance and hypocrisy. It is a record of taxation by stealth. It is a record of taxation by inflation. It is a story of inefficiency; it is a story of inequity. Even the Treasurer (Mr Keating) is not above the exercise of trying to mislead this House as to the true nature of this Government's performance on tax. In this regard, I refer the House to the 1987-88 Budget Speech wherein the Treasurer made some very interesting comments when introducing the section on revenue. He says: . . . we have adhered to our election commitment not to increase taxes or introduce new taxes. He was, of course, speaking about that particular Budget. He then says that he has been able to cut spending and taxes at the same time. I would imagine that he did this in one of his economic miracles! But in the very next paragraph he goes on to explain exactly how this all hangs together. He states: The capital gains tax, the fringe benefits tax and related measures like many things that are new, were controversial at inception, but are now fulfilling their proper structural function by massively broadening the tax base. I suggest that it is hard to claim that he has not increased tax when he is also simultaneously claiming some merit for broadening the tax base. We can look at the issue of the burden of taxation in a number of ways. I will run through a few of these for the House. I guess the first way to look at this matter is to concentrate on the overall level of Budget revenue which, if we look at the record of this Government, has risen in real terms in every single year that this Government has been in office at an average real rate of increase of 4.7 per cent. This rate of real increase is significantly greater, of course, than that of the Government's predecessors which the Government seems to like to bucket on occasions. In 1983-84 the real increase was 1.6 per cent; in 1984-85, a whopping 10.4 per cent real increase; in 1985-86, a 5.2 per cent real increase; in 1987-88 a 4.1 per cent real increase; this year it looks like the real increase will be about 2 per cent against the Budget estimate of 1.2 per cent and about the same order of magnitude is implicit in the Forward Estimates for the next year. Another way of making the point is to suggest that if Budget revenue had not been increased in real terms, if it had remained constant in real terms over the life of this Government, the Government would have collected about $10 billion less than it has actually collected. Not surprisingly therefore, total tax revenue has risen relative to gross domestic product under this Government. That is something that will withstand the test of time irrespective of the fact that the honourable member for Fraser tried to create the impression that that statistic had not increased over the life of this Government. The Government claims to have been fiscally responsible, to have restrained expenditure and virtually to have balanced its Budget. Indeed, it is now looking to a small Budget surplus this year. We can all guess exactly how it did this. The Government did this-that is right-by increasing taxation. Over the life of this Government, total budgetary revenues have risen by about $33.8 billion-that is, by about 60 per cent, which is well in excess of the total increase in inflation over the life of this Government of about 39 per cent. Over the life of this Government there has been a cumulative real increase in taxation of over 20 per cent. Against that, outlays over the same period have gone up by about 29.4 billion. So the difference between $29.4 billion and $33.8 billion is, of course, the Budget deficit that the Government claims to have eliminated. So the Government has only eliminated the Budget deficit by increasing the overall tax burden significantly. In fact, if we recognise the possibility of a Budget surplus this year of, say, $1 billion, we can see that the Government will have achieved a cumulative net increase in taxation over and above expenditure of about $5.5 billion by the end of this financial year. So I suggest to the honourable member for Fraser and to other Government's supporters who have spoken in this debate that they go back and have a long hard look at their own Budget Papers. They should not just focus on a selective statistic, but take a particularly hard look at the Government's overall revenue performance. One should not of course just concentrate on aggregate Budget revenue. If one looks at the components of revenue, one gets an even more disturbing picture of the Government's performance. Income tax is, of course, the place to start. Income tax has risen by about 79 per cent over the life of the Hawke Government, which is a cumulative real increase of about 40 per cent. Not surprisingly, the tax burden on individuals and families in this country has jumped dramatically. For example, back in March 1983 a single taxpayer on average weekly earnings paid about a 22.9 per cent average tax rate. Today that rate is now around 26 or 27 per cent. His weekly tax bill has gone up from $85 to about $137. Similarly, the average tax rate of a single income family on average weekly earnings over the same period-from March 1983 until recently-has gone up from about 17 1/2 to about 22 1/2 per cent, or their weekly tax bill has gone up from $65 to around $117. That sort of increase in tax is what this Government would have us believe is significant tax reform. The fact is that the tax burden on individuals has jumped dramatically. Apart from new taxes, such as capital gains taxes and fringe benefit taxes, the main reason for this increase in taxation has been taxation by inflation or, as some people would call it, bracket creep. Average income has generally risen over the life of the Hawke Government. Although there have been some adjustments to the tax scales-and these alone have been debated-individuals have generally been pushed into higher income tax brackets. So individuals today face significantly higher marginal tax rates on every dollar that they earn than they did in 1982-83 when this Government came to power. The marginal tax rate for the examples I quoted before was 30 per cent when the Government took office. It is now 40 per cent. I suggest to the honourable member for Fraser and others that they have a long hard look at that sort of statistic as well. The honourable member for Fraser was inclined to suggest that there were not any disincentive effects associated with the current level of taxation. I think a jump in the marginal tax rate from 30 to 40 per cent is sufficient reason to suggest why people do not want to work harder, whey they do not want to work overtime or accept promotion. There are a host of other examples of why the tax system carries a considerable disincentive effect. The Government has raised about $20 billion since its tax reform package was introduced in 1985. It has given back about $6 1/2 billion in tax cuts. So out of every $4 it has raised, it has let us keep $1 and has taken back $3 for itself. This is hardly a record of tax reform. The fact is that the average income earner today is squarely in the middle of the 40 per cent tax bracket. This is a major rip-off. It is not surprising that this rip-off is concentrated on the pay as you earn taxpayer. He is the one who suffers most. It is little wonder that that group in particular, as the Prime Minister (Mr Hawke) is now conceding, has started to mount the argument that this Government has lost touch with the average Australian. I am fascinated at the way in which the Government likes to bucket the performance of the Fraser Government on taxation. If we had kept the same average tax rate during the life of the Hawke Government as we had under the Fraser Government, the present Government would have collected something like $17 billion less in tax. Let me now leave the question of income taxes and have a look at indirect taxes, an area about which, I gather, there has been a fair bit of debate in recent times. Perhaps I should begin by focusing the minds of honourable members squarely on the fact that our existing indirect taxes are, in fact, consumption taxes. The Government, of course, has set out to try to make the Opposition appear to be in particularly difficult economic and political circumstances; it is suggesting that we are looking to have a new tax, that we are looking to introduce a consumption tax. Of course, what we are trying to do is review and reform the whole area of taxation. But, while the Government has been trying to paint us into a corner on this, the facts are that we already have a phenomenal number of consumption taxes in this country. There should be no misunderstanding: we already have a substantial set of consumption taxes. The magnitude and incidence of these taxes should be a matter of great concern to all Australians. I am fascinated that the Hawke Government apparently can find some satisfaction in the present discriminatory and unfair system of consumption taxes. In some cases, it has changed those taxes to its considerable benefit. As a result this is now an area that needs fundamental reform; and it is an area that has a certain inevitability about it for reform, given its unfairness and inequity. It is no good for the Government to stick its head in the sand and poke fun at us. It is a problem that as a government it is going to have to deal with. It is an area that needs genuine reform. The existing consumption tax system is very selective, unfair and inequitable. In some cases the rates of tax are quite draconian and there are glaring loopholes in the way the tax has impacted. For example, over the life of the Hawke Government sales tax, which is the key consumption tax in this country, has gone up by 110 per cent, from about $3.5 billion to $7.5 billion in the current year. This 110 per cent increase is significantly greater than the increase in inflation. Indeed, it is nearly three times the increase of 39 per cent in the inflation rate over that period. It is more than double the 50 per cent increase in wages, salaries and supplements and almost double the 60 per cent rise in consumer expenditure over that period. There has therefore been a very significant increase in revenue taken from the Australian tax paying public through this very hefty consumption tax alone. This year sales tax receipts were estimated to go up by about 12 per cent. According to the latest Niemeyer statement, the revenue from that tax alone is likely to increase by about 18 per cent. So just as there has been an income tax rip-off under the Hawke Government, there has also been a substantial consumption tax rip-off. In addition as I have said, the existing sales tax is quite inequitable. As we have said on previous occasions, there is, for example, a sales tax on ice cream and flavoured milk but not on pornographic magazines. There is a consumption tax on orange juice but not on $1,000 ball gowns. Moreover we all know that the cash economy is rampant. There is also a very strong argument that tourists are getting off lightly in this country, by not paying their fair share of our tax revenue. And finally there is a whole host of services and other loopholes which are not covered by the existing sales tax system. As well as looking at sales tax, let us look at excises. It is in this area that we see some fairly draconian rates of effective tax, sometimes in excess of 100 per cent on certain key commodities. Do honourable members remember what this Government did about excises in August 1983? It decided to index them. This decision took excise rates out of the regular annual review of the budgetary process. So people have now lost sight of the effective tax rates on commodities such as petrol, cigarettes, liquor and so on. As such this is a very effective example of taxation by stealth on the part of this Government. Another area of consumption tax, and one that is very important to this Government, is that of customs duties. Honourable members should recognise that those duties also have a consumption tax equivalent. A recent Industries Assistance Commission report on the level of protection in manufacturing suggested that a `consumption tax equivalent' of about 7.6 per cent was already built into our system of customs duties. I ask honourable members to think about its existing system of consumption tax. How is it that honest and clean living Paul can come into this House and tip buckets on the Opposition for considering the need to reform such a taxation system when, mostly by stealth, he continues to rip the revenue out of the system through a whole range of substantive and inequitable consumption taxes? Corporate tax is another area that has recently received some attention by the Treasurer. Honourable members will remember that at about the time of the last Budget he started to build up expectations about how much could be done in the corporate taxation area and how, to do this, he intended to have a corporate tax review. The suggestions emanating from those quarters at that time were that there would be a review of taxation of superannuation funds and a review of accelerated depreciation allowances available to business, and that both these would be put back in the pot with a view to producing a lower corporate tax rate. Since then, in the aftermath of the stock market crash and a number of other developments, the Treasurer has been trying-most recently in a speech to the Committee for Economic Development of Australia-to downplay expectations as to how much can now be achieved in the corporate tax area. Simultaneously, he has tried to mount an argument that corporate taxation in Australia is not really too high by world standards. There is little doubt, particularly on the part of those who pay it, but more generally by international assessments that we have one of the highest effective corporate tax rates in the world. So again, corporate tax is an area that requires genuine reform. It has been an area of total neglect under this Government. It is an area that will need to be looked at seriously. So, Mr Deputy Speaker, this Government's record on tax is one of absolute hypocrisy and arrogance. It is a record of taxation by stealth. It is a record of taxation by inflation. It is a story of inequity and inefficiency. It is a story of broken promises and hypocrisy. Honourable members might remember some of the statements made in the past several years by leading spokesmen for the Government. For example I refer them to this statement by the Prime Minister in his election speech on 16 February 1983: And here let me make one point so that even our opponents can understand it; and let me make it beyond all their powers of misrepresentation and distortion. There will be no new capital gains tax. Of course, a capital gains tax was imposed in September 1985. Again the Prime Minister, in a rural policy speech on 20 February 1983, said: Labor has pledged not to impose a sales tax or an excise tax on wine. And of course, we know that a wine sales tax was imposed in August 1984. Similarly, at a Press conference on 15 April 1983 the Prime Minister said `there has been no basis for the speculation' that lump sum superannuation tax payments would be increased. Of course, lump sum superannuation tax increased in May 1983, just one month after he made that statement. Finally, on 11 December 1984, speaking on the Australian Broadcasting Corporation program PM, the Prime Minister said: . . . let me make it clear that this is not a country which needs an increase in the tax burden and under my Government it's not going to get it. On the basis of that record, I suggest to the House that Government spokesmen should sit in the House and hang their heads in shame. It is a record of unbelievable dishonesty in the area of taxation when it comes to dealing with and informing the Australian public. Yet there is an inevitability about tax reform. Instead of bucketing us in the Opposition for taking the time and the care and for making the effort to conduct a thoroughgoing review of taxation, after which we will come out with a sensible and viable taxation policy alternative, I suggest that the Government spokesmen get back into their own back rooms and do a bit of the essential work that is required to reform our tax system to one that is consistent with sustainable economic growth in this country. Mr DEPUTY SPEAKER(Hon. J. D. M. Dobie) —Order! The honourable member's time has expired. Mr LINDSAY(Herbert)(5.18) —Appropriation Bill (No. 3), Appropriation Bill (No. 4) and Appropriation (Parliamentary Departments) Bill (No. 2) allow for a wide-ranging debate on services provided by the Federal Government to the Australian people. In the time allowed to me, I will discuss some aspects of higher education and research being carried out in north Queensland. The Hawke Government has long maintained that the higher education system has a central role to play in the process of economic and social adjustment racing Australia. We recognise that Australia and, indeed, the world are now going through enormous changes in virtually every facet of our society. We believe we must respond to the challenges of these events if we are to share in the benefit from the enormous changes that are happening. Most higher education authorities have welcomed these new challenges. They are being challenged to examine their role in the social, cultural and economic lives of Australians and then to examine how effectively they are discharging those roles. It is fundamentally important to the improved development of higher education in Australia that universities be dynamic and innovative. They must continue to explore new areas of research and devise new avenues in teaching in a way which will ensure that graduates are competent to accept responsibly their obligation to help shape the future of Australia. One of Australia's most dynamic and innovative universities, James Cook University of North Queensland, is located in my electorate. Its Vice-Chancellor is the distinguished Australian scientist and educationalist Professor Ray Golding. Over the past years James Cook University has been grappling with many of the challenges to which I have already referred and has, in fact, already taken steps to be able effectively to respond to the needs of the North Queensland region and the nation. This year, Australia's bicentennial year, the James Cook University of North Queensland will celebrate 27 years of university teaching and research in Townsville-first as a university college and then, from 1970, as the James Cook University of North Queensland. It is a university which has its own distinctive character. It has developed a national and international reputation for its research and teaching in a number of areas. It serves a population of approximately half a million Australians and an area four to five times the size of Tasmania. It is Australia's only university located in the tropics, and for the people of north Australia it is their university. Its current student enrolment is approximately 4,300, and by 1990 student enrolment should exceed 5,000, provided that Government funding continues to meet legitimate growth demands. This debate gives me an opportunity to inform honourable members of major scientific and education advances being made in Australia's only university in the tropics. Both sides of politics claim that it is vital for the prosperity of Australia that basic university research be given the utmost financial and structural support. Industry looks increasingly to universities to provide a source of skilled manpower and a knowledge base upon which to build collaboration between universities and industry. This is essential. As I have indicated, universities must be dynamic if they are to capitalise on the cooperation between the academic and industry. Above all, universities must be able to respond quickly to new challenges and to the promotion of new technology. I am pleased to inform honourable members that James Cook University is making significant progress in this direction. It has developed research and teaching strengths with a special emphasis on programs in the broad categories of topics of special relevance to north Queensland, the Pacific region and the tropics in general. Special research training and teaching strengths at the university include biological sciences, with a special emphasis on the tropics; business management; tourism and travel studies; computing and information sciences; earth sciences, with special reference to the mineral industries of north Queensland; engineering and technology, with special emphasis on the tropics, and on cyclones and other natural disasters; living in the tropics, with special reference to archaeology, history, geography, education and culture of north Queensland; marine sciences, with special emphasis on mariculture and studies of the Great Barrier Reef; tropical health and medicine; tropical veterinary science; and tropical agriculture. Last year the James Cook University established the Anton Breinl Centre for Tropical Health and Medicine, and the first chair of tropical health and medicine at an Australian university. This appointment has been taken up by Professor Hedley Peach. Forming part of the Anton Breinl Centre is the new federally funded tropical health surveillance unit at James Cook University. The university is to receive approximately $2.6m from the Hawke Government over the next five years. The centre will have a broad focus of activities-for example, looking at the health of Aboriginal, Torres Strait Islanders and other Australians; examining communicable and non-communicable diseases of the tropics; focusing on both lifestyle and the environment as causes of disease; and the mounting and evaluating of intervention programs. The establishment of the Anton Breinl Centre owes much to the wisdom and foresightedness of the Minister for Community Services and Health (Dr Blewett). The people of north Queensland will be forever grateful to him for his support for the establishment of the Anton Breinl Centre. Medical research was first established in Australia in the tropics. The Institute of Tropical Medicine in Townsville was set up under the directorship of Dr Anton Breinl in 1910. James Cook University has acknowledged history by setting up the Antol Breinl Centre for Tropical Health and Medicine, of which the new Commonwealth health surveillance unit will be a vital part. In addition to the university, Commonwealth and State departments of health, the Australian Institute of Marine Science and medical specialists in the Townsville region will develop further the existing network of research. Tropical medicine has many facets, from the development of new drugs and vaccines, through diagnostic laboratory services, to the delivery of health services to people who actually live in the tropics. While all of these will be part of the new research network, it is the actual medical service to people which promises to give extra strength and interest to these new developments. The existence of efficient health services in the tropics is likely to be of considerable interest in other tropical areas where most of the world's population lives. New systems and technologies will be transferable to developing countries for the benefit of human populations just as agriculture and veterinary technologists have already been exported from tropical Queensland to many other parts of the world. But there is so much to do in our own country. Torres Strait Islanders have a higher incidence of a number of health problems than other Australians. Some of these health problems are proving difficult for doctors to treat and their aetiology is so poorly understood that it is difficult to mount preventative programs. Two such related health problems are pneumonia and middle ear disease. The death rate from pneumonia among Torres Strait Islanders is almost three times that of the rest of Queensland, and the incidence of middle ear disease among these people is far higher than among Caucasian Australians. There are a number of infectious agents which can cause pneumonia and middle ear disease: viruses, bacteria, mycoplasma and chlamydia trachomatis. By not knowing which are the most important agents it is impossible to provide advice to medical officers regarding treatment regimens. Medical scientists are only just beginning to appreciate the role of chlamydia in respiratory disease and middle ear problems. Chlamydia trachomatis is known to cause a severe pneumonia in young children, and in most cases where it has been looked for, a coincident genital chlamydial infection has been found in the mother. Preliminary work at the Menzies School of Health Research in Darwin is pointing to a link between genital chlamydial infection and otitis media in Aborigines. Genital chlamydial infection is extremely prevalent in the Torres Strait and it is therefore very possible that chlamydia contributes significantly to the high prevalence of pneumonia and middle ear diseases. Medical scientists need to know whether this is so. Chlamydial pneumonia and probably middle ear disease will respond to the correct antibiotic but the correct antibiotic to be used can be established only by careful testing of the sensitivity of the organism to antibiotics in the laboratory. If chlamydia turns out to have an important role in respiratory disease and otitis media, prospective studies will be needed to establish whether there is a link between the genital infection in the mother and the subsequent development of pneumonia and otitis media in the children. This would include serotyping to establish that the same type of chlamydia is involved in mother and child. If that turns out to be the case, then screening of women for genital chlamydia infection followed by a course of the appropriate antibiotic should lead to eradication of the reservoir of infection in mothers and children. The investigation of the role of chlamydial infection in pneumonia and middle ear disease requires a laboratory which is equipped to be able to identify the chlamydia organism in sputum, middle ear fluid, and cervical smears through fluoriescence microscopy. Culturing of the organism for testing the sensitivity of antibiotics in order to be able to identify the type of antibiotic and the dose needed to kill the organism in vitro is essential as are serotyping facilities. These laboratory facilities do not exist at Thursday Island Hospital and could be established and staffed by a microbiology technician at Horn Island if funds were available. The eradication of genital chlamydial infection, middle ear disease and a reduction in the incidence of respiratory disease would make an enormous contribution to the health of Torres Strait Islanders. In March this year, the Anton Breinl Centre requested $200,000 a year for approximately three years to provide technical support for the project, which would allow for the development of cultures and serotyping together with antibody sensitivity testing. If the funding were made available it would be possible to isolate the causes of these diseases which have long term debilitating effects on the Torres Strait Islanders. However, the Minister for Aboriginal Affairs (Mr Hand) advised me approximately two weeks ago that the Department of Aboriginal Affairs does not fund research into Aboriginal health as this is the function of the National Health and Medical Research Council. It is a great disappointment to me that this urgently needed funding has yet to be approved. The health and welfare of the people of the Torres Strait Island are far more important than any other prospective program for their development. No amount of money, no so-called worthwhile project can take the place of the health and life of one Torres Strait Island person. This program, by any yardstick, is fundamental to the health and welfare of the people of the Torres Straits and I again call on the Government to provide the money sought by the Anton Breinl Centre for Tropical Health and Medicine so that this important program can get under way as soon as possible. To delay the program in the face of the continuing presence of the diseases is intolerable. Last year the James Cook University of North Queensland also established the Centre for Studies in Travel and Tourism and Australia's first academic chair of tourism. The centre, which this year received its inaugural intake of students, offers a full time four-year program leading to the degree of Bachelor of Administration (Tourism). Established as a direct response to the growing need for qualified professionals in Australia's tourism industry, the centre aims to attract students and research projects throughout Australia and its South Pacific neighbours. In Queensland alone, tourism has created approximately 40 per cent of new jobs over the last five years. This is an important initiative for the development of the fastest growing industry in my state of Queensland. The new chair of tourism has been well supported by the Australian tourism industry. Primary funding has been received from the Australian Tourism Industry Association, the Australian Federation of Travel Agents and the Queensland Tourist and Travel Corporation. James Cook University of North Queensland has also given priority to studies and research into tropical ecosystems and their conservation and management and human adaption and cultures in the region. For example, in 1987 the university established the Australian Centre for Tropical Freshwater Research. It is Australia's first centre to study freshwater in the tropics. Funding for the centre is provided by a $250,000 a year grant from the Federal Government and, through the Australian Water Research Advisory Council, the centre is receiving additional assistance. It also receives $75,000 a year from the Queensland Water Resources Commission. Funds have been guaranteed for three years in the first instance, with extensions likely beyond that period. The Australian Centre for Tropical Freshwater Research has three initial objectives. The first is to help to understand the physical, chemical and biological behaviour of tropical water storage such as at the Ross River and Burdekin dams. The second is to study run-off, erosion and the soil leeching processes in tropical environments; and the third is to improve information currently available on tropical freshwater streams and waterways. As tropical Australia accounts for an extremely large part of the continent's freshwater resources, the centre in Townsville is of great importance, not only for the study of freshwater in the tropical environment, but also for its ecosystems. The Australian Centre for Tropical Freshwater Research is uniquely placed to undertake research into both wet and dry tropics. The development of expertise in these areas, studies and research will be of enormous benefit not only to northern Australia but also will have potential for export to South East Asia and Africa. In its early years the university sought to serve the educational and research needs of north Queensland, by providing courses of relevance to north Queensland whose economic importance is only now being exploited. Now James Cook University has broadened its focus away from just north Queensland. In a very proud way and more than ever before it is serving the needs of Australia. To fulfil this role of service to Australia, James Cook University must receive adequate funding. Like all other Australian universities, it has seen no major increase in funding levels. At the moment, James Cook University is exploring ways of obtaining money from non-government sources to enable it to continue to develop teaching and research programs to meet the needs of a range of industries. The James Cook University of North Queensland has enthusiastically accepted the challenge of the nation to provide worthwhile and fundamentally sound higher education. It has the ability and academic excellence to achieve this objective-and more. James Cook's Vice-Chancellor, Professor Ray Golding, has recently assured this Government: The development by each institution of an educational profile which describes the institution's existing course mix, and its future strategies building upon its strengths, is essential if each institution is to meet the higher education needs of its community and contribute to the national priorities. James Cook University has shown successfully that individual entity does not mean a narrow prospective or approach, but is a way for an institution to contribute effectively to the higher education needs of the nation. A great deal still needs to be accomplished, but James Cook shows that a major series of developments can be successfully initiated. I am proud to have within my electorate the James Cook University of North Queensland. While it continues to exist, Australia will continue to build and be a stronger and much better nation. Mr COBB(Parkes)(5.37) —This afternoon we are discussing the Appropriation Bills. I would particularly like to concentrate on the section on foreign aid which, I believe, is relevant to the recent trip of the Minister for Foreign Affairs and Trade (Mr Hayden) when he visited Africa earlier this year. During that trip he pledged $100m in aid over the next three years to African states. This will go to states mainly that border South Africa which is a country which the Minister has labelled with some relish as the `great international leper of our time'. So apparently most of this money will go to the so-called front line states of Mozambique, Zambia and Zimbabwe, as well as Angola, Botswana and Tanzania. Africa is several thousand miles away, across the other side of the Indian Ocean. I think it ironic that we are giving that aid at the same time as, nearer to home, Papua New Guinea is having foreign aid money withdrawn. Papua New Guinea, I remind honourable members, is a parliamentary democracy which upholds principles similar to our own. This is in contrast, for example, to the money given to Mozambique which is a one-party dictatorship, set up on Marxist-Leninist lines and closely allied with the Soviet bloc. Mozambique allows no opposition parties, no expression of dissent and has trouble with border disputes with even a most moderate independent country such as Malawi. Ever since Portugal pulled out of Mozambique in 1975 the Government forces there, called Frelimo, have ruled the country ruthlessly. They have a strongly centralised administration which is rife with corruption and incompetence. The troubles, we must remember, of this once rich country, this beautiful country, are largely of its Government's own making. It blames all its woes on South Africa which, it claims, funds the so-called rebel group Renamo. Let us cast our minds back to 1984 when the Nkomati accord was signed between South Africa and Mozambique. There were a couple of main conditions. One was that Mozambique would not harbour any African National Congress rebels who were attacking South Africa. Secondly, in return South Africa would provide no funding for Renamo rebels. All the evidence points to South Africa having kept its part of the Nkomati Accord but Mozambique has not. Accusations are constantly made that South Africa funds Renamo. I can find no evidence whatsoever of this funding. It all seems to be hearsay from Frelimo sympathisers. The United States Ambassador to Mozambique, Mellisa Wells, reported that she could find no concrete proof to substantiate this claim. Helga Jensen of the Washington Times, and Sharon Behn of the Independent could not find any evidence. Also, Lord Michael Cecil of the Sunday Times could find no evidence. As well, the International Institute of Strategic Studies, which is London based, found when it investigated this claim that Renamo was self-sustaining and depending largely on weaponry captured from the Frelimo forces themselves. It was found that the weaponry was largely Russian. United States correspondent, Richard Grenier, writes that the Renamo soldiers he met had no uniforms, their weapons were old Soviet AKs and grenade launchers and they communicated with an ancient hand-cranked telephone. They also had to walk to get anywhere as they had only one motor cycle between them. Renamo is led mainly by veterans who have broken away from Frelimo forces in which they fought as freedom fighters against the Portuguese but left when they became disillusioned with Marxist policies after Frelimo came to power. Renamo now controls most of the country. However, Renamo soldiers are in rags, using antiquated weapons with limited ammunition, damaged rifles, and are barefoot. They have only a few radio sets between them and a few SAM-7 anti-aircraft missiles. If South Africa is funding them, it is doing it in a very poor way. In fact, the truth is that South Africa is funding Mozambique. South Africa has transport engineers in the country servicing locomotives and aircraft. That is also done in South Africa itself. There are many legal Mozambican workers in South Africa. In fact, there are 60,000 legal workers as well as 200,000 illegal workers. They remit money to Mozambique. I have been able to trace that 84 million rand was remitted to Mozambique in 1985. South Africa has helped to upgrade with grants the sugar factories in Mozambique. South Africans are working with Mozambicans to revitalise the Cabora Bassa hydro-electricity scheme. They have poured 7 million rand into upgrading the Maputo harbour port facilities. However, Mozambique continues publicly to denounce South Africa. This Government also runs that sort of line. The Renamo success depends on the deep unpopularity of the Government. When Portugal left Mozambique in 1975 the Frelimo guerillas who fought the long colonial war against Portugal grabbed power. As part of the socialist experiment they put the peasants into collective villages which, as honourable members can guess, has ended in disaster. People have resented and rebelled against this. As in most African countries, the blacks do not get a vote in Mozambique. The leader of the Renamo freedom fighters, Alfonso Dhlakama, has laid down the conditions that Renamo wants. Basically they are that all foreign troops should lead Mozambique and that the country should have free and internationally supervised elections. To me that sounds totally reasonable and totally democratic. One would think that the Government in this country would support that position, but no, it supports the Soviet-backed dictatorship which denies black people in Mozambique the vote and, at the same time, rejects a popular movement that wants simultaneously to give them the vote and reject communism. Let us look at the foreign troops in Mozambique propping up the Frelimo government. There are 15,000 Zimbabweans, including the 6th Brigade which takes part in actions against the civilian population known to be sympathetic to Renamo. The 6th Brigade soldiers play a leading offensive role. In fact, on 28 April last year they reoccupied the independent town of Morrumbala, rounding up suspects and beheading them. Like the North Korean trained 5th Brigade in Zimbabwe, which shot over 20,000 civilians in Matabeleland, the behaviour of those soldiers at times has been abysmal. As well there are 5,000 Tanzanians in Mozambique. There are 10,000 Eastern bloc military and technical personnel, including 2,261 Soviets, 1,038 East Germans and 2,202 Cubans. Since 1975 the Soviets have put over $1 billion in military hardware into Mozambique. For example, on 27 August last year they delivered four MI8 helicopters to that country. Frelimo officials regularly visit Moscow for military discussions. As well in Mozambique there are 3,000 Zambians. There are 2,000 Malawians, mainly in defensive positions along the Nacala corridor. Of course, Britain trains Frelimo officers inside Zimbabwe. Portugal, France and Spain have had recent approaches from Frelimo asking for military defence assistance. As well, there are several hundred South African technicians, as I mentioned previously, assisting in ports, harbours, railways, aircraft maintenance, food, electricity and the spare parts area. In spite of all these foreign troops and aid the Frelimo Government is still a corrupt shambles. The Anglican and Catholic bishops of Maputo, supported by seven other bishops, have written making an impassioned plea for negotiations between the Government and Renamo forces as the only way to peace. So far perhaps 100,000 people have lost their lives in the fighting alone but this reasonable request is rejected by Frelimo. The media in Australia, especially the Australian Broadcasting Corporation (ABC), which one would think had a duty to report such events, have put a near total news blackout on this. Only the inaccurate pro-Frelimo, anti-South African, anti-Renamo line that fits the ideologies of the ABC hierarchy is run in this country. For example, it always labels the Renamo forces as `rebels', never as `freedom fighters'. Renamo now controls at least one-third of the population and 85 per cent of the territory. This is a far greater proportion than ever the Mujahideen had in Afghanistan. Renamo has grown from a mere 2,000 guerillas in 1981 to nearly 20,000 today. It is twice the size that the communist Frelimo movement was when the Portuguese pulled out in 1975. Despite this, the country is still in ruins. For example, Maputo, the capital, once the Riviera of Africa with cafes, villas, beaches, fountains, gardens and tourists, now is little more than a picture of desolation and decay. There are no taxis and no buses. There are abandoned railway carriages. Vehicles have been abandoned for lack of spare parts. It is difficult to buy anything there. Shops remain open but there is nothing on their shelves. Houses have no water, no electricity or even glass in the windows. The only relief from this despair are the occasional expensive, air-conditioned limousines gliding around the streets with top bureaucrats and Frelimo officials in them. Such people live in fine houses with many servants and have exclusive access to speciality shops stocked full of fine goods, mainly imported from South Africa. United States correspondent, Richard Grenier, writes that the government officials and their wives are always beautifully dressed and are as natty as Mikhail and Raisa Gorbachev. The present names of once splendid avenues in Maputo are revealing. There is the Karl Marx Avenue, the Friedrich Engels Avenue and Vladimir Lenin Avenue, Mao Tse-tung has an avenue named after him, as do Salvador Allende, Ho Chi Minh and so on. I can report that history is nothing if not consistent and the economic and human rights successes of past socialist luminaries have been faithfully replicated throughout the length and breadth of Mozambique. Mr Hicks —To the detriment of the people. Mr COBB —That is correct. As African correspondent Bruce Louden reports, when the Portuguese left Mozambique there was a thriving export-oriented industrial sector. But by late last year this had been reduced to a single factory producing car tyres. Even that has been crippled as a result of an inability to get spare parts for production equipment. Frelimo started to go wrong when the original Frelimo freedom fighters, who had battled against the Portuguese, were infiltrated at the leadership level by a Marxist faction that had been trained in Algeria. They became known as the Algerian gang. They still make up the top Frelimo leadership today, including Chissano, the President. This gang grabbed power when the Portuguese fled in 1974 after the socialist coup in Lisbon. The socialist-communist coalition that came to power in Portugal did not grant elections in Mozambique despite the existence of several healthy parties. So Frelimo became installed in 1975 and the infamous Samora Machel set up his equally infamous concentration camps. All property was nationalised and gross human rights abuses soon abounded everywhere. Hunger and unemployment soon followed. The Soviets and other Eastern bloc neo-colonials soon plundered Mozambique's natural resources, including its human resources. Children were sent overseas for indoctrination. Slave labour was exported. Ten thousand were sent to East Germany. When many decent Frelimo members saw what the Algerian gang was doing they felt that their independence, for which they had fought so hard, had been betrayed. The Portuguese colonialism had simply been exchanged for an even worse Soviet colonialism. Today there is increasing tension and disillusionment between Frelimo's political and military wings. The political wing consists predominantly of non-black communist party members. However, the army is almost exclusively black and more concerned about Mozambique itself and the promise of freedom rather than the oppressive communist ideology they are being ordered to defend. Both Presidents Machel and Chissano have had to conduct numerous purges and shake-ups of the military to avoid a consolidation of Renamo collaborating elements. A defector from Frelimo, Jose Francisco, who escaped the country and gave testimony to the United States Senate last year, has retold the story of how Renamo came into being. An Andre Matsangaisse, one of the former President Machel's own officers, raised a protest at the sending of his countrymen overseas as slave labour. He was immediately sent to the Sacuze concentration camp, along with his sympathising colleagues, for eventual execution. However, he and his men escaped by overpowering the guards, stealing their weapons and taking to the bush. They regrouped at Gorongosa from where they initiated attacks against other concentration camps, capturing the weapons and liberating the detainees. So the armed resistance was born, called the Resistencia National Mocambicana or Renamo for short. Matsangaisse was killed in battle five years later and Alfonso Dhlakama took over command. In their early years they received some logistical support from the Rhodesian Government as retaliation to Frelimo giving sanction to Mugabe's Zimbabwe African National Liberation Army guerillas. Also South Africa offered them limited assistance in the form of medical supplies, communication equipment and some captured South West Africa People's Organisation weapons. This was done to counter Frelimo's harbouring and supporting the anti-South African African National Congress terrorists. However, this South African assistance ceased with the signing of the Nkomati Accord between South Africa and Mozambique in 1984. Renamo has had to become self-reliant and totally motivated to exist, but this freedom fighting organisation grows in strength every day as the Frelimo atrocities continue unabated. Let me recount some of the evidence of Jose Francisco to the American Senate last year of what the Frelimo gets up to, so that the Australian people can know what sort of a regime it is that our Foreign Minister is giving their money to. Jose Francisco was a member of Frelimo, but became disgusted with it from seeing what he describes as `unbelievable atrocities' which regularly took place under the authority of the Frelimo banner. This all happened after the moderate founder of Frelimo, Dr Eduardo Mondlane, was murdered and the communists infiltrated the organisation with Samora Machel as President. Machel's defence chief, Alberto Chipande, personally executed his own father in the presence of 1,000 Frelimo cadres as an example for establishing `the new order'. This public murder was committed by stabbing his father in the stomach and ripping upwards until his viscera spilled to the ground. Joaquim Chissano, their chief of security, personally approved the execution as a teaching method, as he did all atrocities that Francisco witnessed. Mr Hicks —That is his father? Mr COBB —Yes, his father. Later, Chissano became Foreign Minister, which made him the de facto head of the state secret police, SNASP. This group implemented the system of concentration camps and political torture that Frelimo used. Their terror network has input from the KGB, East German intelligence and the Cubans. Chissano, of course, is now the President of Mozambique, since Machel's death in an air crash in a Russian plane, and Chissano is the person our Minister for Foreign Affairs and Trade (Mr Hayden) met with and had his arm around on his recent visit there while discussing how much Australian taxpayers' money he can give this vile murderer. He gave Mozambique an extra $6m, bringing the total aid for this year up to $9.5m, a 30 per cent increase over what was given in 1987. As well, the Minister has committed more taxpayers' money to a Commonwealth fund to assist Mozambique and a substantial slice of the $100m promised to the front line states. Jose Francisco's description of what happened to another moderate Frelimo leader, Silveiro Nungo, is possibly the most shocking story I have ever heard. A Fremilo leader, Mariano Matsinhe, now Security Minister, and also a member of the International Socialist Party since he was a student in Portugal, ordered soldiers in Francisco's unit to carry out a gang torture-execution session on Silveiro Nungo. Let Francisco's words tell the story: I say my officers take diabolic glee in flogging Nungo repeatedly for 12 hours. He was left overnight tied to a tree. The next day he was beaten again until unconscious. The third day after he regained consciousness, the most gruesome part followed. Nungo was dismembered, joint by joint, starting with his fingers, going up to the shoulders, Using crude machetes to do the hacking, Nungo died by mid-day. I am ashamed to think that our Foreign Minister would not even think to raise such brutal human rights violations with Chissano, but instead lavished him with money. These atrocities are not isolated incidents. Francisco also described how he witnessed mass executions as well. Young Frelimo cadres returning from indoctrination camps in Russia and other Eastern bloc countries were secretly identified by their instructors as `converted communists' or as `unconverted'. The unconverted were met at the airport at Dar es Salaam with orders for `special missions'. They were then taken to a detention centre at Cabo Delgardo and executed by bayonet after first being sexually dismembered. Apparently that was a regular occurrence. The largest single massacre Francisco witnessed involved 120 individuals. That is the sort of thing that is going on in Mozambique. The same Frelimo officials who presided over these barbaric massacres meet foreign aid delegations and Ministers in Maputo these days and spin the line that Mozambique is now moderate and moving away from Marxism and towards the West. Amazingly, some are believing it. The Australian Council for Overseas Aid believes it-it recently put out a brochure saying so. The trendy Left believes it. The Australian Broadcasting Corporation believes it. Even our Foreign Minister believes it. I happen to be one who has yet to be convinced. I spoke in this chamber some time ago of my visit to a refugee camp only last year at Phalaborwa in South Africa. Some 30,000 refugees had fled from Mozambique and passed through this camp. They told me of dreadful things the Frelimo Government had done both to their families and to their country. The trouble the Frelimo Government finds itself in is largely of its own making. However, they continue to blame everything and anyone but themselves. Any aid we give them, regrettably, is acting to prop up this corrupt regime. The Australian taxpayers would not approve of that if they were told these facts. I believe our efforts would be better directed towards putting pressure on the Frelimo regime to uphold the requests of the Renamo popular movement-namely, dismiss all foreign troops from the country and hold an internationally supervised general election. Mr DEPUTY SPEAKER(Hon. J. D. M. Dobie) —Order! The honourable member's time has expired. Mr JENKINS(Scullin)(5.57) —In rising to support Appropriation Bill (No. 3), Appropriation Bill (No. 4) and Appropriation (Parliamentary Departments) Bill (No. 2), and to oppose the amendment moved by the Deputy Leader of the Opposition (Mr Peacock), I make the observation that the Appropriation Bills provide an opportunity for a wide-ranging debate, but they also provide an opportunity to review the Government's economic strategy and to contrast it with the economic proposals of the coalition. These economic proposals of the coalition can be divided into two basic categories: those who want to introduce a consumption tax and those who would like to but feel that it would be politically unpalatable. The driving force of the former is the extra-parliamentary leader of the Liberal Party of Australia, Mr John Elliott. John Elliott is an open admirer of Margaret Thatcher. He is a fervent advocate of privatisation. He is an international pedlar of the tired old myth that Australia is a high-taxing country. Last year he called on the Government to slash $6 billion in government spending as a tough economic medicine. This year's panacea is a cut in the company tax rate, financed by a consumption tax. A couple of points should again be placed on the public record. Australia is not a high-taxing country. Our total tax burden is 30 per cent of gross domestic product (GDP), compared with the Organisation for Economic Cooperation and Development (OECD) average of 37 per cent. Our corporate tax rate is 2.8 per cent of GDP, compared with the OECD average of 3 per cent. Moreover, since the 1960s the contribution of the corporate sector to our overall taxation revenue has fallen sharply. In 1965 the corporate sector contributed 16 per cent of total tax revenue. By 1983 this had fallen to 8 per cent. That is a decline of something like 50 per cent in the course of two decades. What of the performance of Mr John Elliott's company, Elders-IXL? Elders-IXL's after-tax profit for the first half of the financial year to 31 December-that is, the current financial year-was $272m. This was an 83 per cent increase on the previous six months. Given the company tax rate of 49 per cent, Elders paid 11.64 per cent in 1986 and 10.4 per cent in 1987. According to Mr Elliott, however, we require a further redistribution from the poor to the rich. As the Treasurer (Mr Keating) has indicated in this House, for Australia to reduce its corporate tax rate to the level of that in Thatcher's Britain-that is, 35 per cent-a new additional consumption tax of about 5.8 per cent will have to be introduced. In March last year Mr Elliott nominated a 7.5 per cent consumption tax as his preferred option. The reasons he offered at that time for the introduction of such a tax are worthy of further consideration. First, he contended that without a consumption tax we cannot achieve what he considers to be an ideal personal tax rate of 30 per cent, or 20 per cent for low income earners. Remembering that in this same interview Mr Elliott nominated a level of $5 billion or $6 billion worth of expenditure cuts to go part of the way towards achieving the same end, it is hardly surprising that the Opposition suffered an extreme lack of tax credibility at the last election. It is probably worth speculating what order of expenditure cuts would be required to reduce personal tax to those levels. It is also of note to refer to an article in today's Australian Financial Review-to which the Treasurer referred in Question Time-under the heading `BCA pushes for tougher cuts'. That article states: The Business Council of Australia yesterday put pressure on the Government to make tougher cuts in the May mini-Budget, outlining a detailed series of spending reductions worth $3.5 billion across a broad spectrum of sensitive programs. What was the Opposition's reaction to this proposal? The article states: The shadow Treasurer, Mr Peacock, last night supported the thrust of the BCA submission but said it did not go far enough in cutting spending. Let us consider some of the options for cuts as outlined in these proposals: tertiary education fees set at 10 per cent of the full cost of course; the phasing out of war veterans acute hospital facilities; tougher means testing of the pharmaceutical benefits scheme, with a 50c levy on pensioner prescriptions; inclusion of the value of the family home in the aged pension assets test; a 6 per cent reduction in road funding; and more unspecified rapid reductions in Public Service staffing. That is not what one would call a politically appetising recipe for any form of economic salvation. I return to the consumption tax. Mr Elliott's second reason for favouring a consumption tax was that tourists will have to pay that tax. Thirdly, under the General Agreement on Tariffs and Trade (GATT) arrangements whereby indirect taxes are deducted for the purposes of export, a clearly defined consumption tax would increase the competitiveness of Australian products overseas. This point takes no account of the fact that a consumption tax would send inflation through the roof, adding 6 or 7 percentage points overnight, at the very time when the Government's economic policies have begun to bring about a recovery in our competitiveness in terms of the current account deficit. Finally, Mr Elliott says that a consumption tax would force `people who can minimise their personal tax legally, who are usually the wealthier people, to pay a larger share of the tax burden simply because they are the biggest spenders. For that reason, it is very equitable'. That is a remarkable position. A consumption tax is a pernicious tax in that it applies indiscriminately without any recognition of capacity to pay. What that means is that the consumer pays an additional 5 per cent to 7 per cent for all items, including the basic necessities of life, regardless of whether that consumer earns $15,000 or $50,000 per annum or, undoubtedly, a great deal more if the consumer happens to be Mr Elliott. By their very nature indirect taxes impact most severely on the poorest sections of the community. Therefore, it comes down to this: the Federal President of the Liberal Party, an international corporate baron, considers that it is equitable for average Australians to pay an extra 7.5 per cent on all items both to finance a tax cut for him personally and to ensure that his corporation pays less tax. This is all the more perverse when considered in the context of Australia's existing low tax regime. John Elliott's stand has attracted wide support on the extreme fringe of the dark side of politics. In the Melbourne Herald of 6 April, for example, a letter from John J. Hay of the Australian Free Enterprise Foundation offered the wholehearted support of that organisation to `Mr John Elliott's call for a consumption tax' which it-the Free Enterprise Foundation-sees as `an integral part of a new, innovative taxation system. Such a program could include corporate tax of 30 per cent, personal tax of 20 per cent, plus a consumption tax on items classified as essential'. What else did John Hay have to say? In addition to this economic blueprint for a utopia of the super rich, Mr Hay lists other policy objectives of his Foundation, including the elimination of land rights and the closure of the Department of Aboriginal Affairs; a work for the dole scheme; the elimination of the fringe benefits tax; and the elimination of the policy of multiculturalism. It should be remembered that Mr Elliott himself is a vocal critic of the concept of multiculturalism. The Australian people should think long and hard before they allow the Elliott Liberal faction to get its hands on the economy; but neither should the Australian people believe that the Howard Liberal faction opposes a consumption tax. The Leader of the Opposition (Mr Howard) is on record as supporting such a tax in the past. His current position is dictated purely by political opportunism. The recent decision of the Federal Liberal Council highlights that the door for the introduction of such a tax is wide open-but the public simply will not be told about it before an election. It is time the Opposition came clean on a number of points. Honourable members opposite talk incessantly about a flat, or flatter, personal tax regime as well as lower levels of corporate tax and the removal of the fringe benefits tax, the capital gains tax and so on. Without canvassing the merits or otherwise of these objectives, I point out that the Australian people have a right to know how they would be financed. Would it be by horrendous expenditure cuts, as instanced today by the Business Council of Australia? If so, what programs would be cut to fund this proposed windfall for the super rich? Where is the equity in any of these proposals? Will Thatcher's Britain provide the model for the wholesale dismantling of the welfare system, or is it to be financed by a new consumption tax, or perhaps by a combination of both? It should be stressed again that only last year John Elliott was calling for $5 billion to $6 billion worth of expenditure cuts and a 7.5 per cent consumption tax. The Leader of the Opposition may succeed in the short term in stifling debate on these issues in the coalition but he cannot alter the public record. How long will it be before John Elliott proposes a poll tax such as that favoured by his much loved Thatcher Conservative Government, a tax under which property rating is replaced by a simple head count so that it matters little whether people live in a mansion in Higgins-an electorate in which Mr Elliott has some overt interest-or a Housing Commission home in Scullin; they pay a tax according to the size of the family, to finance a tax regime that benefits the rich. Let us dwell a little on Thatcher's Great Britain and the poll tax that will take effect from 1 April 1990. This proposal is based on a crude ideology. The Government's own Green Paper outlines that the proposal was conceived in the context of the `pressing need to reduce the burden which the public sector imposes on the private sector and on taxpayers'. The proposal is that domestic rates will be phased out over a 10-year period `and replaced by a flat rate community charge payable by all adults'. In its Economics Notebook, the Guardian of 28 September 1987, states: It is the most ill-conceived tax this century. It is called a community charge rather than a poll tax because the last poll tax was introduced in the fourteenth century. It triggered a revolt and a mass exodus from the electoral roll resulting in actual destruction of the political `community'. Perhaps it is warranted to note that as a result of the rebellion, both the Treasurer and the Commissioner for levying the tax were beheaded. The effects of the poll tax will be, to quote the Guardian further: . . . to further reward Mrs Thatcher's own political base. There is an element of gerrymander about it since the poor people who will be tempted by reason of financial deprivation to evade the electoral register will be mainly people who do not vote conservative. Mrs Thatcher's Conservative Government wants to drag Britain back to feudalism. Australia had not been discovered by Europeans when Britain struggled through the dark ages of absolutism but it seems that some of our citizens yearn for feudal government. After all it was Mr Elliott who stated in a recent speech in London: I hope Australia gets with Thatcherism in the near future . . . good government needs strong leadership and limited democracy. Mr Elliott undoubtedly sees himself as a benevolent despot. Opposition bickering over economic and taxation policy comes at a time when the economic outlook for Australia is the brightest it has been for some time. Many of the economic fundamentals are showing positive signs. Inflation is expected to fall significantly below 6 per cent and possibly below 5 per cent in the course of the 1988-89 financial year. Seasonally adjusted employment rose by nearly 50,000 last month, a rise which boosted job growth in the first quarter of 1988 to 1.8 per cent. Annual job growth is running at 3.6 per cent, which means 250,000 additional jobs, and this includes a strong growth of 4.8 per cent in female employment. These figures lend confirmation to the downward trend in the unemployment rate from over 8 per cent to 7.4 per cent. This is the lowest figure in six years. The March figures represent the second successive month in which unemployment has fallen below 600,000 and compare favourably with the figure of 647,600 Australians who were out of work in March last year. Housing loan interest rates are now 2 per cent lower than at this time last year, and there is evidence of a further downward trend. The Australian Financial Review noted a few weeks back in an article headed `Rise in approvals signals continuing boom for housing': The housing boom looks set to continue, with building approvals showing a strong upward trend in February . . . the strong figures for the housing sector reflect the unleashing of pent-up demand, fueled by record lending and recent falls in mortgage rates. For the first time in several years in the run up to a major economic statement, the speculation is not over the size of the Government deficit but the size of the surplus. It is important to recall that this economic turnaround under Labor has been paid for largely by unprecedented wage restraint. I refer honourable members to a letter to the Australian Financial Review on Tuesday of last week in which Philip Lewis, senior lecturer in economics at the Curtin University of Technology, quoted a study undertaken by Michael Kirby and himself which estimated that real wages have been 10 per cent below what they would have been without the accord. The study credited the accord with helping to increase employment by about 8 per cent or 600,000 jobs, so it can be seen that the economic turnaround has been paid for largely by workers through the trade union movement under the accord. It is time for those who have sacrificed to reap some of the benefits. Perhaps it is time that the belts were loosened. Wages must keep pace with inflation to ensure that living standards are maintained, even improved, and the objectives of fighting rising poverty and inequality and achieving greater social justice should now take priority in any discussion of a surplus. Mr McARTHUR(Corangamite)(6.15) —On hearing the previous speaker, the honourable member for Scullin (Mr Jenkins), I wonder what is the Government's position on economic and tax matters. The honourable member spent most of his speech criticising the Opposition's positive proposals for the Australian people and gave no support for the Government's position. However, as the Hawke Government moves towards yet another May mini-Budget statement, which will most likely incorporate and consolidate further tax raising measures, it can be seen that this will be done with a backdrop of a national debt in excess of $110 billion and current balance of payments figures indicating an annual deficit of $13.6 billion. As the Leader of the Opposition (Mr Howard) has pointed out on numerous occasions in the past few months, it now takes 64c of every export dollar to pay the interest on this huge overseas debt. When the Hawke Government came to power in 1983, only 23c in each export dollar was required to service our overseas commitments. With this disturbing background of an economic performance of disastrous proportions, indicators published in the Budget Monitor of February 1988, by ACIL Australia, show that the Commonwealth Budget is likely to record a surplus of $1 billion in 1987-88 and a $2.5 billion dollar surplus in 1988-89. These predictions are made on a no policy change basis. However, they confirm the people of Australia's suspicions that the Labor Government is extracting the last cent of every taxable dollar from each individual. Australians are painfully aware of the impact of bracket-creep as their salaries and wages increase. The Budget Monitor indicates that total taxation revenue is expected to grow by 10.1 per cent this year and 9.1 per cent in 1988-89. The projected inflation rate for 1987-88 is 8.3 per cent and the Government is hoping for a figure of 6.5 to 7 per cent in 1988-89. Australians faced with the tax rip-off by the Federal Government created by bracket creep, compare it with accepted inflation rates and are rebelling against the Hawke Labor Government. Not only has their standard of living dropped but they now have less money in their pockets after they have paid their income tax and other hidden charges. Over 51 per cent of the Federal Government's revenue is raised by the downtrodden pay as you earn taxpayers. These beleaguered middle income earners bear the burden of raising ever-increasing revenue requirements. While incentive and effort is being penalised under this tax regime, the insidious attack upon individual taxpayers goes on against a background of demands by business for company taxation rates to fall in line with international counterparts. Investment in Australia is retarded by our excessively high company tax rate of 49c in the dollar. International investors are not encouraged to place their money with Australian companies when they compare the alternative tax rates offering: 39 per cent in the United States; 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; 44 per cent in South Korea; and now 28 per cent in New Zealand. Margaret Thatcher has led the way in the tax debate and, in her recent Budget she not only held company tax rates at 35 per cent but she reduced personal income tax rates to 40 per cent for the higher income group and 25 per cent for the middle income earners. The Thatcher Government has been utterly determined to reduce the level of direct tax for individuals. Having achieved this objective, a revolutionary change in attitude is apparent. English men and women are keener to work hard and achieve a better standard of living for themselves and their families. Along with taxation incentives, the Thatcher Government has created a nation of capitalists by its successful program of enabling workers to become shareholders in their own enterprises as well as making it possible for them to purchase their own houses. By innovative tax reform and creating incentive, the Thatcher Government has turned the English nation around from a debt-ridden, poverty-stricken country to a nation which not only is increasing its standard of living but also is now a banker to the world. At a time when other Western nations are lowering their tax rates and simplifying their tax systems, Australia, under the Hawke Labor Government, is adding taxes to the statute book. In the Government's haste to reform the Australian tax system and increase government revenue, it has forced through legislation which is incomprehensible, incomplete, and proving to be a goldmine for tax lawyers and accountants. I need hardly remind the House of the utter chaos the fringe benefits tax legislation created for employers and small businessmen. It was a sad joke that the Government had to reissue instructions time and again, and waste taxpayers' money even further, before it got it anywhere near right, if it ever will, for the final interpretation is not yet clear. In the desire of the Treasurer (Mr Keating) to implement the quarterly instalment system for provisional tax, the administrative and technical requirements of the Australian Taxation Office are giving tax agents enduring headaches. The provisional tax quarterly instalment payment system provides that payments are made in September, December and March, with a final adjustment being made in June. This results in adjusted figures being paid in March and a further adjusted figure being paid in June. This creates difficulties in trying to explain to taxpayers how much tax they have paid and what their final assessment will be in June. Accountants around Australia are suggesting that there would be mutual advantage to the Taxation Office and taxpayers if the final provisional tax payments were made in March each year. This would set the scene for finalising taxpayers' liabilities in June each year. I now wish to draw the attention of the House to the capital gains tax. This tax has been incorporated into the Government's tax policy against the better judgment of the Prime Minister (Mr Hawke), if we can believe his earlier statements, the Treasurer, and Taxation Office officials. It was a pay-off to the left wing of the Australian Labor Party. The Prime Minister campaigned strongly on the issue that there would be no capital gains tax and yet when the pressure of the left wing in the parliamentary Party and the Party machine were brought to bear, he crumbled. The Prime Minister went to unusual lengths to put his position on the record. And although he seems to be suffering from political amnesia these days over exactly what he did say during the July election campaign, let me remind honourable members of his exact words. In his election speech on 16 February, 1983, he said: . . . let me make one point so that even our opponents can understand it; and let me make it beyond all their powers of misrepresentation and distortion. There will be no new capital gains tax.'' We now have in place a complicated, unworkable piece of legislation which will raise very little revenue. Capital gains tax fails on every count. Any new form of tax should be judged against the five canons of taxation: simplicity, administration, equity, efficiency and revenue. In fulfilling the first canon-simplicity-legislators throughout the world have had great difficulty in framing laws for capital gains tax that both the Taxation Office and taxpayer can understand. Capital gains tax legislation in Australia is no exception. Tax accountants, tax lawyers, and even the Australian Tax Office itself, are unable to interpret some clauses in the capital gains tax act. Again, as in the second canon, the administration of the capital gains tax Act will be a nightmare. The cut-off point of 19 September 1985 has helped in the problems of valuing assets as a benchmark to establish future capital gains. On examination, however, the establishment of the value of assets will prove to be a matter of great argument and litigation between the taxpayer and the Tax Office. For instance, the exact value of share issues, options, and bonus share issues will be a matter of dispute when the Commissioner assesses capital gains tax at a time distant from the issue of such shares. The taxpayer is being asked to keep minute records which she or he could have difficulty in substantiating some five or 10 years on. Hopefully this will not arise. And why not? Because a Howard-led government will abolish capital gains tax. We come to the third canon-equity. Capital gains tax will fall upon those who are least prepared to pay it. The Prime Minister's own admission that there are `unintended consequences' demonstrates that the Government is aware that the legislation contains inequities. Mr Matt Walsh, a partner in the national law firm, Mallesons Stephen Jaques, confirmed the difficulties facing taxpayers in interpreting the capital gains legislation. In addressing a conference organised by the Taxation Institute of Australia, Mr Walsh said: . . . the capital gains tax has brought confusion and headaches to the business world because of lack of clarity and ambiguities in the drafting of the legislation. He went on to say: No other tax in modern times has had such a dramatic effect on business and business organisations. Mr Walsh focused on capital gains tax mainly in the field of acquisitions and mergers. He drew the contrast between Mr Hawke's undertaking to provide a tax regime that everyone would understand and the complicated legislation that no-one seems able to comprehend, tax advisers included. World experience indicates considerable difficulties in collecting revenue from capital gains tax efficiently. The law is complex and with various offsets and provisions of capital gains tax, some governments have questioned whether the revenue gain has been worth the effort. In Australia, there will need to be a new battalion of public servants to administer and interpret capital gains tax liabilities. The fifth and final canon of taxation states that revenue should be substantial, given that the other criteria have been followed. The Hawke-Keating Government cannot even justify the capital gains tax on a revenue basis. At the 1985 Tax Summit, Treasurer Keating forecast a figure of $25m as the likely yield from capital gains tax raised in the first year, rising to a modest $100m in the fourth or fifth years. However, the 1987-88 Budget Papers estimate it will raise revenue of between $50m and $100m. Budget Paper No. 1 admits: There is, as yet, considerable uncertainty as to the extent of realised capital gains on which capital gains tax is to be paid in 1987-88. The Budget Papers estimate that these gains would be `based principally on substantial past increases in sharemarket prices'. These guesstimate figures are incorporated in fine print in an addendum to the Budget Papers which further adds to the belief that Treasury has no real idea of the revenue from capital gains tax, either in the short term sharemarket boom conditions or in the longer term. Not only does this Government's capital gains tax not adhere to the five canons of good taxation practice, but also it is, in itself, a double taxation measure. Australian taxpayers pay high rates of income tax, and having accumulated some capital, are being hit yet again if they realise one form of capital investment in order to reinvest or rearrange their financial affairs or sell an asset. Australians pay one of the highest marginal rates of income tax in the world. As if that is not bad enough, this same high rate of 49c in the dollar is applied to capital gains. I wish to refer to two other major aspects of this iniquitous tax which make it a problem for Australians. Currently the tax is indexed for inflation. At least this measure ensures that real gains are being taxed, rather than an extra tax being levied on inflation. While this seems obvious, other nations have used the tax without the indexation component. In England there has been a capital gains tax since 1965. In the 1976 Budget the Labour Chancellor, Mr Healey, declined to index the tax. He argued: . . . insulation against inflation could not logically be confined to capital gains taxpayers; if they enjoyed it, in principle inflation-proofing ought to extend to holders of building society and savings bank deposits. But we cannot afford to go down this road. In 1982, Sir Geoffrey Howe, Prime Minister Thatcher's then Chancellor of the Exchequer, introduced indexation of capital gains tax. This proves the point that indexation can be imposed or removed at the whim of the Treasurer of the day. We have no guarantee whatsoever that either the current Treasurer or any future Labor government would not remove this vital buffer against inflation. Principal dwellings are exempt from capital gains. Because of the political pressures in the electorate, even the left wing of the Labor Party was not prepared to place a tax on the family home. There is absolutely no logic in this and all this exemption achieves is an extraordinary boom in real estate values. The real irony is that supporters of the Labor Party are now being disadvantaged. The Australian dream of owning a home is quickly becoming an impossibility. It is an outrageous distortion of the market that Susan Renouf's house sold for a reported $19.2m. Obviously Sir Frank will not have to pay capital gains tax on a house which he claimed as his principal residence, on which he made about 150 per cent profit, and which he owned for less than three years. It would appear from Press reports that the Renoufs did live there from time to time. Although behind Sydney, Melbourne residential real estate values have soared, with a recent sale of a residential establishment for $7.5m topping the market. Those who have had their fingers burnt in the share market are investing in residential property which gives them an obviously favourable tax position. Sitting suspended from 6.29 to 8 p.m. Mr McARTHUR —The 20 per cent exemption on the sale of business goodwill on a business worth less than $1m is at least an acknowledgment that a capital gains tax is a disincentive to enterprise and hard work. Goodwill is built up by years of hard work. As any entrepreneur will know, very often one starts with nothing and builds up an enterprise worth thousands of dollars. The impact of a capital gains tax on goodwill is disastrous because of the no value base on which the tax is calculated. In the latest issue of the Australian Director, Mr Michael Inglis, a Sydney barrister who specialises in tax advising and who has written a book, Australian Capital Gains Tax, is critical of the use of taxation rulings to implement this tax and, in particular, the ruling on goodwill. Tax accountants tend to treat the taxation rulings as gospel, but this is not necessarily so. Mr Inglis points out in his article that tax ruling No. 1 clearly states that `in using taxation rulings it should be recognised that they cannot supplant the terms of the law'. He criticises the Taxation Office's interpretation of when the goodwill was acquired for the purposes of capital gains tax. Mr Inglis says: Broadly stated, a capital gain arises when the gross proceeds of a sale exceed the cost base, as appropriate, of the asset to the taxpayer. He went on to say: In the goodwill context, it is proving virtually impossible to establish any cost, or indexed cost base, where the goodwill was not purchased from a third party. That is to say, where the taxpayers: . . . acquired the relevant goodwill, by founding the relevant business, there is virtually nothing that can be used to establish a cost base or indexed cost base for the goodwill. In particular, the `blood, sweat and tears' associated with the establishment and nurturing of a profitable enterprise, are irrelevant for the purposes of Capital Gains Tax computations. Australians who purchase farms, small businesses, shares and property after 19 September 1985 will be facing the prospect of a de facto death duty through capital gains legislation. It would appear from learned legal interpretation that the cost base of these acquisitions is deemed to be the purchase cost for capital gains tax calculations, even though the assets are passed to executors, who in turn, transfer the assets to beneficiaries. Probate duty was removed by the Fraser Government in 1980. Consequently, Australians faced death, confident that all they had worked for all their lives would pass to their families or designated beneficiaries. They could die happy in the knowledge that the Government would not force a dispersal of their enterprises, farms or whatever, through iniquitous death duties. Now they are being forced to reassess their position very carefully, otherwise Mr Hawke's `unintended consequences' could see their life's work dissolve. Honourable members may be interested to know that taxation rulings in the life of the Hawke Government number 2,349 in volume No. 1 alone. Volume 2 is already up to 2,460, and there have been numerous miscellaneous rulings as well. The tax Act has increased from 1,100 pages to approximately 1,700 pages. The Treasurer's bent for inflation has spread to the tax Act, quite literally. Tax professionals are hard pressed to keep up with the shifting sands of the Hawke-Keating tax policy. There is no sound, logical argument to support a capital gains tax which is a positive deterrent to overseas investors at a time when Australia should be encouraging as much investment as possible. The coalition is totally against the capital gains tax and will throw it out lock, stock and barrel. Unlike the Hawke Labor Government which has allowed, even encouraged, bracket creep, and boasts of increasing wages while at the same time grabbing a bigger tax take, the coalition is undertaking a total review of direct and indirect taxation to reduce the burden on individual taxpayers. Mr O'NEIL(Grey)(8.05) —At the outset I take issue with the honourable member for Corangamite (Mr McArthur) who spoke in very glowing terms about what Margaret Thatcher has done in the United Kingdom. If there was ever a person in the Western world who had tried to divide people into the haves and the have-nots, such a person is certainly Margaret Thatcher. Last year I was in the United Kingdom and saw the depressed areas in the northern parts of England where the have-nots are certainly disadvantaged. In comparison, Margaret Thatcher really looks after the people in the south, the haves who voted her into office. So, as far as we on this side of the House are concerned, the honourable member for Corangamite certainly picked the wrong person to speak about in glowing terms. If ever a person has tried to depress the working class people of England, that person is certainly Margaret Thatcher. Quite frankly, we on this side of the House do not want to see somebody like Margaret Thatcher in this country. Tonight I want to speak about railways. As most people would be well aware, my electorate of Grey has a close relationship with railways. For the last 100 years, railways have provided the backbone for development not only in my electorate but in Australia. They still provide the backbone for the economy of my electorate. I know that railways in Australia have been allowed to fall into bad practices. From the early 1950s they began to decline through competition from road transport and air travel and the failure of railway managements universally to adapt to the tremendous economic changes that have taken place. Clocks simply stopped. Steam age management remained, as did steam age technology. Today, the State railway systems, in New South Wales and Victoria in particular, are draining the taxpayers' pockets at a ridiculous rate and governments are denied the opportunity to invest money in productive railway enterprises. Things are changing slowly in some areas but, fortunately, quickly in others. Australian National (AN) is a magnificent exception, though, I understand, Westrail has made great improvements, too. I must say that fair dinkum improvements have been made. In this competitive world, it is very important that public enterprises like railways become competitive. The people involved in Australian National have really seized the opportunity to make the operation a glowing example to the other railway systems of the States which have used freight operations to cross-subsidise all of their inefficiencies. With much of the Australian National network in my electorate and the location of the workshops in Port Augusta, I am only too aware of the pain that is involved in dragging a railway system into the twentieth century. Under conservative governments, Commonwealth Railways, as it was known, was allowed to languish. No attempt was made to invest in new technology or to address seriously the issues of inefficiency and productivity. That was too hard. This Government, though, has done it and the results speak for themselves. Let us look at the record since 1983. In little more than five years, Australian National has improved its financial position by 60 per cent. In real terms, its current revenue supplement is $54.9m against $106m in 1982-83. It is expected to break even on its commercial services in the next financial year and is aiming at a cost recovery target of 60 per cent on passenger services. That has involved many difficult decisions. It has required much adjustment involving management, employees and unions. It has also caused some personal disruption. As a local member I know that only too well. However, if the hard decisions had not been made, Australian National would not have become the organisation it is today. All railway people deserve credit for the way in which they have supported Australian National. If there is one great loyalty railway people always have had, it is to their railway. It is too easy to take things for granted. No matter how realistic one tries to be, self-interest always surfaces first. For those Australian National employees being transferred to different jobs, with different skill requirements in different locations it is distressing, and understandably so. I say as a reminder to AN management that personnel management skills, sensitivity and understanding are too often lacking. We are dealing with hardworking committed railway people and they deserve better treatment. They need to be kept informed of change and helped to understand it. If that does not occur, they will resent it, and an unhappy worker is an unproductive one. I will be taking up this very important matter with the Minister for Transport and Communications Support (Mr Peter Morris). I know from his record that he will see that people are treated fairly and with dignity. More and more every day it is brought to my attention that management says to workers, `Next week you will be transferred to Adelaide', or, `You will become redundant', and so on, without any consultation or discussion of what will happen to them and their families in the future. That is very distressing. In this day and age it is appalling that Australian National management does not have the nous to have discussions with AN employees before some of these tough decisions are taken. I call on the Minister to intervene in situations where communication has broken down between management and employees and management is not meeting its side of the agreement to seek rapport with workers. Let me return to this Government's record on railways, particularly Australian National. This year alone, more of the $18.7m provided over four years for non-interest bearing loans will be made available so that the Islington workshops can be modernised for more efficient operations and a safer working environment. That is a proper investment, bringing newer technology and higher productivity to the railway. It will bring the railway, at last, out of the steam age-replacing old workshops equipped to maintain steam age rolling stock. Another $1m is being provided over the next two years to fund the upgrading of the Adelaide-Alice Springs piggyback service for trucks-a real winner since it started. The Government ought to be applauded for that constructive step, which has opened up markets to the north. Looking back over the last five years, there are good examples of the investment behind AN's improved performance. For example, since 1983 we have provided $24.6m to Tasrail for rehabilitation of the track in that State-an investment that has transformed that system into one which I understand is now capable of rescue, instead of the graveyard to which the Fraser Government directed it. In 1984-85 this Government invested $2.3m in the piggyback facilities in Adelaide for the Adelaide-Alice Springs route. I have already referred to that more recent addition. Also in 1984-85, $16m was invested to assist an early retirement scheme which had huge flow-on effects within AN. In total 850 employees took the chance and thereby helped AN improve its efficiency. Australian National has supplemented this record with its own earnings, which would not have been possible without the substantial investment previously made by the Government. More recently, in late 1987, AN instituted a further early retirement scheme of its own which realised another 335 retirements. In a similar vein, Australian National has also invested heavily in new technology. Last week it was announced that $19m would be made available for a new fibre optics system and $34m for a new DL locomotive construction program. The first locomotive, appropriately named the Peter Morris, was handed over in Adelaide last Wednesday by Clyde Industries, which is in the electorate of my colleague the honourable member for Calare (Mr Simmons). This is a fantastic turnabout for AN, and I must say that the sight of the bright green and gold colours is very heartening. Of course, there are problems in all of this and I have already referred to them. However, I am confident that, with the continuation of the sound management of this Government, AN will continue to improve. Of course, it takes more than an investment of cash; it also needs the investment of goodwill and good management. Hopefully, one day we will see Australian National as the core of a coast to coast freight network. We said before the last election that in our next term of government we would begin work on the plan to negotiate running rights for interstate tracks. Already negotiations are well advanced with Westrail. For places such as Port Augusta and for this nation's economic infrastructure, this is a vital issue. Our railways were great once; they can be again. They have a very real role to play in an efficient transport mode, doing what they do best-carrying heavy freight over long distances. But they must be given a chance. They need more good management, which they will not get from the nincompoops opposite. As this is a broad-ranging debate, I will turn to a couple of other issues. I am pleased to see in the appropriations for 1987-88 an allocation of $5.3m for marriage guidance counselling. This represents an increase of 9 per cent. Whilst this is a significant increase in a tight budgetary situation and the Government is to be applauded for giving marriage guidance counselling a priority, much more money is required to finance an adequate counselling service. Undoubtedly, there is a strong recognition by the Government that marriage guidance counselling is of great service, not only for young couples contemplating marriage but also for a large number of Australians trying to retain existing marriages. Marriage guidance counselling is basically carried out by a group of dedicated people on a voluntary basis who realise the importance of retaining the family unit and the necessity of marriages being retained on a solid, loving basis. The costs incurred are of an administrative nature, involving telephone charges, office rental and general clerical costs. I know that, in my electorate of Grey, various church leaders take their marriage guidance counselling very seriously and do a tremendous job. I am very pleased that this Government has seen fit to increase funding to a variety of counselling services. I trust that in the future much more money will be made available for the necessary and important service of marriage guidance counselling. I conclude by referring to the first home owners scheme, a subject on which the honourable member for Corangamite gave us a bucketing when he spoke last. In my electorate, the first home owners scheme has helped over 1,300 families to purchase their own homes. The latest figures show that 1,387 applications for a first home owners grant have been successful in Grey, representing $5.06m in Commonwealth grants since October 1983. Of the total applications received in Grey, 89 per cent have been approved. That is an exceptionally high figure. Since its inception in October 1983, over 24,700 South Australians have received assistance, representing some $107.8m in approved Commonwealth grants. The first home owners scheme assists low to middle income earners to purchase their first home by providing a grant of up to $6,000 over five years. Last year the Federal Government raised the income qualifying limit to $34,000 per annum go give middle income earners a greater chance to qualify for the grant. The first home owners scheme has proved to be an outstanding success in assisting Australian families to purchase their own home. Many of the successful applicants in South Australia have been able to escape the rental trap and move into their own home. The scheme has turned the dream of home ownership into a reality for many Australians. The scheme also plays an important role in stimulating activity and employment in the building industry. I certainly hope that that answers some of the negative comments that are coming from the other side regarding our first home owners scheme. Mr TUCKEY(O'Connor)(8.21) —Before commencing my remarks on Appropriation Bill (No. 3) 1987-88, Appropriation Bill (No. 4) 1987-88 and Appropriation (Parliamentary Departments) Bill (No. 2) 1987-88, which I want to confine primarily to the health vote, I would like to respond to the honourable member for Grey (Mr O'Neil) by giving him some examples of the problems that maybe the Westrail system has not yet resolved. I own a farming property about 100 miles from a port in Western Australia. With 50 gallons of fuel and a relatively old truck, I can shift 40 tonnes of wheat legally in each trip. To pay Westrail to do the same job would cost me $500. We must wonder why it is now managing to balance its books. The principal contributors to that are, of course, the wheatgrowers and some miners in Western Australia. I made a submission to the Royal Commission into Grain Storage, Handling and Transport on behalf of my constituents. I pointed out that in Western Australia 1,200 tonnes of grain is shifted for every kilometre of railway line laid, yet in the Pilbara 80,000 tonnes of iron ore is shifted per kilometre of track laid. As much as we might like to defend our railways, it is time we asked ourselves, irrespective of the efficiencies achieved, whether that very low freight level on many of the lines within Australia can be tolerated in terms of capital investment, when in fact we generally build a bitumen road alongside them. Bitumen roads are constructed out of a very small proportion of the total taxes paid by road users. On a number of occasions I have brought this House's attention to the fact that owner-driver truckies pay about 30 per cent of their revenues in one tax or another. It is interesting to note that in the second reading speech on Appropriation Bill (No. 3) the Minister for Employment and Education Services (Mr Duncan) states that these additional appropriations are required to meet commitments that have been approved by the Government since the Budget as well as requirements of an ongoing nature. In other words, these are appropriations for additional expenditure by Government to that which was generally brought to the notice of the Parliament in the Budget. With my responsibility, I wish to talk particularly about health. There are some interesting figures. The health budget is mentioned in both Appropriation Bill (No. 3) and Appropriation Bill (No. 4). In Appropriation Bill (No. 4) we find that plant and equipment is mentioned and there is an additional allocation of $5,100,000 for computer equipment. That is something that is now becoming of grave concern to many people in the community. Naturally, an organisation such as Medicare, which is where most of that computer equipment would be going, needs that. It has now become the means by which the Government stores information and many people are deeply concerned at the allegations of certain people as to how that is being used. I might come back to that point later. Item 08 refers to the Health Insurance Act 1973 and an additional $11,278,000 in Medicare grants. This is quite surprising because the responsible Minister and I have been having a sort of contest through the Press Gallery with Press releases-none of which is being published in more recent times-throwing allegations at each other as to who has got it right in terms of the additional money being spent by the Government in the arena of health. The facts are that this year the Medicare levy, according to the Budget Papers, will raise $2,065m, whereas according to the previous Budget Paper, the Government proposes to spend $5,212m on Medicare related expenditures. That is not a levy of 1.25 per cent; the expenditure is equivalent to a levy of 3.15 per cent. If we look at the statement of cumulative outlays until the end of February put out by the Minister for Finance (Senator Walsh), we find that things are getting worse. The Minister for Finance tells us that the cumulative outlays to February 1987 were $5,012m in the health arena whereas for this year, to February 1988, they are $5,894m, an increase of over $800m. This is an increase in percentage terms of 17.6 per cent when in fact, as these documents tell us, the Budget allowed only an increase of 9.5 per cent. When that has worked its way through the system by the end of the year, it could be argued-especially as the same document points out that growth in medical services and benefits, the principal activity of Medicare, has grown from $2,139.7m to $2,624.3m-that that is a growth of 22.6 per cent instead of the 8.8 per cent predicted in the Budget. No wonder the honourable member for Canning (Mr Gear) was sent to try to make a case against doctors when that sort of expenditure is confronting the community in terms of taxation. Mr Gear —I raise a point of order, Madam Speaker. The honourable member for O'Connor has just made an allegation against me which is totally untrue and I ask him to withdraw it. Mr TUCKEY —It was not unparliamentary, and that is the point-- Mr Gear —It was untrue. Madam SPEAKER —The honourable member for Canning has made his point. I think he might be a little touchy. Mr TUCKEY —In regard to this particular issue, we are looking at costs and outlays. The Minister put out one Press release telling us that I had overlooked-and that I was so foolish as not to be able to read it in this document provided to us as a Press release from the Minister for Finance-that somewhere in there there is an additional payment for the month of March. I think he said that it was on page 3. Let me inform the Parliament that I have checked the document as closely as I can and I cannot find the additional payment. I ask why the Minister for Finance-considering the accuracy of his particular Department-would bother to give me a document that says `cumulative outlays to February 1988' if in one case an outlay for March is included. There is nothing within these documents that indicates that. The Minister might then answer why we would be paying to that particular organisation a month in advance other than that it might be having some financial difficulties. The more important thing about that area of expenditure is that we are now questioning what the public is getting for its money. For a long time, irrespective of the type of health program and health services program that is provided in the country, Australians go on spending about 7.6 per cent of gross domestic product on health. A socialist government comes along and decides that only the Government can provide it properly and cheaply and it makes those sorts of claims. Then conservative governments come along and try to return the spending power to the people. But the whole thing is that the cost is roughly the same. We really have to decide what is the level of service. It is an interesting thing to note that all the major newspapers and magazines in recent times are wanting to write about health, and there is a good reason for that. They, like political parties in this day and age, do polling, and their polls are telling them that people are becoming more and more concerned about health delivery in the community and that generally they are grossly dissatisfied with the service they are receiving from Medicare. All sorts of people get the blame for the fact that in Victoria-by admission of the Premier, a man who is sufficiently honest to admit it-we have nearly 29,000 people on waiting lists. That is probably a conservative figure, as was discovered with the new computer program in South Australia recently where it was thought that 6,000 people were on waiting lists, and when the matter was properly recorded it was found that an additional 1,000 people were on waiting lists. These people are not waiting so that they can have a facelift or some moderate form of medical treatment in a hospital. Many of them are waiting to have treated quite severe illnesses, pain, suffering and blindness. A lady wrote to the Minister for Community Services and Health (Dr Blewett) the other day and chose to send me a copy of the letter. She is under 60 years of age, has rapidly advancing cateracts of the eye and, to use her words, `has been told to grope around in the dark for another two years' until late 1989 before the Medicare system, which, as she said, she trusted the Government to deliver, can assist her. I could go on. As a result of my shadow portfolio responsibility, the other day I attended a conference in Sydney. The keynote speaker was Dame Dorothy Fraser, a woman highly regarded in health administration circles in New Zealand and a person consequently selected by the Labour Government there to be one of the three persons, I think, on the Gibbs inquiry looking into that hospital system-and they have produced the Gibbs report. I read from page 5 of her prepared address, which was made available to me: The public would identify access as the greatest failing of the present system- she is talking about the New Zealand system- Unless you are an accident victim, covered by Accident Compensation or develop an acute condition such as cancer, you join the 50,000 people on waiting lists who need hospitalisation. Waiting lists vary between regions and according to the operation. On average last year the waiting time for hip replacements, kidney stones, cataracts, heart by-pass operations, and osteoarthritis, was at least two years. Has anyone in this place heard those sorts of words recently here in Australia? That sounds exactly like what is happening here. Almost as many people are waiting for outpatient appointments. She went on to say: The New Zealand public hospital system uses waiting lists to ration its services and encounters great difficulty in determining patients' priorities. It tends to respond to pressure from patients, family doctors, politicians or the media rather than develop criteria for priority. Uncomplaining, less articulate and poorer members of society tend to gravitate to the end of queues. That is the Australian health system today in a nutshell. It has been said about New Zealand. It is a perfect example of what is happening here. Let me repeat the honesty of that lady. It was not for New Zealand to try to blame the doctors, the greed of doctors, the lack of nurses-and let us agree that it probably has all the same problems as we have; New Zealand said that its public hospital system uses waiting lists to ration its services. That is what is happening here in Australia because the Government made a promise it could not keep, to give everybody free, universal health cover-and it is not working. Strangely enough, the people whom this Government claims as its constituency are the ones that Dame Dorothy Fraser refers to-uncomplaining, less articulate, the poorer members of society. They tend to gravitate to the end of the queues. This Government has done to them exactly what it promised to lift them out of. When they were the so-called two million uninsured they at least could get into hospital. The reality is that they can do so no longer. We have two classes of Australians established under the Medicare system. We have those who can afford to pay their levy and to take out top private cover. They have immediate access to some 9,000 empty private hospital beds and they are being welcomed by that sector, which is desperate for their business. All the rest of the people, even those on basic private cover, are obliged to get on to hospital waiting lists. If they happen to be some of those people who do not know the system well enough, they are in trouble. The Medicare card is an insult to the national colours because it is not delivered for Australians and, what is more, it is labelling people as poor and undeserving, telling them to wait. I said the other day that it should be coloured red. Red is the sign for stop and wait. And the most disconcerting thing that strikes me at the moment is the frequent examples coming forward of people borrowing money, either elderly people on their own behalf, or their children, with their own family problems, to ensure that their elderly parents get certain operations. If honourable members do not think it is true they should ask the Commonwealth car drivers, who will give an example of one of their members who has just been obliged to do that. When the Minister said the other day, `I have one of these Medicare cards and it does not label me poor', he was absolutely right. He happens to be of the new socialist elite. He is not one of those uncomplaining, less articulate and poorer members of society. Just as occurs in communist countries, he is one of those people, irrespective of his own efforts, who will get wonderful service from Medicare, just as other members of the Cabinet have received amazing service-wives have been attended to by doctors of their choice and have had private rooms for serious operations. I do not say this was organised by the Minister: it just happens. And, of course, it shunts a few more poorer people down the queue. Frequently, when I read these letters-and they are usually copies of those addressed to Minister Blewett, and they come to me day after day-my first impression is: I must do something for this person. I must go out and try to help him. Then I constrain myself because I know that if I push that person up the queue, as I may be able to, I push some other person back down. If that is what those opposite want from the health system they should keep this up. But it is not what I want for the health system and as the next Minister I will not tolerate the present situation. It is not all costs; it is the fact that people are getting very bad service for their money. It is time that people took note of that. There is another aspect. It was mentioned in these documents today that we are buying some more computers. I talked about the problems of people's privacy. That has resurfaced today, with the opinion of Mr Temby that the actions of the Minister were not a breach of section 130. It is time that people cast their minds back to 1973 when the current Minister for Foreign Affairs and Trade (Mr Hayden) brought to this Parliament the original health insurance legislation. He told this Parliament: The Government will insist that complete confidentiality regarding individual patients and doctors is maintained by the Commission. The information required for the processing of claims will be less than is now required by private health insurance funds. A special committee has been established by the Government to recommend steps necessary to guarantee the privacy of individuals. What is more, I have that committee's report and the terms of reference. At one stage the report points out: The Terms of Reference were amended by the deletion of the underlined words `medical and hospital' to put beyond doubt that the Committee's work might extend to cover the possible invasion of the privacy of the medical practitioner. That was the intent of section 130. When we read the recommendations we find them translated into law. Now the Director of Public Prosecutions (DPP) has told us that apparently that legislation is badly flawed. Legislation we have relied on since 1973 to protect the privacy of all those people is flawed. He tells us that the Minister is not guilty because he is not an officer as defined in the legislation and nor are members of his staff. The implication of his opinion is that as long as one can get an officer of the Department to provide, in the course of his normal duties, confidential information to the Minister's office, and not know where it is going, that is legal and because these other people, in the terms of the Director of Public Prosecutions, are not officers, they are not bound by that law and they can pass that information on to anyone else. I bet that was not the intention of the legislators in 1973 but that is the statement made by the Director of Public Prosecutions. That is the basis on which he says: In slightly expanded form, for the reasons that follow, my conclusions are that: (a) Section 130 (1) of the Health Insurance Act 1973 relates only to officers as defined in the Act. He goes on to say that the Minister and his staff are not officers and therefore cannot be blamed for handing stuff out to the newspapers. I ask the House: if that is the case, are we to be confronted again with an example such as the one we protested about today in relation to the Department of Foreign Affairs and Trade where anybody who chooses to criticise this Government can have information released through this loophole in the law? The DPP does not bother to say to us that he thinks that this loophole should be closed. He seems more inclined to devote a whole paragraph to the different prices that doctors charge. I still cannot see what that had to do with his opinion. Let me say to honourable members beyond any doubt that if we are going to have a situation in which journalists and others can be threatened with the release of their private medical information because this Government, with the assistance of the Director of Public Prosecutions, has found a loophole, that is a scandalous situation for Australia and one that cannot be tolerated. It is another excellent reason why we do not need Medicare. Mr KENT(Hotham)(8.41) —We have just heard the honourable member for O'Connor (Mr Tuckey) claim that he was going to talk tonight about his responsibility in his shadow portfolio of health. However, for 20 minutes he did nothing but knock Medicare. He did not tell us even briefly what his health policy is. Are we going to go back to the time when two million Australians were not covered by health insurance? Is that his policy? Is he going to introduce compulsory health insurance? Is he going to drive Australian families into the clutches of private insurers and rip them off for thousands of dollars every year? Is that his policy? We have seen his act. It will be a long time before he will have the opportunity to carry out such a policy. However, tonight I would like to speak to the Appropriation (Parliamentary Departments) Bill (No. 2) 1987-88. I would like to ask whether our parliamentary system deserves the expenditure allocated to it. It is well known that, while the parliamentary system is still respected by the public, we, the members of parliament-the essential and integral part of such a system-are not regarded very highly, to say the least. It is as though the Australian public at large could sense that we are not part of the important decision making process in our society. I applaud the insight of the intuition of the ordinary Australians who somehow discern that our importance as member of parliament is very peripheral to the decision making in our system of so-called two-party democracy or the Westminster system. When I was first elected to this House I had the same opinion as any average Australian about the importance or otherwise of the Parliament. I respected some individual members and senators, while having a less than high opinion of politicians as a whole. In general, I was slightly sceptical about the decision making power of the Parliament. However, the air of self-importance assumed by many of my colleagues quickly confused me into thinking that my initial belief and scepticism may have been wrong. For a while, as I was sucked into the daily parliamentary routine, I had no time to reflect on how the system operated. The daily routine of any parliamentarian consists of so much work that it keeps one not only out of mischief but also away from politics. The policy formulation of my Party which was so important to me as an ordinary party member became somehow more remote once I became a parliamentarian. In the routine policy committee meetings which more often than not avoid even a mention of policies, let alone recommend or insist on their implementation, policy formulation is lost. As time went on I became more and more aware that decision making is not only not vested in the Parliament, but also is not vested in the Cabinet. It is vested only in the Establishment. The established order itself is through the bureaucracy; its tool, the media-through which it creates public opinion-guides the Government to arrive at the desired decisions. If a government does not toe the line, we only have to look at what happened in 1975 to see what results. I am trying in a few sentences to express my opinion about the political system. I know how inadequate my eloquence is to try to explain in a simple way a complex and complicated system of checks and balances needed to preserve the status quo. My thoughts on the subject have been so much better expressed by a British playwright and literary genius, George Bernard Shaw, through Colonel Undershaft in Major Barbara, who said: The Government of your country! I am the government of your country. Do you suppose that you and half a dozen amateurs like you, sitting in a row in that foolish gabble shop, can govern us? No, my friend: you will do what pays us. You will make war when it suits us, and keep peace when it doesn't. You will find out that trade requires certain measures. When we have decided on those measures. When I want anything to keep my dividends up, you will discover that my want is a national need. When other people want something to keep my dividends down, you will call out the police and military. And in return, you shall have the support and applause of my newspapers, and the delight of imagining that you are a great statesman. Government of your country! Be off with you . . . and play with your caucuses and leading articles and historic parties and great leaders and burning questions and the rest of your toys. I am going back to my counting-house to pay the piper and call the tune. While I pride myself that my perception is as good as Bernard Shaw's, I admit that I lack the talent to express myself so clearly, simply and beautifully. Having professed the views that I have, one could rightly ask me what I am doing in the Parliament, having so little faith in the institution. My answer to that question is that while I am aware and conscious of the imperfection of the parliamentary democracy, nonetheless I consider it still the best political system put into practice anywhere in the world up to this stage of human history. With all its imperfections, the Westminster system allows public scrutiny and public debate of Executive decisions, wherever they are made. That system allows me, a back bench member, to criticise publicly the decisions of the Executive, and criticise I did. Honourable members will know that, at my own peril, I stood here and criticised decisions of my own Government whenever I considered that they were at odds with the majority thinking of the ordinary members of the Australian Labor Party, or at a least substantial part of it-be it on the issue of uranium exports, the introduction of identity cards or privatisation. As one who has spoken up when I have felt that criticism is justified, let me now pay tribute where tribute is due. I do that especially in view of the latest vogue to accuse the Hawke Labor Government of abandoning its base and not caring about the ordinary working people. Let me say at the outset that such an accusation cannot be further from the truth. However, before I examine the substance of the allegation let us look at who is promoting it. It is taken up by journalists in the media whose editors and owners are not known for championing the welfare of ordinary working people of Australia. In every industrial dispute throughout the last three decades I have never known the same media to come down on the side of the workers. They were inevitably on the side of the bosses and on the side of the companies. Did any honourable member every read an editorial supporting the thousands of striking workers? Could it be that there has not been one just and justified strike in the past three decades since I began reading the newspapers here? Could it be that just once the workers were right and the bosses wrong? I believe it was so on many occasions. However, somehow the truth about the matter never found its way into newspaper editorials. When we read in the papers today that the Hawke Labor Government is not looking after the working people and their families, one wonders how much credibility to give to the media scribblers, who never had the guts to stand up for the workers. So we can disregard such accusations voiced in sanctimonious articles and editorials, but of course we have the same platitudes parroted by the Opposition. Of all people the honourable member for Bennelong and Leader of the Opposition (Mr Howard), the millionaire Elliott, the honourable member for Deakin (Mr Beale), and other millionaires suddenly became the champions of the Australian worker and with great sensitivity declared that Labor had abandoned its base. Mr McGauran —It has, and you cannot deny it. Mr KENT —Let me remind those who may be so gullible that they forget that only just over five years ago, Fraser as Prime Minister, the honourable member for Bennelong as Treasurer, and John Stone as head of the Treasury, were doing their damndest to throw the workers out of their jobs and ruin the economy of this country. They had no time for people in poverty; they had no time for the Australian workers and their families. Time and again they declared that their policy was to deal with the balance of payments, to deal with the deficit and inflation first, and to fight unemployment afterwards. Their policies led to record inflation, a deficit of nearly $10 billion, and over a million unemployed Australians. Their achievement was to add another million Australian families to the scrapheap of unemployment. One does not have to be a Rhodes scholar to understand that the monetarist policies pursued by the honourable member for Bennelong and his acolyte, John Stone, then the head of the Treasury and now the Opposition's economic expert, led to the ruin of a million workers and their families and nearly ruined the economy of the whole country. In late 1982 and early 1983 I had people coming to my office to ask me to find jobs for them. They were not only ordinary factory hands and unskilled workers; many of them were skilled metal workers, fitters, and even plumbers, who lost their jobs because of the policies of the Fraser, Howard and Peacock Government. So do not give me the bullshit that they care about the worker. Finally, the Government of Fraser, Howard and Peacock, which came into being in 1975 by entering through a back door of the Governor-General's residence, then occupied by a sot, was thrown out unceremoniously by the Australian people in 1983. The Government of Bob Hawke, which is now being accused of not looking after the worker, inherited a collapsed economy, record inflation, a $10 billion deficit, over a million unemployed and untold misery caused to scores of ordinary Australian families by those opposite who now want to masquerade as the workers' friends. Let me remind the members of the Labor Party, as well as the public at large, that the first thing the Hawke Labor Government undertook was to fight inflation and to fight unemployment simultaneously. The Hawke Labor Government succeeded in bringing down the inflation rate and also in reducing unemployment. We reduced inflation by half and created over a million new jobs. We have given one million Australians back their jobs, jobs that were taken away from them by the Fraser-Howard Government. To workers and their families it is of the utmost importance to have a job to go to and to receive a pay envelope, a fair pay after a fair week's work. Thanks to our Labor Government I seldom now have anyone asking me to assist him or her to find work. To me the one million jobs created by the Hawke Government are not mere statistics-- Mr Milton —One million one hundred thousand. Mr KENT —As the honourable member for La Trobe says, it is now 1,100,000, to be exact. The 1,100,000 jobs created by the Hawke Government are not mere statistics, but a noticeable and actual improvement of the living standards of workers and their families in my electorate. One has only to go out into the main shopping centre in Springvale to see how busy it is. The tills and cash registers are turning over at a fast rate and one can sense that things are vastly improved since the depression created by the conservative government's mismanagement of the economy in the early 1980s. I would like the members of this House to visit the industrial areas of Moorabbin, Cheltenham, Springvale and Clayton to see the bustling industrial traffic on the roads and the vacancy signs on the factories. Honourable members opposite probably do not know that to those who live from honest work their weekly or fortnightly pay is extremely important, for it is from their pay envelope that the rent or payment for the house comes, as well as the children's school shoes and the family's weekly food bill. I know this only too well as being a worker all my life before I entered parliament I and my family depended on that pay envelope. So when I say that the Australian worker is vastly better off under Hawke than under Fraser, Howard and company, believe me I know what I am talking about. After all, look who is saying that our Prime Minister (Mr Hawke) has lost touch-the Elliotts, the Julian Beales and other millionaires. All his public life, the Prime Minister, first as an industrial advocate and later as the President of the Australian Council of Trade Unions, has done nothing but fight for the pay and better conditions for the Australian worker. Mr Sharp —Who wrote this for you? Mr KENT —You can have the manuscript. People opposite, like the honourable member who interjected and his Leader, are now accusing the Prime Minister, saying that he is not looking after the workers, while in the same breath they are whingeing that wages are too high and repeating the idiotic platitude that the Australian worker is pricing himself out of the job. You cannot have it both ways, even if you have the thick hide of a politician. You cannot say that the Prime Minister is not looking after the worker and then turn around and say that the worker has it too good. Whoever tries to say that will be picked up even by an eight-year-old kid. It is not only the million jobs created that I, as a member of the Bob Hawke team, am proud of. There are a number of policies and reforms introduced by this Government that have not been attempted by any other government in our history. The tax reform introduced by this Labor Government stands by itself as a monument of fairness. For the first time in many years the distortion of our tax system is being rectified and the rich are now called on to contribute their share. Capital gains tax has been introduced, despite the opposition of those who are protecting the rich and yet claiming that Labor has abandoned its base. They accuse us of hobnobbing with millionaires, yet we made the rich pay for their dinners through introduction of the fringe benefits tax. Because we have such policies I am proud to be a member of the Hawke Labor team. We are looking after the low income earners. We introduced the family assistance scheme whereby we supplement the income of the poor workers and their families by $66 a week tax free. But we are not looking after the workers only, whether poor or better off; we are also looking after those who are on pensions or other benefits. The real value of pensions has increased to 25 per cent of average weekly earnings since we became the Government and the value of single parent benefit and unemployment benefits have also been increased. In education, we have increased students' assistance through Austudy. We have also increased the retention of students in our schools to levels never previously expected. In health, we brought in Medicare and thus secured free medical and hospital care for all Australians. In defence, we are the first Australian Government to take on an independent defence posture. In the past the conservative governments became aware of our defence needs only during election campaigns. Only now under the Hawke Labor Government can our people in the north feel safe and relaxed. The building of the new air base at Tindal, the F18s, the building of our new submarines, the acquisition of new Sikorsky helicopters, the development of our over-the-horizon radar system Jindalee, and other measures will ensure that we can independently take on and hit the enemy in case of a regional conflict. No longer have we to seek cover under the apron of Mother Britain or Uncle Sam. Whatever field we look at, the achievements of the Hawke Labor Government are considerable. Take, for instance, the environment. One of our first actions when elected in 1983 was to stop the ecological vandalism of the Tasmanian conservative Government. We preserved the Tasmanian wilderness for the generations of Australians to come. Kakadu, Daintree and the stopping of the logging in the Lemonthyme are only a few instances to remind us that this Government cares about the environment. Now contrast these policies and achievements with those of the Opposition when in government and what honourable members opposite have to offer as an Opposition. As I said previously, when in government Fraser, Howard and Peacock threw one million Australians out of their jobs and left us with a record inflation rate and a $10 billion deficit. What have they to offer now in opposition? They have no policies whatsoever. As I said in the House only a few weeks ago, if the Australian people are so gullible as to trust them ever again they will be in for a rude awakening. Mr McGAURAN(Gippsland)(9.01) —I find it almost unbelievable that the honourable member for Hotham (Mr Kent) should impress upon this House at the commencement of his diatribe his credentials as a man of conscience and independence and then turn into the most mealy-mouthed apologist imaginable for the Hawke Government. He put to shame a number of those careerist, ambitious, New South Wales Labor right wing young members who want a position on the front bench as soon as they can arrange the departure of a few of the tired, old, worn, long overstaying their welcome members. It is absolutely incredible-so much so that even the honourable member for Hindmarsh (Mr Scott) and the honourable member for La Trobe (Mr Milton), who together with the honourable member for Hotham make up the uranium troika, rolled their eyes several times in disbelief that the supposed defender of the working class should crawl on his belly to the Prime Minister (Mr Hawke). His praise was unrestrained, first for the Prime Minister and secondly for his Government. We had a meaningless series of class warfare slogans, the sort of jargon that means nothing-so much so that the honourable member for Hotham, as evidence for this economic upsurge under the Hawke Government, cited the undoubted scientific, irrebuttable evidence of heavy traffic on roads around industrial areas and-wait for it, there is more!-a bustling shopping centre. What credibility does the honourable member have? It was fascinating that he recited the accusation that the Hawke Government no longer represents the working class, low income earner, and he blamed journalists and the media for perpetrating what he believes is a myth. It is not a myth. The Premier of Victoria made that comment on the weekend at the Victorian Labor Conference. And he is not the only one. The Minister for Social Security (Mr Howe) said that his Government appeared to have double standards. In Brian Howespeak, that means that the Government does have double standards. He is a member of Cabinet. He cannot put the argument any stronger. It is a devastating indictment on his own Government for a Cabinet Minister to accuse the Government of appearing to have double standards. It is not only the senior members of the Labor Party who accuse the Hawke Government of being out of touch; it is also the electorate. Do those opposite remember the electorate, the people it is supposed to represent? The New South Wales election was a landslide rejection of the Labor machine in that State and all that it represents, as well as the way it dominates this Federal Government. New South Wales is not the only example, although it is the most dramatic. What about Port Adelaide? What about the Adelaide by-election? Mr Barry Jones —What about Barambah? Mr McGAURAN —The Minister for Science, Customs and Small Business refers to Barambah. The Labor vote in that electorate was 16 per cent. That is the Labor Party's representation in the bush. Apart from Broken Hill, the Labor Party in New South Wales does not hold one rural seat. Mr Tim Fischer —And only by a handful. Mr McGAURAN —And then only just, literally by a handful of votes. Mr Sharp —What about the by-elections in Western Australia? Mr McGAURAN —In the by-elections in Western Australia swings of 20 per cent and 24 per cent were recorded against the Labor Party. If the honourable member for Hotham is the best advocate the Government can present, it had better go back to the drawing board. The honourable member tried to portray all this as a giant conspiracy of, to use his words, the `bosses dominated media'. For heaven's sake! And he is serious. Mr Sharp —Who are the bosses' mates? Mr McGAURAN —Who are the bosses' mates? They are not mates of ours. I do not mix in black tie circles where people drink from brandy balloons, as the new New South Wales Opposition Leader says, and smoke cigars. Instead, the Opposition wants to represent those below the poverty line, and they number 700,000 more since the Hawke Government came to power in March 1983. What conscience does any member of the Government have? I would far prefer a member of the Government to come in here and say, `Mistakes have been made, we have drifted from our grass roots, we are not representing the aspirations of the working man and woman', and get down to a sensible debate. Those opposite should not come in here and try to pull the wool over our eyes. They have not even pulled the wool over the eyes of the people. The naivety with which Government members think the Opposition and the electorate can be fooled is quite remarkable. One of the extraordinary claims of the honourable member for Hotham was that the Hawke Government has brought in a tax system that is a model of fairness. The tax system is suddenly a model of fairness! Is that not remarkable for a government that introduced the fringe benefits tax, the capital gains tax and the assets test, and is about to introduce a superannuation tax? Members opposite should not try to deny it. Barrie Unsworth tried to get the Labor Government to rule that out, and it let him down. Mind you, that was only one of a number of contributing causes to his stunning defeat but, nonetheless, the Government is committed to a superannuation tax-there is no doubt about that. For evidence of that we only have to go to that good old reliable slammer of the Government, the betrayer of the Government, the Minister for Social Security. On 10 March this year in the Sydney Morning Herald the Minister for Social Security had this to say about major businesses not paying tax: What strikes me about the industry- and the Minister was referring to superannuation funds- is that they are accepting that their appropriate status is going to have to change. What they'll be looking at is what are the elements of the total package that's being considered. . . . Of course they'll kick and scream, but I think that's reasonable. There is no doubt at all that, although the Prime Minister prior to the 19 March New South Wales election tried to hose down the debate, initiated primarily by Barrie Unsworth himself, the Minister for Social Security stated clearly that the Government had plans for taxing superannuation funds, not just as part of a review but actually for implementation. Thus, no member of the Government should pretend that this Government has clean hands when it comes to tax. Remember that, regarding the assets test, the capital gains tax and superannuation, the burden will fall principally on the shoulders of those whom the Government tries desperately to pretend it represents-blue-collar workers who are drifting away from the Government in droves. It should be said that Labor is losing the blue-collar worker but so is the trade union movement. In the past few years the percentage of the work force that is unionised has dropped to 46 per cent from about 56 per cent. That is a dramatic fall and it is now accepted by the Australian Council of Trade Unions (ACTU) that that percentage of the work force that is unionised will continue to fall. That is what Australia Reconstructed is all about. Power has fundamentally changed in the trade union movement away from the individual trade unions, no matter how large, to the ACTU-that ever-expanding bureaucracy, a home place, indeed a training ground, for a career as a politician. That will increase the sense of alienation of the average worker and make him even more removed from the decision-making process. The ACTU in all its negotiations, its rationalisation, and its move towards industry-based unions rather than craft-based unions acknowledges that unionism in this country is declining. The reason is obvious: the trade unions, with all their punitive requirements, particularly compulsory unionism, no longer represent the average working man and woman. The honourable member for Hotham has, as have other Government members in this debate, made much of the supposed 1,100,000 jobs that have been created by the Hawke Government. Anyone can juggle figures, but there are some which stand alone and which are unambiguous and evidence in themselves. Let us consider some of the plain, straightforward figures. First, the rate of youth unemployment in this country remains at over 21 per cent. There is nothing more disheartening for any member of parliament, any parent or the young person concerned than for that young person to be unemployed, particularly for prolonged periods. That is totally unacceptable and, as long as the Government refuses to deregulate the labour market, it will be more difficult in future for young people to find jobs. The average duration of unemployment has increased from 33 weeks in 1982-83 under a coalition government to an extraordinary 47 weeks in 1986-87 under this supposedly saving Hawke Government which, allegedly, concentrates on the welfare of the unemployed. Nothing could be further from the truth. Let us talk not in the bureaucratic Public Service jargon of the Treasurer (Mr Keating), who comes into this place after he is briefed every morning and mindlessly repeats the phrases and some of the figures that have been taught to him. Mr Tim Fischer —Unrelated to reality. Mr McGAURAN —Yes, unrelated to reality. He repeats them parrot-like and they are indecipherable by most people and economists. However, let us get down to the plain language that members of the Government must employ if they are to have any hope-I do not believe there is any-of regaining some sort of communication with the people they are supposed to represent. As honourable members know, the Government, because of its particularly close, cosy relationship with the ACTU-for want of a better expression-has caved in and supported wage increases without productivity offsets. Everybody knows that to do such a deal leaves everybody worse off because inflation inevitably increases. Inflation, which worries every person because it decreases purchasing power, remains more than double the rate of the Organisation for Economic Cooperation and Development (OECD) trading partners. This is proof in itself that almost no progress has been made in lowering the high cost structure. Interest rates affect all members of the community: young people seeking to buy a house; people seeking personal loans; and those trying to get ahead who do not sit and wait for a government handout. Interest rates are fundamental to their ability to improve their lot in life. Under the Labor Government interest rates continue at historically high levels. Fortunately, there has been some decrease but it is only marginal. We in this country have been conditioned to accept as major victories slight reductions in the unemployment rate and minuscule reductions in interest rates. We cannot accept any longer the snake oil salesmanship of the Treasurer and the way that the Prime Minister manipulates and tries desperately to paper over the structural cracks in his economic policy. I turn now to an even larger problem that is looming on the horizon because of Labor's huge budget deficits. As long as we have huge Budget deficits, coupled with a failure to lower inflation, a massive build-up in the foreign debt will result. The honourable member for Calwell (Dr Theophanous) does not care about the foreign debt. I have never heard him make a valid point in relation to the foreign debt, and he cannot explain his Government's policies for reducing it. There is only one way to reduce the foreign debt and it involves a long-term adjustment process. Imports must be held down and exports must be increased. This requires a sustained period of non-inflationary growth, which the honourable member for Calwell would acknowledge. In this country, we have not been successful in achieving non-inflationary growth for any extended period. In addition, the Economic Planning Advisory Council has advised that Australia needs growth of between 2.75 and 3 per cent until the early 1990s to stabilise the foreign debt. Australia is not anywhere near that figure. It is expected that growth will flatten to about 1.5 per cent through 1988. The Government is not reining in its deficit; nor is it addressing successfully some of the fundamental planks of economic policy. As a result, the nation's foreign debt is exploding. The result is very obvious. Early in March of this year Moody's Investor Services made an assessment of the Australian economy. The honourable member for Calwell seeks to interject, but it was the Minister for Industry, Technology and Commerce (Senator Button) who said at the time that, unless Australia gets its house in order and reduces the foreign debt, the International Monetary Fund is likely to intervene. As a result, overnight Australians would have to accept a 20 per cent reduction in wages and a reduction in social services spending of about 30 per cent. The Government's senior economic Minister in the other place made the same point, and reflected the analysis of Moody's Investor Services. As honourable members are aware, in September 1986 Moody's downgraded Australia's credit rating from AAA to AA1. Since that time, the Australian economy has continued to deteriorate as the level of the overseas debt has increased. I do not rely on one internationally known and respected assessment agency. The international credit agency Standard and Poors, which downgraded Australia's credit rating from AAA to AA-plus in December 1986, soon after Moody's downgrading, agreed with Moody's assessment of March of this year. In their decisions, both agencies mentioned the structural weaknesses in the Australian economy and the growing foreign debt. When Moody's made its assessments, it relied on a number of facts. Let any member of the Government, particularly the honourable member for Calwell who will follow me in this debate, address these points. First, Australia's high current account deficit and foreign debt accumulation are likely to persist for several years, and I have already explained why that is so. This Government's heavy anti-business tax regime does not allow for proper growth and investment. Secondly, in the short term, comparatively-I stress that-high inflation and unemployment rates will persist. Thirdly, Australia's debt service ratio will climb to 40.9 per cent in 1988 compared with the OECD average of 17.6 per cent. Fourthly, the current account deficit, as a percentage of gross domestic product, will improve to only 3.9 per cent compared with the OECD figure of 0.4 per cent. The Government is totally out of touch with ordinary Australians who are trying desperately to carve out a living for themselves and, through their own initiative and hard work, reap the rewards. Government members are cynical, opportunistic and only interested in holding on to the treasury bench. Hardly one of them has a social conscience. How can they apologise for a government that has increased the number living below the poverty line by 700,000 in five years? What about those people who go into their electorate offices? They certainly come into our offices. They cannot pay the mortgage, they lose their house, they lose their job or their kids lose their job. Members opposite should not pretend that they have a mortgage on compassion or an understanding of the aspirations and worries of working men and women in this country. We who represent country people and Liberal Party members who represent urban people deal with these people every day. They do not go to honourable members opposite because they do not give them any understanding, let alone any promised course of action. A superannuation tax will be the final nail in the coffin of this Government. If it thinks that it can impose arbitrarily a tax on the profits of superannuation funds so that annuities to superannuants are correspondingly reduced, it has rocks in its head. No member of the Opposition wants to see people suffer so that we can return to the treasury bench; but that is what it will mean. If it means that people have to bleed, then we will rectify that when we return to government. People should understand that this is a high taxing government which does not seek to reward initiative or hard work and does not try to put money back into the pockets of people so that they can make decisions affecting their lifestyles-their education, health services and so on-in the way that we would want them to. We have here a major difference in the fundamental approach to rectifying the economic problems which we all acknowledge this country faces. At the next election the people will have a clear choice between conflicting and irreconcilable political philosophies. I welcome the judgment of the Australian people as to that choice. Dr THEOPHANOUS(Calwell)(9.21) —We have just heard an extraordinary diatribe from the honourable member for Gippsland (Mr McGauran) which was distinguished by being totally uncharitable, totally unfair and based on a total ignorance of economics. The honourable member should go and study a bit of economics. I was trying to follow his convoluted arguments. I was amazed that those in the Opposition parties who talk about the introduction of a consumption tax should be talking about the problem of inflation as well. What would happen to inflation if we introduced a consumption tax on food and basic necessities? I will tell honourable members what would happen. The cost of living for the ordinary person would skyrocket as a result of a consumption tax. Let us get past this nonsense. The honourable member for Gippsland was totally uncharitable because he failed to recognise that we have created more than one million jobs in five years. That is a fact. Opposition members can rave on as much as they like but it is still a fundamental fact and it contrasts with the situation when they were in government under Fraser when half a million people lost their jobs in two years. Factories were closing down around the country every day as a consequence of their kinds of policies. Have they learnt anything from that? No, as I shall illustrate, they have learnt nothing. Let us come to the point that the honourable member mentioned. Let us give him a bit of a lesson. He said that the unemployment rate had gone down by only one to 1 1/2 per cent. But let us get that situation in perspective. The fact is that the participation rate has increased dramatically since we came into government. In other words, people who had previously given up any chance of being employed are now going into the work force, not in their thousands, not in their tens of thousands but in their hundreds of thousands as a result of the increased participation rate. In addition, more than half a million people have come to Australia and added to the population-another factor that should be taken into account when looking at these figures, rather than talking gobbledegook. Let us assume that we return to the participation rate which existed when we came into government in 1983. What would happen if one looked at those figures? What would the unemployment rate be if the participation rate was taken as the one that existed at that particular time. It would be 4.3 per cent which is historically low-an amazing level in any Western country at the moment. Honourable members opposite cannot get past that important fact. If one is going to make criticisms let them be made where they are valid and due. One should not make criticisms in areas which are invalid. Honourable members opposite cannot criticise this Government's job creation program which, by the way, they repeatedly opposed, saying that it would not work. When the Prime Minister (Mr Hawke) announced that half a million jobs would be created in three years, honourable members opposite laughed and said it was impossible. But we did much better than that. We are a growing nation. We are bringing in people and we are developing this nation. I would have thought that people from the National Party of Australia, supposedly representing the country areas, would be supporting not only the immigration program and the development program that has been put down by this Government but also the employment program which is creating jobs for people coming in as well as for other Australians. That is the record and that is what stands. We should all get together and talk about how to bring Australia forward and how to develop this nation instead of engaging in this kind of uncharitable rhetoric which we have heard from the honourable member for Gippsland. The honourable member for Gippsland seems to think that he knows everything about economics. He reckons that growth in the economy is only going to be 1 1/2 per cent. That is the prediction. But there is something that the honourable member for Gippsland has not looked at-- Mr Snowdon —The oracle from Gippsland! Dr THEOPHANOUS —Yes, the oracle from Gippsland. There is something that he has not looked at. In the last three years every prediction of the level of growth has been wrong because it has been surpassed. Has the honourable member for Gippsland noticed that? Has he noticed that we have, in fact, surpassed the predicted level of growth? Has he looked at the growth created even during a time when we were squeezing the economy? Of course he has not. He does not know much about these things but he pretends to lecture us about them. He then said that we need to further rein in the deficit. How does one rein in a Budget surplus? We have already reined it in and achieved a surplus. Given this fact, what are we supposed to do after that? Mr McGauran —You have sold off some property. You are in deficit. Mr DEPUTY SPEAKER(Mr Blanchard) —Order! The honourable member for Gippsland will not interject. He is also out of his seat. Dr THEOPHANOUS —The honourable member says that we are not really in surplus-we are really in deficit. I am not surprised that he is getting excited because we are exposing him. He has specifically asked me to make some comments on his speech. All I am saying is how can one rein in the deficit when it is a surplus? But leaving that point aside, the honourable member then made some comments and quoted Senator Button. Of course, he did not say that Senator Button's comments were made about 12 to 15 months ago when we were in a very different economic situation from that which we are in now-an economic situation which we have pulled out of remarkably in terms of the current account and the collapsing Australian dollar. Of course, the honourable member for Gippsland did not mention the Australian dollar. I remind him that the Australian dollar is now valued at in excess of US74c, so we are in a very different situation from the one to which he referred. At the time Senator Button was expressing some concerns in his usual frank way but if one were to ask Senator Button today whether he thought there was any problem of that kind he would say, `Certainly not, because we have completely transformed the situation and have passed those problems'. Mr McGauran —What happened in New South Wales? Dr THEOPHANOUS —Do not worry; I will come to New South Wales. Obviously, the honourable member for Gippsland wants to talk about the electoral fortunes of the National Party. I am really tempted, but I will proceed to deal with the other issue that was raised by him-the structural weaknesses in the economy. What an impertinence for the Opposition to talk about the structural weaknesses of the economy. In the period when honourable members opposite were in government they kept telling us, `Don't worry about the manufacturing sector of Australia. It doesn't matter if it is destroyed. It doesn't matter if factories are closing all over Australia. That's not a worry because we're going to be saved by the resources boom'. Do honourable members remember the fictional resources boom? According to Sir Phillip Lynch and other people, $30 billion would go into all these projects in Australia. We were told that we did not have to worry, that we would be sitting pretty because we did not need to develop our manufacturing resources or our high technology industries. All we had to do was sit tight and sell off our metals to other countries. According to Sir Phillip Lynch and other people, if we did that we would be right. I remember the repeated claim that the future of Australia would lie in the resources boom. We were told that we should not look at the other situations in terms of manufacturing. What rubbish! If any government has addressed the questions of the real problems of structural change, it has been this Government. The Minister for Industry, Technology and Commerce (Senator Button), other senior Ministers and the Government in general have addressed the question of industry reconstruction. Honourable members opposite might think that this is an easy question, but it is a very difficult one. The honourable member for Gippsland mentioned Australia Reconstructed. He threw this proposal out as though there was something dramatically wrong with it. The fact of the matter is that Australia Reconstructed provides a blueprint for getting around structural weakness problems, for restructuring Australian industry and for building up the manufacturing and technological resources of this country. The honourable member for Gippsland, in pretending that there is something particularly wrong with discussing the concepts and approaches of Australia Reconstructed, could not be further away from where the economic and industry debate in this country has to take place. Having said all of that, let me say some positive things. Mr McGauran —Good. Can I go? Dr THEOPHANOUS —The honourable member can go. One of the positive things that I want to talk about is the need for a comprehensive development strategy for Australia. We need to think about the fact that we are still a young nation and that we still have to develop ourselves in a number of ways. I have talked about the need for economic development. Members of the Opposition have been getting up and, in a false sort of way, trying to talk about the so-called employment problems, the so-called inflation problems and the so-called investment problems, none of which exist at the moment. What we ought to be looking at are ways and means in which we can positively increase the pace of development of Australia. There are some problems that we need to address if we are to do that. As I said, we are addressing the structural reconstruction issue. But some issues need to be looked at, one of which is regional development. We are a very large continent within which development is uneven. We need to think about how we can get economic development in depressed areas which have high levels of unemployment and in new areas which are undeveloped but which have potential for development and to which we can move sections of our population or encourage new immigrants to go into. We need to build factories, offices and cities in those areas. Less than 8 per cent of the population of Australia live in the top half of our country. We are underpopulated and we do not have enough economic and human resources in that area. We need to think about the development of the north of Australia. Mr White —What are you going to do about it? Dr THEOPHANOUS —I can tell the honourable member that we are going to do a lot more than he would. At least we are talking about this matter and working out a strategy for regional development. All that members of the Opposition do is talk in negative terms. I have never heard one Opposition spokesman speak in this House about this very important issue. All we hear is the sort of nonsense that we heard from the honourable member for Gippsland in his speech. Let me say this about regional development: we need to direct resources-- Mr White —What is your plan? I am asking you. What is your plan? Dr THEOPHANOUS —The honourable member asks what we are going to do about it. We need to discuss these issues as a parliament. We need to put down policies to encourage regional development. I am saying that to this House and to our Government. It is a very important matter. Mr Braithwaite —They aren't listening. Dr THEOPHANOUS —The honourable member says that the Government is not listening. Unlike the Opposition, that is totally divided amongst itself and does not know whether it is Arthur or Martha, we have an excellent system under which the Caucus and members of the back bench are able to have their ideas heard in the Cabinet and are listened to. This happens to a greater extent than honourable members realise. We need to think about this issue of regional development in two ways. As I said, Australia has underpopulated areas. Incentives need to be given for the development of industry in those areas. We also have to look at areas such as the steel cities, which have been dependent, perhaps excessively dependent, on a particular industry. We have to think about ways and means of encouraging new industries and taking up the populations. There are also problems in some areas of the larger cities of Melbourne and Sydney where new industries have not been replacing industries which have closed. What we have is a disjuncture between the population pattern and the industry pattern. Australia is a country of home owners. People who have bought houses in particular areas do not want to have to go to the other side of a city to get employment. They want employment close to their homes. So we need to look at regional development not only in the broad sense but even within cities. We have to zero in on that sort of problem. In addition to an economic policy we must develop a population policy. We have heard recently criticisms about the need for and the importance of immigration irrespective of the very controversial issue of the composition of our immigration program, about which I will have a lot more to say in this House this year, the population issue has yet to be met. It is good that sections of the Opposition have recognised the importance of the population issue. Let us hope that we can get a bipartisan approach on the need for an increase in immigration that can be sustained in the nation. It is important that there be an increase that can be economically and socially sustained. That is why we have to be very careful about how we fashion our new immigration program. Having said that, let me say something about the need for population. Our population is ageing. In the next 15 years the number of old people will double. I know that this point has been mentioned, but it is still valid. We need to ask ourselves how we are going to afford to sustain older citizens at the level of pensions and benefits that we have at the moment or even at an improved level of pensions or benefits? If we are to achieve that, it becomes important that we impact on our population by adopting an immigration program that is orientated towards young people who can come, work and make a contribution here. The last population report to the Parliament clearly indicated that the program which we have had in place for the last four or five years, and which has been orientated towards young people, has had a clear and demonstrable impact on the ageing of the population. In other words, if we had not orientated our program in the last four or five years towards younger people-and most migrants are younger-we would be in a much more serious position in relation to the population getting older. So, if we are to have a growth and development program, we have to be concerned not only with the economic issue but also with human resources. The human resources that we need in particular must be based on the immigration to Australia of younger people who will work and contribute. This does not mean that all immigrants have to be highly skilled computer programmers or something like that. What they have to be is motivated to work and thus to contribute to the development of the nation. I think we are all agreed on that. If that is the case, we may be able to achieve an agreed position on the composition of an increased immigration program that will contribute to Australia's development. I hope that we can get some agreement across this House on the need for an overall framework of development-that is, economic, social and population development. If we agree upon such a framework of development in Australia, Australia's future will be great. Mr DEPUTY SPEAKER(Mr Blanchard) —Order! The honourable member's time has expired. Mr WHITE(McPherson)(9.41) —I have heard the honourable member for Calwell (Dr Theophanous) talk a lot of rubbish in this House over the years, but I thoroughly agreed with him when, in the last few minutes, he spoke about a sensible approach to the immigration debate. It is very important for this country's future that we arrive at a sensible conclusion as to the sort of immigration policy we want. Tonight I want to address, briefly, a couple of defence matters. Last week two submissions were put before the Joint Parliamentary Committee on Foreign Affairs, Defence and Trade, which is looking at wastage rates in the Australian Defence Force. The submissions are quite devastating in terms of the information they contain. They show that the Australian Defence Force is literally withering away. I take the Minister for Defence (Mr Beazley) to task on this matter. It seems to me that, for some time now, the Minister has been posing as the man who would restructure the Australian Defence Force. What he is doing, in fact, is presiding over the dismemberment of that Force as we know it. I regret to say that in this matter the Minister is assisted largely by the Press. With some notable exceptions, the Press seems neither to know nor to care what is happening to this country's defence forces. I invite the Press to read those two submissions-one by Admiral Hudson and the other by General O'Donnell-which were submitted to the Joint Parliamentary Committee on, I think, Monday of last week. The Royal Australian Air Force (RAAF) did not put in a written submission. I am not quite sure of the reason for that. I find it difficult to understand because, of the three Services, the RAAF has probably the most pressing problem with the resignations of its pilots. I hope that it will put in a submission, perhaps by way of the general Australian Defence Force submission, so that it can place on record just where it sees the problems and outline its attempts to identify solutions to them. Many of our operational units are barely operational. In most of those units experience levels are very low. Enormous resources are being directed from operational matters to the training of recruits as members of the Defence Force vote with their feet. I wish quickly to go through some of the main points of the Royal Australian Navy's (RAN) submission. At present, the RAN has a shortage of 500 personnel. Despite the closure of several bases and the paying off of ships, there will be a shortfall of 1,200 men and women in the RAN in the next five years. Operational capabilities are being severely reduced because of high wastage rates and low levels of experience. This year there will be a 58 per cent increase in officer wastage of the rank of commander and below. There is a 45 per cent shortfall in engineer officers of lieutenant-commander rank. This year there has been a loss of 30 ships commanders against a long term average of seven. Among those 30 were five frigate or destroyer commanding officers. There are only seven frigates and destroyers in the whole fleet and five men who were commanding those ships have left in the last year. In past years it was almost unheard of for commanding officers to resign from the service. The ambition of officers as they enter the service is to command a unit. To have five resign while in command or shortly after they have left is unheard of. There is a 22 per cent shortfall in specialised sailor categories. There is a shortfall in experienced submarine personnel. In the last year or so, almost half the people in the submarine service have been under training. Admiral Hudson went on to identify the likelihood of increased numbers of groundings, collisions and accidents at sea, with the trend worsening. There is a low level of proficiency in ships, including declining standards in weapons practice. This trend is accelerating. There are insufficient ships in which to train officers. There is low morale due to poor pay, poor conditions of service, low job satisfaction and lack of Government interest. Those are not my words; they are the words of the Chief of the Naval Staff in a submission which is not a week old. On the same day, the Chief of the General Staff, General O'Donnell, also put in a submission on behalf of the Army. He reinforced many of the points made by Admiral Hudson. I shall outline the main points in the Army's submission. In two years the Army has lost 10,000 soldiers and 1,200 officers from a base force of 32,000. In two years it has lost more than one-third of its total personnel. The Army's operational readiness has been reduced because of high wastage rates, inexperienced officers and soldiers, and increased administration and training costs. The core of the Army-the six infantry battalions which are the heart and guts of the Australian Army-are all under strength. Some are as low as 30 per cent under strength, including the under-strength battalions in the Operational Deployment Force, the cutting edge of the Army in Australia. Communication units are running at about 10 to 13 per cent short. Also, the Army's submission identified a shortfall of 421 officers with an increased workload being carried by fewer officers and experienced non-commissioned officers; a shortage of qualified and experienced officers and NCOs for promotion; an officer training system that has no hope of making up the shortfall because its capacity is limited; and general dissatisfaction caused by long hours, poor career management, poor pay and conditions, inadequate housing and allowances and, again, lack of interest by the Government in personnel matters. Mr Lee —What is your solution? Mr WHITE —I am glad that the honourable member asks; I will tell him in a minute. With that sort of record, the man who poses as the Minister for Defence-he might have some claim to be called the Minister for defence equipment-should hang his head in shame. To pretend that he is commanding the Australian Defence Force, is responsible for it, is a disgrace. Any man who has lost something like a third of his force in three years should resign. For example, today the Minister was talking grandly about purchasing two new submarines. He cannot even get one built. He talks about purchasing an additional two submarines with his usual obsession about equipment while the 70,000 men and women are laughing. They are saying, `Here we go again. He has big, new, grand equipment schemes, but what about us?'. The question was asked: what should be done? Let me spell out what should be done in personnel matters. The Defence Force Remuneration Tribunal must be beefed up so that it can review pay and allowances regularly. It is already far behind any reasonable program and some of the allowances are taking years to put through. The Tribunal must treat the Services as a unique profession. The Government should throw out the guidelines that constrain that Tribunal. The guidelines I am referring to are those adopted by the Australian Conciliation and Arbitration Commission. The Services are a unique profession. They have a unique task, and they must be treated as a separate entity. To force the Remuneration Tribunal to treat the Services as though they are just another bunch of public servants in uniform will never solve the problem. An amount of $75m has been allocated by the Government over the next 10 years for housing. This is simply not going to be enough. As well as allocating more money for housing, which is one of the most contentious problems facing the Services, the Government must free up the bureaucracy which apparently is starting to stifle the operations of the Defence Force Housing Authority. I suggest that the honourable member for Herbert (Mr Lindsay) take a closer look at what is happening to Defence Force Housing Authority operations in his area. I understand that in the Sydney area the Authority has been given quite a lot of money. It has been told to go out and identify the houses it wants, and there the whole thing comes to a grinding halt because the bureaucracy steps in and the purchases are not allowed to proceed. It is no use setting up an authority if its operations will be blocked by unnecessary bureaucracy. We must put realistic family allowances into place. We must upgrade the education allowance. At last count, I think 87 people in the whole of the Defence Force were getting an educational allowance for their kids. No wonder they were getting browned off. They had to leave their children to ensure that they got a decent education, but they could not get an allowance to cover it. The disturbance allowance for families is ludicrous. We should ensure that child care facilities are made available and that units contribute to the maintenance of those child care units on Defence Force property. We should set up a system-the Australian Defence Families Information and Liaison Service could probably do the job-to help wives get jobs. Most Service wives work or want to work, but they find it very difficult as they follow their husbands around Australia. As soon as they apply for a job, for example in Townsville, they are asked where they live, what they do and where they come from. When they say they are Service wives, more often than not the prospective employer-- Mr Lindsay —It is not as bad as it used to be. Mr WHITE —Well, it is not. But the prospective employer will say that he wants someone permanent. It would be a very simple matter to set up a system whereby those wives are helped to get jobs through a local organisation around the big bases. We must look at remote area travel. It is no good putting people in remote places like Tindal and expecting that they will serve on happily without getting special attention in terms of returning to their families and cheap travel home. We must look at putting decent shopping facilities in some of these bases. For example, at Pearce in Western Australia there are no shopping facilities at all. It would not be a very difficult operation for the Department of Defence to go to a local private entrepreneur and offer him a concession on that base, instead of forcing people to go 40 miles down the road to shop when often they do not have a car or they are at work, or both. In terms of removals, it is high time that we allowed proper allowances to cover the costs of removals instead of forcing people to be out of pocket for the cost of new curtains, carpets, school uniforms, registration of cars and of dogs and cats, et cetera, every time they move. We must look after our single members, not just those who happen to be living out at the time. There should be a removal allowance for all those single members. We must set up a military compensation scheme instead of forcing servicemen to go through the Commonwealth employees compensation scheme, which is not relevant to the work or the dangers faced by servicemen. We must review the Defence Force retirement and death benefits scheme. We must remove the anomalies, for example, that apply to officers who are penalised if they retire prior to a nominal retiring age, as distinct from non-commissioned officers, soldiers, airmen and sailors, who have no penalty at all having done their 20 years. There are other anomalies in that scheme which also need to be reviewed. We must consider giving those people access to their lump sum superannuation before they leave the Service, instead of forcing them to leave the Service before they can get that lump sum. That is why many of them leave. They want that money to build or buy a house or to educate their children. We must look at a system of bonuses for certain people who wish to remain in the Services. I do not say this with any pleasure because it is something that we want to avoid if we can. Of course, at the moment, that would include pilots. It does not make any sense to spend up to $6m on a pilot over a period of, say, six to eight years, only to see him leave the Service at the end of that period. Then we have to start the whole system over again. The system has just about ground to a halt. This year we will lose probably 130 to 140 pilots. The system can train only about 70. On that subject I note with some apprehension that the Government is proposing to integrate our pilot training system with New Zealand's. I believe that it would be an absolute disaster to lose control of our own system. In the first place I would have no faith in New Zealand under the Lange Government remaining a reliable ally. We have seen what it has done to ANZUS. We have seen the expense it has caused this country in looking after them in separate arrangements and exercises, and now we are proposing to hand over the initial training of our RAAF pilots to New Zealand. We will lose control of the system altogether. It is a crazy notion. I very much hope that the Government does not persevere with that proposal. We must look at Defence Force housing and ensure that the upper limit is realistic. We must look at the working hours that our service men and women are expected to put in. We must look at the lack of job satisfaction, about which they complain so much. And so it goes on. I wish to deal with some of the capital equipment projects which the Government has in hand. It is a valiant attempt to get some of these projects built in Australia. I fully support that, as does this side of the House. I only hope that the Government has the guts to take on the unions and, if necessary, introduce some essential service legislation to make sure that those projects, such as the submarine and frigate projects, take place here in Australia and do not have to be sent overseas to be completed. It is a fallacy and a fraud for anyone to pretend that the Australian Defence Force is in good shape. It is not. The Chief of the Naval Staff and the Chief of the General Staff indicated that last week. I very much hope that action is taken before it is too late. Mr DEPUTY SPEAKER(Hon. J. D. M. Dobie) —Order! The honourable member's time has expired. Mr LEE(Dobell)(10.01) —Once again we have heard the shadow Minister for Defence, the honourable member for McPherson (Mr White), provide us with another of his wish lists of what he believes the Government should be doing in defence. Mr Smith —It was a great speech. Mr LEE —The honourable member for Bass says it was a great speech and I suppose it was great in the sense that today, for once, we were not treated to the arguments as to why Australia should have an aircraft carrier. I suppose that is an improvement on the honourable member's usual contributions. The honourable member for McPherson said that our Minister for Defence, the honourable member for Swan (Mr Beazley), has an obsession for equipment purchases. I am sure that Australia's defence personnel would rather have a Minister for Defence who is obsessed with obtaining government approval to purchase all the most modern and effective equipment possible. We all remember what it was like under the Liberals when our defence forces were left virtually with slingshots. Under this Government we have the new submarines-hopefully under construction in the near future in Adelaide-planning for the Anzac frigates project, the F18s, the Seahawks and the Black Hawk helicopters. The Liberals did very little to try to make sure that Australian industry participated in such defence contracts. I am very proud of the fact that under this Government and this Minister we have ensured, to the greatest possible extent, that Australian industry benefits from defence force contracts. The first point I wish to cover in tonight's debate on the Appropriation Bills is the whole question of Anzac Day, which is celebrated next Monday. In my electorate of Dobell there are 9,510 repatriation beneficiaries. That is the largest number of repatriation beneficiaries in any electorate in Australia. Next Monday morning I will be honoured to participate in the dawn service at The Entrance, to be conducted by the Tuggerah Lakes Memorial Club and The Entrance-Long Jetty Returned Services League sub-branch. In addition, sub-branches at Toukley, Wyong, Wamberal and other places in the central coast will commemorate those who served their country in time of war, whether in the First World War, the Second World War, or the Korean, Malaysian or Vietnam conflicts. Next Monday, residents of the central coast, I am sure, will commemorate those who have served Australia. In addition, Anzac Day allows us to remember those people who were injured and, in particular, those who made the ultimate sacrifice for their country. It is also important that we remember the families of Australian ex-servicemen who fought overseas and the sacrifices which the wives and children of ex-servicemen have made for Australia. As all of us in this chamber know, Anzac Day commemorates the landing at Gallipoli on 25 April 1915, a battle which proved to be unsuccessful, yet a battle which allowed Australia to forge a reputation for courage, determination and valour whenever they were fighting for their country. At Gallipoli and in other conflicts we were often involved in engagements where all the odds were greatly in favour of our opponents, particularly in Gallipoli where the Turks were defending a peninsula, which gave them the advantage, the beaches being dominated by very steep cliffs. Australians at Gallipoli won the respect of their opponents during that battle. I am very proud of the fact that in the years since the battle at Anzac Cove in Gallipoli, Australians and Turks have grown close. In recent years, the Turkish Government has given us the great honour of renaming the cove at Gallipoli Anzac Cove, in honour of the Australians who fought and died on that peninsula. In return, Australia has renamed a bay near Albany in Western Australia from where the Australian Imperial Force convoys sailed in 1914. We have renamed that bay Ataturk Bay, after Kemal Ataturk who was the leader of the Turkish forces at Gallipoli. I have not had the privilege of visiting Anzac Cove in Gallipoli but I am told by my brother and other people who have visited Gallipoli that the impression which strikes every Australian who visits that cove is of the very young age of the Australians who died and are buried at Gallipoli, Australians with average ages of only 16 or 17. Given that I am, I think, now the third youngest member of this chamber and the second and fourth youngest members of the chamber are sitting at the table right now, the fact that young Australians aged 16 and 17 were making the ultimate sacrifice for their country is something we need to remember on Anzac Day. I am sure that all members of this chamber will do their best to attend ceremonies next Monday. I emphasise that our repatriation system, which continues to be one of the most generous in the world, is something that we must ensure is not allowed to deteriorate as the years go by and the number of veterans in our community decreases as our elderly veterans pass away. It is important that we acknowledge that our repatriation system is compensation, not some form of welfare. One other issue that affects not only veterans receiving service pensions but invalid and age pensioners is the pensioner rebate which the Treasury provides to those pensioners each year when they are filling out their tax returns. This year, 1987-88, the base single rate of pension, will add up to $6,093. Next year, 1988-89, given approximately a 6 per cent inflation rate, a single pensioner will receive $6,500. While the tax free threshold for ordinary taxpayers such as us is $5,100, for pensioners there is a rebate of up to $250. The problem is that at the moment any pensioner earning more than $6,142 starts to pay income tax. As I have explained, next year pensioners will probably receive about $6,500, which means they will be forced to pay about $131 in tax-which is unacceptable. The Treasurer (Mr Keating) should increase the pensioner rebate which is payable to service, age and invalid pensioners. It is simply unacceptable to expect any pensioner who has no income apart from the pension from the Departments of Social Security or Veterans' Affairs to start paying income tax. Along with such people as the Minister for the Arts and Territories (Mr Punch), who is at the table, I will do all in my power to make sure that the Treasurer takes action on this very important issue. The second matter which affects pensioners in my electorate and many others is provisional tax. At the moment the provisional tax threshold is $1,000. Any person, whether a pensioner or ordinary income taxpayer, starts to pay provisional tax if the non-wage income exceeds $1,000. At the moment the provisional tax net is starting to catch ordinary pensioners who, in many cases, become confused and simply cannot understand the details involved in completing provisional tax forms. They become very worried and concerned. Pensioners with only about $6,000 in savings in a building society account can be forced to pay provisional tax. I seek leave to incorporate in Hansard a table demonstrating the erosion by inflation of the provisional tax threshold since 1963. Mr DEPUTY SPEAKER(Hon. J. D. M. Dobie) —Provided the table meets the criteria set down by Madam Speaker, so be it. Leave granted. The table read as follows- Table 1 COMPARISON OF PROVISIONAL TAX THRESHOLD AND AVERAGE WEEKLY EARNINGS 1963-1988 Year Provisional tax threshold Average weekly earnings Provisional tax threshold as a % of AWE $ $ p.a. % 1963-64 ... 416 2,501 16.5 1964-65 ... 416 2,688 15.5 1971-72 ... 416 4,529 9.2 1972-73 ... 1,000 4,935 20.1 1986-87 ... 1,000 23,145 4.3 1987-88 ... 1,000 25,000 (est.)...4.0 Table 2 COMPARISON OF PROVISIONAL TAX THRESHOLD AND ANNUAL BASE AGED PENSION 1963-1988 Year Provisional tax threshold Annual base age pension Provisional tax threshold as a % of pension $ $ % 1963-64 ... 416 585 71.1 1964-65 ... 416 624 66.7 1971-72 ... 416 923 45.1 1972-73 ... 1,000 1,099 91.0 1986-87 ... 1,000 5,546 18.0 1987-88 ... 1,000 6,093 16.4 Mr LEE —I thank the House. The table demonstrates that the provisional tax threshold has been eroded. From 1963 until 1972, the provisional tax threshold was only $416. In 1972 that was increased to $1,000 where it has remained since. In 1972 the provisional tax threshold was 20 per cent of average weekly earnings. Today it has fallen to only 4 per cent of average weekly earnings. When we compare the position for the average pensioner, as table 2 does, we can see that in 1972 the provisional tax threshold was 91 per cent of the base pension for a single pensioner. Today it is only 16.4 per cent of the base pension. In 1972 a pensioner could have earned 91 per cent of the pension in interest before paying provisional tax. Today once a pensioner earns more than 16 per cent of the pension in interest that pensioner is collected by the provisional tax net. It is my personal opinion that all pensioners should be exempt from provisional tax. They should not be caught by the provisional tax net. Pensioners should not have to worry about completing forms which, in many cases, result in the Taxation Office collecting very small amounts of money. One other item on which I want to spend some time tonight relates to violence on television news programs. Mr Smith —Hear, hear! Mr Downer —There is too much of it. Mr LEE —Several honourable members are interjecting to say that there is too much violence on television news programs. I agree. There was a recent program on South Africa, I think produced by a former British Broadcasting Corporation (BBC) correspondent in South Africa. The program commenced at 8.30 on a Monday evening. It contained approximately 60 seconds of film of a black citizen of South Africa being stabbed with knives and hacked to death with butchers' cleavers. The BBC camera zoomed in as the blood flowed and the gentleman's eyes slowly lost focus as he died. I felt that this was something that was totally inappropriate, even though it was 8.30 at night, for the Australian Broadcasting Corporation (ABC) or a commercial television station to screen at that time of night. The reporter explained that he believed the footage was censored and not shown on British television because it was too violent. Yet several weeks ago we allowed the ABC to show that footage at 8.30 p.m. Last Sunday at 6 p.m., again on the ABC-I am not picking on the ABC because all of the commercial television stations are equally to blame-we were treated to the sight of a heroin addict injecting his arm, with the camera zooming in to show the syringe contents being pushed into the addict's arm. Again, I believe that that is something that is inappropriate at 6 p.m. shortly after sporting coverage, Inspector Gadget or, perhaps, The Goodies shows. I think that people who are determining television programming have to realise that many young children are watching television at that time of the evening. It is quite common these days for people to be scanning the different television stations and for children to end up watching these news services. In addition, in recent days we have seen bodies thrown from a Kuwait Airlines jumbo jet, Israeli soldiers in occupied territories with blood flowing from shattered skulls and, of course, horrific violence in Northern Ireland. Tonight I would like to call on the Australian Broadcasting Tribunal (ABT) to order television stations to be more responsible and to cut back on these examples of shocking violence. I do not believe that we should prevent television stations from showing these types of news stories but I believe it is inappropriate for this sort of footage to be shown before 10 p.m. I would hope that if the Australian Broadcasting Tribunal took action against the television stations the ABC, while not being directly responsible to the ABT, would take the lead and ensure that this sort of violence was not shown on television. My next point refers to the criticism which has been made by some honourable members opposite that this is not a true Labor Government. I must say that I felt quite ill having to sit through the contribution of the honourable member for Gippsland (Mr McGauran) this evening-the spoilt son of a member of the ruling class in Victoria giving the members of this Labor Government a lecture on what our social responsibilities are. The honourable member for Mayo (Mr Downer) has been attempting to interject. I advise him not to say too much or we will bring up the doll's house again. Of course, this Government can be very proud of the fact that in the five years we have been in government, over one million new jobs have been created. That more than anything demonstrates that this is a Labor government committed to helping traditional Labor voters. That is one million Australians, most of them traditional blue collar Labor people, who now have jobs and who did not have jobs when the honourable member's Party was in government. In fact, in the last two years when the honourable member worked for Fraser Government Ministers, half a million Australians lost their jobs. That was a great record, a record of which the honourable member can be proud. It is a record of helping traditional Labor voters by tossing them out of jobs. I refer to the collapse of the steel industry, job sharing, manufacturing industry haemorrhaging. That was the contribution of the honourable member's government to the traditional Labor voters of Australia. Mr Downer —There are not any. Mr LEE —The honourable member does not believe that there are any traditional Labor voters. I can assure the honourable member that the traditional Labor voters of Port Adelaide and Adelaide might have different views. Of course, I suppose the comment by the honourable member for Mayo goes to explain why the last Liberal-National Party Government allowed things such as pensions to be eroded by inflation. When the Whitlam Labor Government left office in 1975 pensions were set at 25 per cent of average weekly earnings. What did the Liberal Government do for the pensioners? That Government let pensions, as a percentage of average weekly earnings, fall from 25 per cent to 22.7 per cent. That was the record of that Government. That was a great achievement for those traditional Labor voting pensioners! In the five years that the Hawke Labor Government has sat on this side of the chamber we have taken pensions, as a percentage of average weekly earnings, from 22.7 per cent, where they were left by the previous Government, back up to 25 per cent of average weekly earnings. That is a great, historic, Labor Party achievement. It is an achievement which the traditional Labor voting pensioners in my electorate and other electorates throughout Australia certainly understand. They know what honourable members opposite would do if ever Australia were unlucky enough to have them back on the government benches. Honourable members opposite would bring in a consumption tax, provide no compensation for the poor and prices would go through the roof. They would use a consumption tax to pay for the abolition of the fringe benefits tax and capital gains tax for all their business mates. They would bring in a consumption tax so that they could abolish the assets test. The millionaires could go back to getting a pension. That would be the way they would help traditional Labor voters-the traditional Labor voting pensioners they want to do so much to help. These are the pensioners honourable members opposite ignored in their seven years in government. That is the choice the traditional Labor voters in Australia have. They must choose whether they want a government that takes the tough decisions that are right for Australia, like floating the dollar, letting in the foreign banks to ensure we have more competition and making Australia's manufacturing industry more lean, hungry and efficient so that we have got jobs for our young people in the years to come. The traditional Labor voters know that honourable members opposite will let pensions erode back to 22.7 per cent, just as they did in the Fraser years. Traditional Labor voters know that honourable members opposite do not represent their interests. They represent the interests of people such as Mr John Elliott who wants a consumption tax so that he can cut the amount of tax his business pays, so that he can take his assets and jobs overseas and do anything he wants so long as he can maximise his own personal profits. I know that the traditional Labor voters of Australia at the next chance they get will reject the Opposition, regardless of who happens to lead it at that time, because they know who really represents their interests. That is the Australian Labor Party. I am sure that this Government will continue to deliver the goods for those voters throughout Australia. Mr DOWNER(Mayo)(10.20) —I thank you, Mr Deputy Speaker, for giving me the call. The previous speaker, the honourable member for Dobell (Mr Lee), has started to reiterate the tirade that obviously members on the other side of the House have been instructed to talk about and that is, `Oh, by the way, we have not lost touch with what are described by the Labor Party as traditional Labor voters'. While I was listening to this speech for the 250th time in the last week from a member not from South Australia, I interjected that there are no traditional Labor voters left in South Australia. The honourable member for Dobell then referred to the Adelaide and Port Adelaide electorates. That is the precise point. The Adelaide electorate-a traditional safe Labor seat and not a seat where we have spent a great deal of money in the past in election campaigns-is a seat where the traditional Labor base just evaporated. When one looks at the hardest, strongest Labor booth in the electorate of Adelaide, one sees in that booth that there was a swing of 22 per cent to the Liberal Party. That says something about my contention that there are no traditional Labor voters left anywhere, including South Australia. I do not want to enter into these sorts of party political tirades tonight. I want to spend a little time talking about an issue that I think is more important than going around pretending that traditional Labor voters are happy with the Labor Government, or some such thing. I want to talk about the issue of Commonwealth-State financial relations, which I think is a very important aspect of economic discussion in this country, though it is not debated much in this Parliament. One of the reasons why it is not discussed much in this Parliament is that I suspect people think it is politically-whatever that may mean-too difficult to put forward any constructive alternative to the way that relationship currently works. We have a unique Australian fiscal federalism which in reality is lacking any underlying rationale or philosophy. It is something that has simply evolved to meet external problems and a series of crises. For example, massive Commonwealth borrowings during World War I, which were obviously made necessary because of the war, led to the Australian Loan Council being established in 1923 to co-ordinate those borrowings. The Great Depression led to the Grants Commission being established. During World War II, because of the exigencies of the time, there was a transfer of income tax powers from the States to the Commonwealth. The result, of course, is that we have in Australia a financial relationship between the Commonwealth and the States which is simply an ad hoc response to the problems resulting from a whole lot of external factors. Consequently we have a structure that suffers from a poor division of powers and responsibilities between the Commonwealth and the States. Let me just give the House some examples. Accountability for the expenditure of moneys and the borrowing of moneys is simply obscured because of the nature of the relationship between the Commonwealth and the States. Secondly, the States are encouraged to seek help from others for their financial problems, not to go out and fix those problems themselves. Thirdly, I think as most members of this House know, there is a duplication of functions between the Commonwealth and the States and that leads to obvious inefficiencies and administrative burdens in both those levels of government, which in many cases are simply trying to do the same thing. We have two departments in many areas of activity which are simply set up to do something that is very similar, if not identical, at both Commonwealth and State levels. Furthermore, the Commonwealth does not have effective control over the State sector's net borrowing requirement, in spite of the occasional protestations from the present Treasurer (Mr Keating). Probably some of his predecessors have tried to argue that they do have that control, but the reality is that that control, or perhaps one should say coordination, does not exist sufficiently effectively. Under the current Loan Council arrangements there are global limits set for each State's borrowings. Theoretically this system should work, but in practice these limits can be evaded. I have with me a very interesting letter that the South Australian Government Financing Authority's chief executive sent to the South Australian Government's State Government Insurance Commission in which the Chief Executive of SAFA, as it is often referred to, said: . . . off-shore borrowings by the central borrowing authorities of a State . . . do not count against the limit- that is, the Loan Council limit- if the borrowings are undertaken on behalf of one of the State's financial institutions: The letter went on: The Treasurer- that is referring to the Treasurer of South Australia, who is the President of the Labor Party, Mr Bannon- has asked us to develop an arrangement between SAFA and the SGIC- the State Government Insurance Commission- which would enable maximum advantage to be taken of this advantage to the financial benefit of both organisations. It is perfectly clear from that letter that the Government of South Australia was trying at that time-November 1986-to use an artificial means of circumventing the Loan Council guidelines. I know very well, for I once asked the Treasurer a question about this letter and he undertook to investigate this particular scheme. So far, not surprisingly for the present Treasurer, I have not heard the results of those investigations, which seems to suggest that the Treasurer was dissatisfied with the scheme but decided not to tell the House, because South Australia has a Labor government. If the Commonwealth took the view that it should hold firm and make its Loan Council limits stick, I think the reality is from the Commonwealth's point of view that they would end up with an all-out brawl between the Commonwealth and the States in an obviously political arena where the Commonwealth could come out suffering a very high political cost. Bearing that in mind, it is debatable that the Commonwealth would hold firm. This particular exercise relating to SAFA in South Australia I think is a clear example of politics overwhelming sound economic management. A further aspect of our Federal-State financial arrangements is that the States' revenue base for tax raising is, as I think honourable members would realise, very narrow and consequently there are some aspects of the economies of States that are taxed very severely and in many respects I think very irrationally. The taxes that are forced effectively on the States are taxes such as stamp duties, excises and perhaps one of the most pernicious of all taxes in Australia, the payroll tax, which is really a quite irrational tax in a country that has nearly 8 per cent unemployment-a tax on employment. It is quite an extraordinary thing really for a government to do. When one looks at the structure of the relationship between the Commonwealth and the States from that point of view, one can see that there is a whole series of anomalies. What makes the need for reform of the Commonwealth-States financial relationships so pressing is the fact that the present system has operated in such a fashion that the level and the efficiency of overall public sector outlays in Australia has been adversely affected. We are spending more in our public sector and we are getting less value from it than we could if we sensibly considered, not in a party political way but as a community and as a parliament, the financial relationships and arrangements between the Commonwealth and the States. If we are really serious about the issue of reducing the size of government in Australia-and I suppose on the other side of the House they are not, but on this side of the House we are-then we have to look at some options for reform in this area. I am not pretending for a minute that those options for reform will ever be easy-I think they will be difficult, particularly for political reasons-but I do think we need to look very carefully at a series of different things that we can do. There needs to be a rational re-allocation of expenditure responsibilities to start with between the States and the Commonwealth. We have to try to find ways of eliminating a lot of the duplication that exists on the spending side between the Commonwealth and the States. Perhaps the Liberal-National Party government that will be formed after the next election could undertake a voluntary cutback in the powers of the Commonwealth on that front in order to try to cease the sort of duplication that we have at the moment. A whole range of other issues need to be considered, but at this time of the night I shall defer consideration of them until tomorrow. Debate interrupted. Mr DEPUTY SPEAKER(Hon. J. D. M. Dobie) —Order! It being 10.30 p.m., I propose the question: That the House do now adjourn. Mr HOLLIS(Throsby)(10.30) —I would like to draw the attention of this House to a business malpractice whereby false and misleading information is given to people in small business in the hope that they will pay out hard-earned money for advertising which may well prove to be of no value. This is the telephone scam. Last week a member of my staff was contacted by a Mr Peter Hallinan, who runs a panel-beating business not far from my office. Mr Hallinan said he had just received a phone call from a man who gave him the very clear impression that he represented the New South Wales Government. He had said that the new Government in New South Wales was seeking to boost employment in areas outside metropolitan Sydney by offering government business to local firms, and that Mr Hallinan's panel-beating business was one of four chosen for all government work in the Illawarra area from Helensburgh to Nowra. Mr Hallinan was told that he would be contacted by a representative of the Government Printing Office who would make arrangements for him to advertise in a government publication. This would cost approximately $350. The following day Mr Hallinan received a phone call from a second person, a woman, who said his advertisement would be placed in a publication called `The New South Wales Country Government Directory'. Mr Hallinan asked her whether he could return her call and was given a Sydney phone number. On checking with the New South Wales Government Printing Office, I was informed that it had no knowledge of any publication called `The New South Wales Country Government Directory' and that it most certainly was not a government publication. I then contacted the woman who had phoned Mr Hallinan and gathered that she was expecting phone calls from a number of Wollongong businesses. Rather than answer my questions, she referred me to a person on another phone number. This person proved to be the manager of a printing company in Sydney. He gave me a very different story. He said the publication was, in fact, called `The Local Government Supplies and Services Purchasing Directory, New South Wales Country' and that it most certainly was not a government publication but was run by private enterprise. It is a directory which is produced annually and which lists private businesses and services and is circulated to some New South Wales Government departments but especially to local governments. The same firm publishes similar directories for metropolitan Sydney and for metropolitan and country areas of other States. I have no reason to believe that this firm is anything but a well-established and reputable firm of many years standing. The problem would seem to be that firms such as this rely on sales contractors, who work on a commission basis, for the advertising they carry in their publications. In this case it would seem that the sales contractor is not as reputable as the printing firm. The manager was most concerned by the information I gave him and assured me that he would follow it up. It is, of course, in his own best interests to do so and I am sure he will. He made the point that his industry is relying increasingly on sales contractors who sell advertising space over the phone. This practice is, of course, very much open to abuse. He also told me that it is becoming a common practice for bogus contractors to claim to be selling advertising for a particular publication without the knowledge of the publisher. They work the scam in such a way that they pocket the money but the advertisement never appears. I might add that a senior representative of a local municipal council told me that, since the recent New South Wales election, his council had received a number of glossy brochures advertising various publications and playing on the fact that, with the new Government in New South Wales, theirs is a publication the council cannot afford to be without. In most cases, he said, these publications are of little value. I should add that the publication in question does not fall into this category and is, in fact, used by a number of councils. I was also told that, in the case of panel-beating, it would be pointless for a local firm to advertise through a directory because his council had well-established methods for handling its motor vehicle repairs, mainly through its own works depot. I would therefore strongly caution people in small business to be wary of telephone advertising and to check the facts very carefully. Most importantly, they should contact the printing firm and establish that it is a reputable firm and that they know exactly what they are paying for, otherwise they may be wasting their money. May I conclude by commending Mr Peter Hallinan for his initiative, his sense of justice and his concern for the common good in approaching my office in the first place. Mr PROSSER(Forrest)(10.34) —It is with a mixture of anger and disappointment that tonight I have to bring to the attention of the House an unfortunate incident involving the Australian Taxation Office, an incident that has harmed Australia's reputation as a fair minded and compassionate nation. I am sure that fairness and compassion are virtues we would all like to see in ourselves and our country. But it seems they do not exist in our taxation system. The actions of the Taxation Office severely damaged our reputation last October when it sent a tax bill to the parents of a young British woman brutally stabbed to death while on a working holiday in Australia. As if it were not enough that 23-year-old Susan Frost should die so violently so far from home, just six months after the murder her parents received a tax bill for $339, assessed on income Susan earned doing casual work while in Australia. The bill was sent even after the Taxation Office had been advised in writing of the tragic circumstances of her death at the time a family friend in Perth lodged her return. Honourable members would appreciate the enormous distress that this caused Susan's parents. And the callous attitude of the Taxation Office has angered the people of Albany, the town in Western Australia where Susan Frost was killed, not to mention what it has done to our reputation overseas as a fair minded and reasonable nation. After the murder, the people of Albany responded by contributing thousands of dollars to a special fund to send Susan's body back to Britain for burial. The Albany community did much to ease the pain for Susan Frost's parents. Now they justifiably feel that the Taxation Office has let the side down. I am advised that the Taxation Office last week reacted to the widespread condemnation of its action with a decision to refund the money to Mr and Mrs Frost. But I believe the matter should be taken further. I urge the Government to send an apology to the family, appropriately worded with the compassion that has so far been lacking in this case. Some days ago, I requested the Treasurer (Mr Keating) himself to instigate a review of the Taxation Office procedures which enabled this situation to arise. I sincerely hope that this action is taken and that an incident such as this is never repeated. The matter is compounded by the fact that the murderer was on parole from another State on a charge of attempted murder and assault. This matter has been spread all over Britain by television and the newspapers, and it has severely damaged Australia's reputation. It has damaged the perception of British people that Australia is a fair minded and safe place. I hope that the Treasurer will at least write to Miss Susan Frost's parents to point out to them that this is not the norm in Australia, that the Australian Taxation Office normally does not seek to recover $339 from the families of people who have died in this country under such tragic circumstances. Mr O'KEEFE(Burke)(10.39) —Tonight I will briefly refer to changes taking place in the quality of Australian made products, particularly in my electorate. Madam Speaker, you will be delighted to hear that, among other things, I will refer to the furniture for your suite at the new Parliament House. Last week I had the pleasure of inspecting the completed furniture for your office. I do have some background in cabinet-making and woodwork and I believe that the furniture displays the finest workmanship and highest quality Australian materials that I have seen anywhere in my life. I know that you will be pleased with it, but it gives me the opportunity to talk about the importance of our recognising that we have quality craftsmen and craftswomen in Australia who are not only capable of this type of workmanship but also capable of presenting to the world both design and products of which we can be proud. It is interesting that David Emery, the person who has the contract and produced this work, has now received expressions of interest from international tenderers who wish to place his work on international markets. The new Parliament House is not only a fine building; it has put on display some of the talent that is available in this country. I am already starting to see direct evidence of export opportunities for us because this sort of workmanship is now on world display. I am sure, Madam Speaker, that in years to come as you show people through your suite in the new Parliament House, you will, as I will, look with pride at this work knowing that it has come from Kyneton in central Victoria and it displays marble, brass work and the finest quality Australian ash. I also want to show you, Madam Speaker, my little penguin friend, because this is a product of a new operation in Kyneton called Kyneton Fine China. Members have been very critical of Australian industry for not presenting and marketing work properly-for not pitching it at the right market. In my electorate, this new little operation makes very fine china products, which are hand painted and crafted in the finest detail. In addition, they are packaged in such a way that overseas tourists why buy them know that the items will get back safely. My little penguin friend is just a small example and from the bottom end of the retail market. When the Prime Minister (Mr Hawke) visited my electorate about 12 months ago, he had much pleasure in receiving a koala. Perhaps a fine china submarine could be made for the Minister for Defence (Mr Beazley). The point that I am making is that Peter and Rita Daniels, who emigrated to Australia some time ago as quality craftspeople, have set up a business that employs and trains people to work with fine china. The company's product has been pitched at an exclusive market. Much has been said about Japanese tourists who look for high quality Australiana. Our shows are getting their act together and are starting to prepare, present and package products in a way that meets the direction that is needed. I put on record my continued faith in and commitment to the performance of Australian industry and urge all members of this House to continue to buy Australian. Mr CADMAN(Mitchell)(10.44) —Tonight I complain about the way in which the Government is treating a long established export industry and the way in which it is taxing export industries out of business. Within my electorate are a large number of small primary producers who produce cut flowers, seeds and plants for export. Recently the Government decided to greatly increase inspection charges imposed on producers of cut flowers, orchids, seeds, plants, and tissue cultured material for phyto-sanitary certificates. The Government claims that these certificates are necessary for the export market but it has used a 50 per cent cost recovery approach to this large number of small growers. The growers have worked hard over a long period to grab a foothold on foreign markets. Such markets are not easily achieved and their export earning capacity is very significant. In the orchid industry in Sydney alone, the export market is valued at $8m to $10m. It seems to be a small industry when dealing with a large number of small producers. However, in toto, their efforts are of great significance to Australia. The growers bear the cost of each certificate. The growers claim that, because the materials are not for human consumption, they should not bear the penalties imposed on such products in order to maintain Australian quality on world markets. Growers claim-and I believe that they are right-that, if a commodity is found by the importing country not to be of sufficient standard, that material is either destroyed or treated. The grower, after going to great expense, then himself bears the penalty of unsatisfactory marketing. The cost to Australian growers involves a minimum charge of $48 per consignment. To give the House an example, if a grower is exporting to Japan and he has three different consignees in Tokyo and a couple in Osaka, he must pay for five certificates, amounting to a total of $250 for what at times can be a small-valued export. Many consignments are valued at $150 to $200, and are necessary in order to fill a gap for the importer, to keep faith with the importer, and also to maintain a continuity of supply in items in times of shortfall. Therefore, on low cost consignments growers can find that an inordinate part of their cost is taken up by the additional charges imposed by this Government, which seeks to grab at every possible tax that it can. Currently a review of fees for inspection of horticultural produce and non-prescribed gains is being undertaken by the Government. The committee that is conducting the review is due to report at the end of this month. It would be a great shame and a great loss to Australia's export capacity if hundreds of small producers were put out of business or if these markets were lost. As a nation we are seeking to improve our export effort. That will not happen in the horticultural industries if the Government consistently raises fees for its activities in these areas. I appeal to the Government and the Minister to immediately reconsider the imposts that they have placed on small producers, on people who are hard working and who have family businesses. These are labour intensive industries. The export markets have been hard won and they will be easily lost. Many producers in the electorate of Mitchell in the Sydney area are rapidly losing their capacity to compete. They are closing down, markets are being lost, continuity will not be regained and we will lose the impact of our efforts over many years to countries which are competing against Australia. I think it is shameful that the Government has been so unfeeling and thoughtless in its grab for money. Madam SPEAKER —Order! The honourable member's time has expired. Mr LAMB(Streeton)(10.49) —Probably on no other issue is the coalition more divided than on the issue of a consumption tax. At the Liberal Party Council very recently the Liberal Party Federal President, Mr John Elliott, said that most of his mates did not pay their full amount of tax-and then he quickly added, `on legitimate grounds, on legal grounds'. His argument was that his mates would pay a greater amount of tax if a consumption tax was imposed. He also said, as reported on the Channel 7 television news at 6 o'clock on 24 March, that he was not sure that indirect tax was necessarily a major winner in the electorate-and how right he was there. He went on as follows: But I mean in terms of running the country to me it is one of those essential things. He was quite right to narrow down the support to himself. Although he managed to get a vote in approval at that Council for a consumption tax, he is very much out of step not only with the electorate but with his National Party colleagues in the coalition and with some members of his own party. This Government has brought in very many measures of tax reform which make the imposition of a consumption tax irrelevant. We have brought in a capital gains tax and a fringe benefits tax. Business entertainment has its rightful value now that it is no longer a tax dodge. Because of that, those who were evading their tax by constructing their affairs so as to claim for quasi or semi-business matters are now required to pay their full tax. It is true that at the National Taxation Summit in 1985 this Government put up option C, a component of which was a consumption tax. However, we got clear messages from the electorate that this was not what it wanted on the grounds of inequity and hardship for pensioners, low income earners and poor families. That message got through to the Government and option C was rejected. We believe that the introduction of capital gains tax, fringe benefits tax, tougher substantiation rules for employment expenses and the denial of taxation deductions for business entertainment, as well as improved tax operations, have filled the gap and will raise between $2.5 billion and $2.75 billion in 1987-88. That is about twice as much as would be raised by a consumption tax, which the Treasury has estimated would raise about $1.5 billion. One wonders whether Mr Elliott and his mates would pay the right amount of tax if we relied on a consumption tax. Of course they want to trade off the consumption tax for this range of other tax nets that we have imposed and which have caught them undone. If we were to introduce a consumption tax we would suffer, perhaps, a one-off and probably extended jump in the inflation rate. The lowest level I have heard is 6.5 per cent, but I think it would more likely be 8 or 9 per cent. When one does the sums of the Liberal Party of Australia in raising money through the consumption tax and offsetting the losses in revenue through getting rid of the taxes that we have brought in and them wishing somehow to lower company tax and personal income tax, one finds a shortfall of almost $2 billion. When one adds that to the size of the consumption tax that must be raised, one can predict that the inflation rate due to, say, a 20 per cent rate of consumption tax, would be of the order of 15 or 16 per cent. One can imagine the impact that would have, quite rightly, on the trade union movement which would want somehow to recoup its loss of standards and purchasing power by going to the Australian Conciliation and Arbitration Commission and asking for a rise in wages. One could not blame it for that. So when we go into this argument of whether we should have a consumption tax let us remember that it is inequitable; that it hits the low income earners and the poor people most; that it would bring about industrial disputation and a clamour for increased wages; and ultimately it would bring about an inflation rate that would probably cripple this country in its fight to have economic competitiveness on an international scale. Madam SPEAKER —Order! The honourable member's time has expired. Mr SMITH(Bass)(10.54) —In the last remaining minutes I would like to talk about one of the visits that I, as a member of parliament, have made recently. Members of parliament get to make visits all over the nation. Some of them are a lot more interesting than others. One that I made last Friday was of deep interest to me and I think it would be of considerable interest to those in this House who think about the future. It was a visit to the Bass Strait oilfields. As we know, oil is vital for our continued lifestyle and it is an issue that we have debated heatedly in this Parliament over the last several sessions. A visit to the Bass Strait oilfields brings home to one the immense amount of cash flow that has been generated there in terms of tax dollars and the benefit that Australia has received from that income. The other issue that strikes one is that oil coming from Bass Strait is rapidly coming to an end. Many issues have been raised, but I think that the most important is the ever-encroaching reality of the declining self-sufficiency of Australia's offshore oil supplies. The taxation regime as it applies to that area is extremely important and there has been considerable debate about what we ought to do. One particular issue that was raised with me in the course of the visit was the 30 million-barrel concession system and whether it ought to apply to any development, not just new developments. The simple reason for this is that applying it to any new development is rather a nonsensical gift because the opportunities for new developments are diminishing all the time. So, in terms of investment dollars being expended by those who are seeking the oil, a broadening of that concept of development would be in Australia's best interests. Interestingly, there is one new platform. That is one of the ones that I went to on Friday, and that is the new Bream platform. It utilises the very latest in computer technology and it also utilises the system known as top drive. The old system of table drive has now been superseded. This is the first example in Australia of top drive and it will give far greater productivity and efficiency in bringing up the oil from beneath Bass Strait. That well will generate only 35 million barrels of oil-it is a very small reserve-and it will reach its peak in three years time, for a total investment of $A350m. It may be one of the very last of the large in situ rigs in Bass Strait. As I said, the decline in Bass Strait has many ramifications. On the economic side, we have to look to some $4 billion worth of imported oil in the future. There will be a loss of jobs in Victoria and there is a need to explore and look for alternative energy sources. But there is one issue which this House has not considered and which I think it ought to. What will happen to the oil rigs once we stop taking the oil out of them and they come to the end of their useful life? It is an interesting legal, economic and environmental issue. I think we need to be discussing it now because by the year 2000 the problems will be a reality and the community will have to determine which legislation will be passed, particularly in this place, to make sure that those oil rigs are removed in some way. So far as I can find out, there appear to be four options. The first is to decommission the rigs and to maintain them with warning lights and markers. The second is to topple them over in what has been called the rig-to-reef principle. The third is partially to remove them to give reasonable clearance below the waterline for navigation purposes. The fourth is complete removal. In today's values, this would cost in the vicinity of $70m, so by the year 2000 the figure would be much larger. Of course, the community would have to pay for complete removal because the cost would be passed on in one form or another. So, if there are cheaper alternative methods that can be environmentally sensitive to the needs of that area and which would provide for safe operation in the waters, perhaps we should be exploring them. There is plenty of time to be thinking about this but I think we should start to consider it now rather than later. Tony Hyden, an engineer with the technical division of Esso, said: From the legal point of view the concern is that if you have a piece of property and you have an agreement to dump it then some fisherman comes along and snags his net on it, can he sue somebody? Or, if you leave it there with navigation lights and somebody is driving along in their ship and the radar isn't working and they bang into it, can they sue somebody? Maybe someone passing on a boat could climb onto the platform and a ladder is rusted and he falls through, can he sue somebody? . . . . One solution would be for the relevant coastal State to take them over, since they have sovereign immunity against law suits, but I am not aware of any coastal State in the world saying they would assume residual liability. . . . . The most costly and least desirable option is complete removal. The platforms would be taken to shallow waters, cut up-- Madam SPEAKER —Order! The honourable member's time has expired. Question resolved in the affirmative. House adjourned at 10.59 p.m. The following notice was given: Mr Tuckey to present a Bill for an Act to amend the Health Insurance Act 1973. The following papers were deemed to have been presented on 18 April 1988: Acts Interpretation Act-Statements relating to the extension of specified period for presentation of periodic report-Merit Protection and Review Agency-Report for 1986-87. Export Control Act-Export Control (Orders) Regulations- Orders-1988- No. 3-Prescribed Goods (General) as amended (Amendment). No. 4-Export Control (Fees) as amended (Amendment). Fisheries Levy Act-Regulations-Statutory Rules 1988, No. 51. National Health Act- Declaration and advice of Pharmaceutical Benefits Advisory Committee pursuant to subsections 85 (2aa) and (2ab), dated 30 March 1988. Declaration pursuant to subsection 85 (2), dated 30 March 1988. Seamen's War Pensions and Allowances Act-Regulations-Statutory Rules 1988, No. 49. Superannuation Act-Regulations-Statutory Rules 1988, No. 48. Veterans' Entitlements Act-Regulations-Statutory Rules 1988, No. 50. World Heritage Properties Conservation Act- Proclamation pursuant to subsection 6 (3), dated 31 March 1988. Regulations-Statutory Rules 1988, No. 47. The following answers to questions were circulated: (Question No. 304) Mr Smith asked the Minister representing the Minister for Transport and Communications, upon notice, on 22 October 1987: (1) What are the names of famous Australians given to the aircraft operated by Australian Airlines. (2) How does Australian Airlines determine which name it will give to each aircraft. Mr Peter Morris —The Minister for Transport and Communications has provided the following answer to the honourable member's question: (1) AIRBUS A300-B4 Registration Name VH-TAA JAMES COOK VH-TAB JOHN OXLEY VH-TAC JOHN FORREST VH-TAD WILLIAM LIGHT VH-TAE JOHN FAWKNER BOEING 727-200 VH-TBG CHARLES STURT VH-TBH FREEMAN COBB VH-TBI McDOUALL STUART VH-TBJ JOSEPH BANKS VH-TBL JOHN EYRE VH-TBM ALBERT NAMATJIRA VH-TBN CAROLINE CHISHOLM VH-TBO ARTHUR PHILLIP VH-TBP JOHN MACARTHUR VH-TBQ LAWRENCE HARGRAVE VH-TBR BERT HINKLER C2-RN7 ERNEST GILES BOEING 737-300 VH-TAF COURAGEOUS VH-TAG ADVANCE VH-TAH ADVENTURE VH-TAI BOLDNESS VH-TAJ CHALLENGE VH-TAK DARING VH-TAU ENTERPRISE VH-TAV INTREPID VH-TAW PROGRESS VH-TAX SUCCESS VH-TAY VALIANT VH-TAZ VICTORY BOEING 737-300 (on order) RESOLUTE FORTITUDE ENDEAVOUR GALLANT DC9-31 VH-TJJ HAMILTON HUME VH-TJQ JOHN FLYNN VH-TJR GEORGE BASS VH-TJS DOUGLAS MAWSON VH-TJT JOSEPH HAWDON VH-TJU JOHN ROE FOKKER F27 VH-TQR WILLIAM HOVELL VH-TQS EDMUND KENNEDY VH-TQT THOMAS MITCHELL (2) As aircraft are delivered to the Airline, the names given to the aircraft are determined by the Management of the Airline according to its current policy. (Question No. 418) Mr Tickner asked the Attorney-General, upon notice, on 18 November 1987: (1) Is it a fact that the (a) Australian Income Tax Assessment Act contains 1,197 sections and approximately one million words and (b) Hong Kong Internal Revenue Ordinance contains only 172 sections and approximately 60,000 words. (2) Why does the regulation of income tax law in Australia require nearly 7 times more statutory provisions and about 15 times more words than such regulation in Hong Kong. (3) Is he able to say whether the (a) Co-operative Companies Code as applied in the Australian books contains 698 sections and about 375,000 words, (b) consolidated Companies Act 1985 in the UK contains only about 220,000 words, (c) Canadian Business Corporation Act, including regulations, contains only 269 sections and about 110,000 words and (d) Swedish Companies Act contains only 220 sections and about 40,000 words. (4) Has his attention been drawn to any other analogous statutes regulating income taxation or company law in any Western country that are more voluminous than either of the Australian Income Tax Assessment Act and Companies Code. (5) Has his attention been drawn to the recent Discussion Paper on Plain English, dated August 1986, prepared by the Law Reform Commission of Victoria; if so, will he take urgent steps to overhaul the complex and wordy drafting of our business law statutes. Mr Lionel Bowen —The answer to the honourable member's question is as follows: (1) I am advised yes. (2) The volume and complexity of the Australian Income Tax Assessment Act has often been criticised. However, it is necessary to have regard to the social and economic functions which the Act performs, and the history of judicial interpretation to which the Act has been subject. The volume of the Act results partly from the fact that it is not merely a revenue raising device. Many provisions grant special tax treatment to certain groups and thereby act to redistribute wealth within our society. The major difficulty has been the tendency, particularly in the past, for Australian courts to interpret the Act narrowly by taking a `black letter' approach to the statute. In an attempt to overcome this approach the practice developed of drafting amendments to the Act with great particularity so as to state, as precisely as possible, the intention of the Parliament. In particular, the approach of the courts to a generally expressed anti-avoidance provision is well known. The result has been the inclusion in the Act of complex and lengthy anti-avoidance provisions so as to prevent or limit the opportunity for tax avoiders to exploit tax relief conferred by other provisions. The Hong Kong Inland Revenue Ordinance is a relatively simple taxing measure. It does not purport to perform the same functions or cover the same subject matter as the Australian Income Tax Assessment Act and so cannot fairly be compared with it. However, I would draw the attention of the honourable member to an article by Andrew Halkyard in the September 1986 edition of the Australian Taxation Review which discusses recent anti-avoidance amendments to the Inland Revenue Ordinance. The author makes the observation, with respect to one particular amendment, that ``. . . . the problem in enacting simple legislation is that there is often the risk that it does not cover that with which it is intended to deal''. (3) (a) and (b) and (4) The Australian Companies Act 1981 contains 634 sections. By contrast, the United Kingdom Companies Act 1985 contains 747 sections. However, it would not be appropriate to compare these statutes simply by reference to the number of sections or words each contains. The matters dealt with by both Acts are not identical. For example, there are a number of substantial matters dealt with by the Australian companies legislation but not by the United Kingdom companies legislation. These include: (i) the regime concerning the suspension and cancellation of the registration of auditors and liquidators; (ii) prescribed interests; (iii) official management; and (iv) no liability companies and investment companies. In addition, the Australian Companies Act 1981 forms a part of a framework of Commonwealth, State and the Northern Territory law. This has required the inclusion of a large number of machinery provisions dealing with the recognition of incorporation and the registration of certain documents in other jurisdictions, the reservation and registration of company names in those jurisdictions, and the transfer of incorporation from one jurisdiction to another. (3) (c) and (4) The Canada Business Corporations Act has 266 sections. However, the federal legislation in Canada governing companies is not confined to the Business Corporations Act. Other relevant federal Acts include: (i) Companies' Creditors Arrangements Act; (ii) Criminal Code; (iii) Corporations and Labour Unions Returns Act; (iv) Bankruptcy Act; (v) Winding-up Act. A similar position exists in the Canadian provinces each of which have separate systems of company law. In Ontario, for example, legislation governing companies includes the Business Corporations Act, the Corporations Information Act, the Corporation Securities Registration Act and the Extra-Provincial Corporations Act. The Ontario Securities Act also contains provisions which are dealt with in Australia by the Companies Act 1981 (for example, the distribution of prospectuses and the reporting of material changes in the affairs of a company). (3) (d) and (4) The Swedish laws and legal system are conceptually different to those of Australia. Sweden is a civil law country. Australia is a common law country. In Sweden, as in most European civil law countries, there is a tendency to formulate principles and broad rules of law rather than to legislate in terms of particular cases. The Swedish courts have a much greater scope for interpreting the law compared with the approach traditionally adopted in the Australian courts entrenched in an Anglo-Saxon legal tradition which is based on detailed specification in legislation and certainty of interpretation. Apart from cultural and legal differences, the company law structure in Sweden is simpler than in Australia as the Swedish legislation deals with only one type of company and only one jurisdiction. Australian law deals with different classes of companies to which different requirements apply. Furthermore, Sweden regulates companies through multiple Acts rather than one consolidated piece of uniform legislation as in Australia. Apart from the Swedish Companies Act these other Acts include: (i) Simplified Sharehandling Act; (ii) Trade Names Act; (iii) Accounting Act; (iv) Act on Public Board Representation in Companies; (v) Act on Share Investment Funds; (vi) Act on Foreigners and Foreign Companies' Rights to carry on Business in Sweden. (5) I am aware of the Discussion Paper and also of the final report of the Law Reform Commission of Victoria entitled ``Plain English and the Law'' released in June 1987. Both have received close attention within my Department and the Office of Parliamentary Counsel. In 1986 the Office of Parliamentary Council recognised that there was room for improvement in its drafting style, as practices adopted by the Commonwealth in the past had resulted in unduly complex language. In December 1986 it began a series of measures to develop a more simple and functional drafting style. This will be a continuing process. New Commonwealth legislation is being drafted to replace the current co-operative companies legislation. I am confident that the new legislation will reflect as far as possible the current more simplified style of Commonwealth drafters. If the deregulatory initiatives, presently being considered by the Companies and Securities Consultative Group I have established to assist in the development of the new arrangements, are implemented, there will be further scope for simplifying both the policy and drafting of the legislation. However, the extent to which the language of the existing laws may be fully redrafted will depend on time and resources available. I am also advised that the Australian Taxation Office is currently examining the Income Tax Assessment Act to remove outdated and redundant provisions and thus reduce the length of the Act. The Government recognises the desirability of business law and other legislation being drafted in a clearer and simpler way. It may reduce the cost to both business and the community of administering those laws. However, plainer drafting cannot bring this about by itself. Practising lawyers and the courts have a crucial part to play in accepting the new disciplines of simpler drafting and developing a new approach to statutory interpretation to focus on the policy intent of the legislation rather than any narrow literal meaning which might be extracted. The enactment of sections 15aa and 15ab of the Commonwealth Acts Interpretation Act (and their counterparts in the cooperative scheme Interpretation Code) directing courts to have regard to the object or purpose of legislation represents a significant step in laying the foundation for a more general drafting approach. With the greater priority being given to the value of simpler drafting, I am hopeful that future legislation will be increasingly tested in the light of this approach, not only by drafters and policy advisers but also more importantly in the public domain. The objective is to achieve effective legislation that is also comprehensible and readable.